Flexible Cash ISA - opening second one with new provider - what counts as this year’s allowance?

NormalforNorfolk

I have a flexible cash ISA with Halifax but am looking to transfer £15k of the existing balance into a flexible ISA with another provider to get a better interest rate. The new provider ISA doesn’t do ISA transfers so I will be withdrawing £15k from my Halifax ISA and paying into the new ISA, and as such I realise the deposit into the new ISA will be treated as part of this year’s £20k allowance which I am comfortable with. For reasons I won’t go into I used to make monthly payments into my ISA but had to pause these, however in April this year (after the 5th) I needed to withdraw a total of £1700 from my ISA and then I made a one off payment of £1000 back into the ISA at the end of April. Does that £1000 get treated as part of my 2026-27 ISA allowance or as part of the reimbursement of the £1700 which is from funds deposited in previous years. I am aware that it is possible to have more than one Cash ISA and pay into both during the year as long as the £20k limit is not exceeded - so when I open the new ISA will I have a total remaining allowance of £5k available to pay in or does the £1000 paid into the Halifax ISA also count, leaving me with a total £4k remaining allowance?

MeteredOut

So long as your ISA is flexible, if you withdraw and redeposit funds in the same tax year, the redeposit won't count towards this years allowance, so you can use your full allowance with the new ISA.

Are you sure the new provider doesn't allow transfers in, or is it that you get the headline rate for new money only?

NormalforNorfolk

Thanks - both ISAs are flexible so on that basis when I open the new ISA, it will give me £5k remaining allowance to pay in to either ISA during the rest of the year?

MeteredOut

https://forums.moneysavingexpert.com/discussion/comment/82098098#Comment_82098098

So with your Halifax ISA, you have £x from previous years ISA allowances, have withdrawn £1700 and redposited £1000 in this tax tear. You can still redeposit £700 in this tax year without affecting this years allowance.

If you then withdraw another £15K from this ISA (again from previous years allowances), and pay this into a new ISA, you've used £15K of this years allowance.

So, you've still got £5K of allowance left. If you deposit £5K in your new ISA, that's used all £20K of this years allowance.

But, your original ISA still has £15,700 of previous years subscriptions available for redeposit in this tax year, so you could put the £5K back there and still have £5K allowance remaining for this tax year, and you could still redeposit £10,700 in this tax year.

Things work differently if the Halifax ISA has this years subscriptions which you are wanting to withdraw (even flexibly).

sausage_time

This is a good summary guide:

https://www.moneysavingexpert.com/savings/flexible-isas/

NormalforNorfolk

Many thanks Metered Out for those very helpful comments. Yes, I’ve checked (via Moneyfactscompare website and the provider’s website) and the headline rate is for new money, not transfers of previous years’ ISA savings,hence why I’ve got to withdraw the funds from my Halifax ISA first.