ISA funding problem Santander to Trading 212

sparkiemalarkie

My son mistakenly did a bank transfer from his Santander ISA to Trading 212 S&S ISA..

He had already contributed £20,000 to the Trading 212 ISA this tax year so the money was not allowed into the ISA account.

Instead of rejecting the money Trading 212 put the money into his invest account - a completely different account number to the ISA.
Santander is not a flexible ISA.

Is it possible to get this money 'rejected' and and sent back to Santander and retain its ISA wrapper?

tia

sx

Exodi

sparkiemalarkie 

My son mistakenly did a bank transfer from his Santander ISA to Trading 212 S&S ISA..

Sorry could you clarify this a bit more -

Do you mean he withdrew the funds from his Santander ISA to his bank account, and then deposited those funds from his bank account to his Trading 212 ISA?

Hard to see that this was accidental, so I'd imagine by 'mistakenly' you mean after the funds were rejected in the T212 ISA he realised he should have done a formal transfer, rather than an impromptu withdrawal+deposit.

If the order of events is I suspect, it's hard to see how Trading 212 'rejecting' the money (which I think is a red herring and impossible), which would have the outcome of the funds being re-deposited in his bank, would solve the primary problem of the money having been withdrawn from a non-flexible Santander ISA.

Unfortunately I suspect he'll be out of luck on this £20k until the next tax year, unless I've misunderstood the situation.

soulsaver

He should talk to Santander as I believe there is (at least, was) a 'repair' than can be done in the event of an oversight. Guess it must be within a limited period but they'll know the rules.

masonic

If he acted on incorrect advice from one of the ISA providers, then there would be a route to reinstating the money: https://www.gov.uk/guidance/transfer-an-isa-if-youre-an-isa-manager#cash-withdrawn-in-error-as-a-result-of-incorrect-transfer-advice-by-an-isa-manager

However, that doesn't seem to be the case in this instance. It would be for Santander to make the case to HMRC if there was potential incorrect advice at the root of this.

Santander are somewhat unusual in that they allow you to set up direct bank transfers from many of their savings accounts to any external account - I presume this is how the money was sent to Trading212's holding account and then redirected to his Invest account.

We can only speculate what would have happened if Trading212 had bounced the inward payment. Most likely Santander would have either rejected it or treated it as a new 2025/26 subscription. If the latter, then he could have been none the wiser that he'd subscribed £40k this tax year as a result until HMRC caught up to the situation some years later.