Removing/Returning cash from a flexible ISA and starting new ISA in same tax year

Onum

Hi, I have a Zopa flexible ISA that allows me to return cash I have removed from it as long as the transactions are in the same tax year. If I remove cash from this ISA can I still return the removed value even if I open a new ISA with a different provider (to the full £20k amount say) in the same tax year? ie in Tax year 2026/27 remove £10K from Zopa flexible ISA, later in same tax year open new cash ISA (£20k) with different provider and then in the same tax year return the £10k to the Zopa flexible ISA? Obviously I'm not planning on increasing the holding in Zopa, just returning it the the pre-withdrawl balance? Thanks.

ladruid

MSE have a good guide on this. https://www.moneysavingexpert.com/savings/flexible-isas/

To be 100% sure though, contact your provider and ask them, no one here can answer that question with 100% certainty and it would be a travesty if you lost ISA status on monies!

friolento

https://forums.moneysavingexpert.com/discussion/comment/81955505#Comment_81955505

There is no need for calling a provider as the rules are clear (and it’s not unheard of that provider staff don’t know the rules). It would be completely within the rules to do the following:

1. Deposit £10k new money into a flexible ISA Your remaining ISA allowance is £10k
2. Withdraw the £10k. Do with it what you like. Your remaining ISA allowance is now £20k
3. Open a new flexible ISA at a different provider and put £20k in. Your remaining ISA allowance is now £0 but you can still make use of the flexible ISA rules.
4. Before end of the tax year, withdraw £10k (or any amount) from the second ISA and put it back into the first one (or into any other ISA for that matter)

I am not sure whether this is what the OP had in mind, but it’s legit to do. The overriding rule is that you cannot exceed your £20k annual allowance across all your ISAs (some changes coming next year for under 65s)

p00hsticks

https://forums.moneysavingexpert.com/discussion/6663322/removing-returning-cash-from-a-flexible-isa-and-starting-new-isa-in-same-tax-year

How can you remove money from a flexible ISA if you haven;t first deposited it ?

AS I understand it the deposit, removal (and potentially later deposit) all need to be in the same tax year so the first deposit will use up some of your allowance - you won't then be able to open another one for the full £20k elsewhere in the same tax year…

EDIT - having re-read the MSE guide, I am wrong - it appear you can withdraw previous years subscriptions from a flexible ISA and later pay them back into the same ISA without it affecting you current years allowance..

If you withdraw subscriptions from previous tax years (IE money you'd deposited in the ISA in any tax year prior to the current one), you must re-deposit in the same ISA you withdrew from for it to not impact your £20,000 annual limit.

toothdoctor

From my understanding, previous years contributions, if withdrawn must be returned to the ISA from which it came from (providing it is flexible) but current years subscription can be withdrawn but can be deposited in any ISA providing they are flexible. Correct me if I am wrong 😀

surreysaver

https://forums.moneysavingexpert.com/discussion/comment/81956837#Comment_81956837

Current year subscriptions can be withdrawn from an ISA, provided it is flexible, and can be replaced into any ISA, regardless of whether it's flexible or not!