Withdraw from flexible ISA with provider A and open a new non-flexible ISA with provider B?

[boutdatgospel]

I can't seem to find a clear answer to the following scenario:

- If I open a flexible cash ISA with provider A and deposit the full £20k allowance

- In the same tax year, can I then withdraw £1k from provider A, and deposit £1k into a new stocks and shares ISA with provider B, without exceeding the allowance?

I can see lots of information about putting money back into the same flexible ISA you withdrew it from, but nothing about putting the money into a new ISA instead.

 

[perseverancethroughfaith]

@boutdatgospel edit: This no longer applies for 2024-25 tax year onwards

You can withdraw current tax year contributions from a Flexible Cash ISA and put them into a ISA of another type (which Stocks and Shares ISA is) without exceeding the allowance.

It just isn't allowed for previous tax year contributions or income earned within the ISA, which have to only go back to the original ISA they were withdrawn from.

It's in the ISA legislation, which calls it a replacement subscription.

My original answer on this to another post includes references to the points of the legislation

https://www.reddit.com/r/UKPersonalFinance/comments/yoj3tt/_/ivejvig

 

[endofdayz]

@perseverancethroughfaith "You can withdraw current tax year contributions from a Flexible Cash ISA and put them into a ISA of another type (which Stocks and Shares ISA is) without exceeding the allowance."

Are you saying that the above no longer applies for 2024-25 tax year onwards?

I'm also looking for information as I'm doing a similar thing to OP.

• I have a flexible cash ISA which I deposited and withdrew small chunks very often. What I have left in the ISA as of now is close to £0. But the total amount I have deposited to this ISA over the year is more than £20k (but withdrew most of it).
• I thought my ISA allowance was still ~£20k. I then opened a non-flexible S&S ISA and deposited £5k. But apparently this isn't allowed as my S&S ISA is non-flexible. And I have exceeded my ISA allowance by doing so. Is it correct? I'm wondering if I need to phone HMRC now which is quite painful.

 

[jlee_1227]

@boutdatgospel Just piggy-backing on this thread: I have just one cash ISA. Say if I top it up to £20K this year, will I be able to withdraw say 1K and then put this 1K back like in a month?

 

[shadow2]

@boutdatgospel You wouldn't want to take the £1k out, but if you had, you'd put it back into ISA A, open ISA B (with no contribution) and request a partial ISA transfer in from A.

 

[perseverancethroughfaith]

@shadow2 Currently current tax year contributions (which is what the OP refers to) have to be transferred in full if transferred, but partial ISA transfers of previous tax years contributions are allowed without touching the current tax year contributions.

Also refer to my comment about Flexible ISAs able to do what the OP asks.

 

[shadow2]

@perseverancethroughfaith I didn't realise that rule applied when you transfer across ISA types in the same tax year, thanks for the info.

 

[boutdatgospel]

@shadow2 Right sorry I left out some more important information, the deposit to B is time sensitive (promotional offer) and a transfer would either take too long, or not be eligible for the promotion

 

[perseverancethroughfaith]

@boutdatgospel you're fine withdrawing and depositing, snaphunter just doesn't have the right information