Does an ISA last forever?
Discussion
I have savings built up in an ISA wrapper (topped up year over year) for the last 3 years at the max amount (so £60k worth of ISA investments).
If I withdraw that £60k and spend it on something (a house, a car, whatever), do I still 'hold' that £60k ISA wrapper or does it disappear and I have to start again from scratch?
If I do still hold it, how does that work in practice? Say I want to invest £25k in the 2021/22 tax year, do I just invest in a fund from a provider who offers ISA accounts and declare the additional £5k above the £20k annual allowance is protected by my previous ISA wrapper?
Thanks!
If I withdraw that £60k and spend it on something (a house, a car, whatever), do I still 'hold' that £60k ISA wrapper or does it disappear and I have to start again from scratch?
If I do still hold it, how does that work in practice? Say I want to invest £25k in the 2021/22 tax year, do I just invest in a fund from a provider who offers ISA accounts and declare the additional £5k above the £20k annual allowance is protected by my previous ISA wrapper?
Thanks!
b
hstewie said:
hstewie said: I think you're over-thinking things.
If it's in an ISA wrapper it's wrapped.
Once you take it out it's unwrapped.
If you've not used your ISA allowance you can put in up to that allowance.
Probably am overcomplicating it! If it's in an ISA wrapper it's wrapped.
Once you take it out it's unwrapped.
If you've not used your ISA allowance you can put in up to that allowance.
Thanks for the response. So, in short, if you take the money out of the ISA and don't top it up again before the end of the tax year, you lose that part of the ISA wrapper you have withdrawn?
E.g. Put 20k into ISA on April 1st 2021. Withdraw 5k from ISA on July 22nd 2021. Don't top up before March 31st 2022. ISA value on April 1st 2022 = £15k.
22s said:
Probably am overcomplicating it!
Thanks for the response. So, in short, if you take the money out of the ISA and don't top it up again before the end of the tax year, you lose that part of the ISA wrapper you have withdrawn?
E.g. Put 20k into ISA on April 1st 2021. Withdraw 5k from ISA on July 22nd 2021. Don't top up before March 31st 2022. ISA value on April 1st 2022 = £15k.
Yes.Thanks for the response. So, in short, if you take the money out of the ISA and don't top it up again before the end of the tax year, you lose that part of the ISA wrapper you have withdrawn?
E.g. Put 20k into ISA on April 1st 2021. Withdraw 5k from ISA on July 22nd 2021. Don't top up before March 31st 2022. ISA value on April 1st 2022 = £15k.
Just to overcomplicate things myself I'm sure I've read of some situations where providers will let you re-add money to an ISA but I can't remember where or in what circumstances.
But broadly speaking if you put £20K into your ISA in a single tax year and then withdraw it you can't put £20K back in in the same tax year.
Just to stick my 2p in. You only get £20k a year isa allowance and this runs the same as the April to April tax year.
While your investment remains within the isa the amount you build up does not act as a carry forward allowance.
In your example of £60k if you withdraw it from the isa your allowance is only £20k per year so it will take you a minimum three years to build it back up to the original £60k.
You can move it between isa providers but you have to make sure it remains in an isa at all times. You cannot therefore withdraw it to your bank account and then put it back in an isa even if the time in your bank is measured in minutes.
While your investment remains within the isa the amount you build up does not act as a carry forward allowance.
In your example of £60k if you withdraw it from the isa your allowance is only £20k per year so it will take you a minimum three years to build it back up to the original £60k.
You can move it between isa providers but you have to make sure it remains in an isa at all times. You cannot therefore withdraw it to your bank account and then put it back in an isa even if the time in your bank is measured in minutes.
Just to add some clarity (as an ISA Plan Manager), You can take out anything you want, and replace this in the same tax year.
What is not largely understood is that you can also take previous year's contributions out and repay them back in (during the same tax year) providing this is within your annual contribution limit.
As has been said, please do make sure your ISA provider allows Flexible Access, many don't.
PS I have edited this due to my stupidity!
What is not largely understood is that you can also take previous year's contributions out and repay them back in (during the same tax year) providing this is within your annual contribution limit.
As has been said, please do make sure your ISA provider allows Flexible Access, many don't.
PS I have edited this due to my stupidity!
Edited by JulianPH on Tuesday 24th November 19:30
JulianPH said:
Just to add some clarity (as an ISA Plan Manager), You can take out anything you want, but only replace this up to you annual contribution level.
I got an idea from somewhere, not that I need to try it, that you can clear out your ISA if you need short-term funds, then put it all back in within a short timeframe afterwards. Or have I got the wrong end of the stick?JulianPH said:
Just to add some clarity (as an ISA Plan Manager), You can take out anything you want, but only replace this up to you annual contribution level.
So this caps how much money you can get back in without going over your annual personal allowance.
The maximum you can take out and replace in any given tax year is therefore £20k. Anything else is considered a new contribution.
What is not largely understood is that you can also take previous year's contributions out and repay them back in during the same tax year) providing this is within your annual contribution limit.
As has been said, please do make sure your ISA provider allows Flexible Access, many don't.
If I put £10k into my 19/20 ISA and £20k into the current 2/21 ISA, can I add another £10k to last years ISA to take advantage of the allowance (as you would a pension)?So this caps how much money you can get back in without going over your annual personal allowance.
The maximum you can take out and replace in any given tax year is therefore £20k. Anything else is considered a new contribution.
What is not largely understood is that you can also take previous year's contributions out and repay them back in during the same tax year) providing this is within your annual contribution limit.
As has been said, please do make sure your ISA provider allows Flexible Access, many don't.
There seems to be a bit of confusion on this.
On the contribution front you can only contribute £20k per tax year into an ISA. It is a use it or lose it allowance so if you don't use the whole allowance in any year you cannot carry it forward.
If you hold a Flexi ISA you can withdraw as much you like and then pay it back in, as long as the withdrawal and pay back take place in the same tax year.
So in this example if you have £60k in your isa at the start of 20/21 tax year you can withdraw the £60k and pay £60k, or any part of it back in within the 20/21 tax year.
In addition to that could add an additional £20k
Hope that helps
Cheers
On the contribution front you can only contribute £20k per tax year into an ISA. It is a use it or lose it allowance so if you don't use the whole allowance in any year you cannot carry it forward.
If you hold a Flexi ISA you can withdraw as much you like and then pay it back in, as long as the withdrawal and pay back take place in the same tax year.
So in this example if you have £60k in your isa at the start of 20/21 tax year you can withdraw the £60k and pay £60k, or any part of it back in within the 20/21 tax year.
In addition to that could add an additional £20k
Hope that helps
Cheers
IIRC, none of the IM offerings are available from any other investment platforms. If this remain the case, I expect you will have to sell your existing IM holding for cash, then submit an ISA transfer request in your new platform. FYI, ISA transfer is dead easy, and it took literally a few mins to apply online with an eta 4 weeks to completion.
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