Withdrawing money from ISA

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
3 replies 753 views
luke123456luke123456 Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi

I wanted to ask. If I withdrew money from an ISA account then this would decrease my amount available to save, such as withdrawing £600 would mean only £3000 left to invest in that tax year....am I right?

If so, If I wanted to withdraw this £600 now, before the 5th April, would this mean that I would still be able to invest £3600 in 09/10....? and open a new ISA if I wanted with a different bank....?

Thanks

Replies

  • BaldurBaldur Forumite
    6.6K Posts
    luke123456 wrote: »
    If I withdrew money from an ISA account then this would decrease my amount available to save, such as withdrawing £600 would mean only £3000 left to invest in that tax year....am I right?
    Yes.
    If so, If I wanted to withdraw this £600 now, before the 5th April, would this mean that I would still be able to invest £3600 in 09/10....?
    Yes - it's a different tax year.
    and open a new ISA if I wanted with a different bank....?
    You can hold a Cash ISA with a different institution each tax year, if you like, but can only pay into one CASH ISA per tax year.
  • luke123456luke123456 Forumite
    342 Posts
    Part of the Furniture 100 Posts Combo Breaker
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    Thanks very much

    Last question. As you said you can only put money into one ISA each tax year. Can you withdraw money from one Cash ISA and deposit in another? Thanks
  • BaldurBaldur Forumite
    6.6K Posts
    luke123456 wrote: »
    Last question. As you said you can only put money into one ISA each tax year. Can you withdraw money from one Cash ISA and deposit in another?
    If you mean that you want to withdraw £600.00 from your 2008/9 Cash ISA today and deposit it into a new Cash ISA account on Monday 6th April (start of the new tax year), yes you could, but it will reduce your overall tax-free savings potential, as you would only be able to add another £3,000 of new money to ISA 2.

    Generally, it's far better to look for a new provider that accepts ISA transfers, simply complete their transfer form and let them arrange the transfer of your old funds, which maintains the tax-free status of the funds. As soon as you withdraw money from a Cash ISA those withdrawn funds lose their ongoing tax-free status.
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