Quick and stupid ISA allowance question

[nickfrog]

I have just sold around £15k of ISA sheltered Vanguard investments to increase cash.

I haven't used my 2024/25 ISA allowance yet but Vanguard has increased it to around £35k as if I could buy back that £15k ISA in addition to my unused £20k.

Is that right? Sounds too good to be true?

I have some GA to bed and ISA so that would come very handy but I need confirmation I can do that on £35k for this tax year.

Edited by nickfrog on Wednesday 4th December 14:53

[Mr Pointy]

If it's a flexi ISA then yes, you can return funds taken out in the same tax year.

https://www.moneysavingexpert.com/savings/flexible...
https://www.nationwide.co.uk/savings/help/isa-flex...

[nickfrog]

Cheers but it isn't a cash ISA at all just a boggo Vanguard Equity ISA.

[nickfrog]

Just called them and it is Flexi, including S&S funds.

[okgo]

vanguard ISA are flexible I believe? https://www.vanguardinvestor.co.uk/need-help/answe...


Either way, best to just phone them I would have said.

[OIC]

Flexi ISAs are a thing of beauty.

Rachel from accounts will undoubtedly be splitting infinitives while eyeing them up for destruction.

S&S and Cash ISAs can be flexible products - ask your platform provider if yous are.

So you can do what you like in terms of removing some or all of the cash in the ISA (leave £1 in it to keep the account open).

As long as you return some or all of it within the same tax year.

This is totally independent of your annual £20,000 new money allowance.

If you happen to have a big wedge in an ISA wrapper then you have a great deal of flexibility to leverage side project investments without having to get a loan or sell any possessions.

[nickfrog]

^ yes I have realised that now, almost by accident. Thank you.

[okgo]

OIC said:

Flexi ISAs are a thing of beauty.

Rachel from accounts will undoubtedly be splitting infinitives while eyeing them up for destruction.

S&S and Cash ISAs can be flexible products - ask your platform provider if yous are.

So you can do what you like in terms of removing some or all of the cash in the ISA (leave £1 in it to keep the account open).

As long as you return some or all of it within the same tax year.

This is totally independent of your annual £20,000 new money allowance.

If you happen to have a big wedge in an ISA wrapper then you have a great deal of flexibility to leverage side project investments without having to get a loan or sell any possessions.

I think it’s only the current year you can have access to and put back in? So £20k..?

[Tighnamara]

okgo said:

I think it’s only the current year you can have access to and put back in? So £20k..?

Incorrect, as above, you can have put nothing in ISA this tax year and still remove £££ but have to replace in the same tax year the funds were removed.

Important part is ISA being a flexible type and allowing this transaction.

[okgo]

Fair enough. Too late to be useful now to me but good to know!

[SturdyHSV]

I hadn't realised the 'flexible' bit included everything in the ISA and not just the annual allowance. That's very interesting to know for the future!

[Tighnamara]

okgo said:

Fair enough. Too late to be useful now to me but good to know!

I only found out about it the other year, don’t think it is very clear when opening an ISA - or maybe it is and I completely missed it

[PM3]

Tighnamara said:

okgo said:

Fair enough. Too late to be useful now to me but good to know!

I only found out about it the other year, don’t think it is very clear when opening an ISA - or maybe it is and I completely missed it

Genuinely curious .... in reality what is the benefit of such facility ? Ok its handy for people with a cash emergency fund and due to unforseen circumstabce they need an unplanned wedge for a couple of months ( which would create a surge in need for funds to put back in before deadline )

For long term investing, especially in S&S what use ?

[nickfrog]

I can't think of any realistic benefits either. For me it's brilliant as I have slowly started to de-risk by cashing in US equity stuff (I am retired) yet I still have plenty of GA that is unsheltered hence the Bed and ISA rather than pay CGT on the GA. I normally only B&I £20k per year but this year and next year I am able to do that plus any ISA I cashed in which means I'll shelter the GA quicker than expected.

[Tighnamara]

PM3 said:

Genuinely curious .... in reality what is the benefit of such facility ? Ok its handy for people with a cash emergency fund and due to unforseen circumstabce they need an unplanned wedge for a couple of months ( which would create a surge in need for funds to put back in before deadline )

For long term investing, especially in S&S what use ?

Obviously not something most would use, but can be good for a house purchase whilst selling another house.

Granted you have the risk of not selling house within the timeframe but if early in the tax year you have that period to use the ISA funds, sell house and pay back into ISA.

You have lost that investment period but have cash to use to your benefit in that period whilst still being able to return it to the tax free wrapper.

Not for all, but it is useful if required in certain personal scenarios if no free cash elsewhere.

[PM3]

^ and ^ ^

Indeed. I was not being negative about it, I was curioous if I was missing a trick . The bridging house cash ( meaningless to me ) is a good example
I am retired now, but take no pension yet and manage on existing cash deposits ( largely ) but I could certainly imagine a bit of ISA to cash juggling in future

[bmwmike]

wow, I didn't realise that either, that you could pull the full amount and put it back. That's helpful in some scenarios - e.g. we had a big outlay earlier this year and took some isa cash, but now i have the money again i can put it back.

[Mr Pointy]

nickfrog said:

I can't think of any realistic benefits either. For me it's brilliant as I have slowly started to de-risk by cashing in US equity stuff (I am retired) yet I still have plenty of GA that is unsheltered hence the Bed and ISA rather than pay CGT on the GA. I normally only B&I £20k per year but this year and next year I am able to do that plus any ISA I cashed in which means I'll shelter the GA quicker than expected.

But you still only get the £3000 CGT allowance? You'll pay CGT on any gains over that amount.

[okgo]

PM3 said:

Genuinely curious .... in reality what is the benefit of such facility ? Ok its handy for people with a cash emergency fund and due to unforseen circumstabce they need an unplanned wedge for a couple of months ( which would create a surge in need for funds to put back in before deadline )

For long term investing, especially in S&S what use ?

I needed to find a large sum to complete on a transaction by a certain date. I’d have go the funds back at bonus time which could have put it all back in.

Yes, beyond that, not that useful.

[nickfrog]

Mr Pointy said:

nickfrog said:

I can't think of any realistic benefits either. For me it's brilliant as I have slowly started to de-risk by cashing in US equity stuff (I am retired) yet I still have plenty of GA that is unsheltered hence the Bed and ISA rather than pay CGT on the GA. I normally only B&I £20k per year but this year and next year I am able to do that plus any ISA I cashed in which means I'll shelter the GA quicker than expected.

But you still only get the £3000 CGT allowance? You'll pay CGT on any gains over that amount.

Yes sure and the earlier I can Bed and ISA the less exposure to CGT.