Stocks and Shares ISA

superdog7

I have a Stocks and Shares ISA which has an Uninvested Cash element and an Investments element.

If I transfer £x from my current account into the Cash element ready to make a trade but then decide not to trade, so I then transfer £x back to my bank account, am I considered to have used £x of my annual allowance even though I haven’t actually made an investment?

eskbanker

Depends if it's a flexible ISA - if it is, then withdrawals effectively reinstate that amount of remaining allowance available.

However, if it isn't a flexible ISA then paying money in, even if it isn't invested thereafter, counts towards your annual allowance and isn't reversed by withdrawing again…

El_Torro

Yes, you are.

If your ISA is a Flexible ISA then you have more flexibility (clue's in the name 🙂). Any money you withdraw this tax year can go back in and you don't lose any allowance.

Flexible ISAs tend to be Cash ISAs though there do seem to be some S&S Flexible ISAs lurking out there.

superdog7

Thanks. I know there are plenty of flexible cash ones. The S&S ISA I have gives no interest on the cash element so it isn't really invested! Seems odd that If I decide not to actually trade with the cash then I am still considered to have used some of my allowance.

marlot

Do you know about money market funds?

You can use them to essentially get interest on spare cash. https://www.hl.co.uk/funds/money-market-funds

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82124693#Comment_82124693

The allowance caps the value of ISA contributions into the wrapper from outside it, so it doesn't matter if you don't invest it once in the wrapper. Conversely, if you sell investments, the money stays within the wrapper and can be reinvested without counting as a new contribution…

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82124693#Comment_82124693

The ISA rules are complicated enough, without adding yet another layer.

Angelica123

Why not transfer the cash to a cash ISA so it stays within the ISA wrapper. You can still do that until April next year when the new ISA rules kick in.