Now that both Cash and S&S ISAs are flexible, I have a question as to how it works with regards to withdrawals.
If for example I deposited £20,000 and then withdrew that same £20,000 later on, that would reset my deposits back to £0?
And is there a limit to this. As I have an employee SAYE I was planning to transfer when it expires later in the year and hoped I would be able to repeat that process a few times to avoid CGT.
I think it’s only reset to zero in the account you withdrew it from. So you couldn’t withdraw it from T212 and put it into another institution as I understand it.
Yes, that is my understanding as well. You would have to put it back in to the original account and then perform a transfer.
Additionally to the OP, it was news to me a few months ago, but flexible ISAs not only let you withdraw and return the current year’s allowance, they let you withdraw and return your entire balance. So if you had £100k in your ISA, you could withdraw all of it and return all £100k within the same tax year. If you cross over to a new tax year however, you lose the ability to put it back in, so be careful.
I had to think about this a bit. I don’t know the answer but wanted to clarify what you were trying to do. SAYE scheme payouts are exempt from CGT earned during the scheme if transferred within 90 days of payout to an ISA. So you can transfer up to 20k no problem and if the 90 days falls across the end of the tax year , make a second transfer against the following year’s allowance.
It feels like you want to transfer 20 k to an ISA to rebase the CGT then move some of this to a GIA, which would be liable to CGT but only on gains after coming out of the ISA? After that you could move a further funds from SAYE to ISA and rebase CGT etc. I don’t know if rules forbid that?
One other thought was that you may need to do an in species transfer to the ISA (if so that’s one of the cases where you could do this.) if so, worth checking that t212 can do this as there are some restrictions on transfers at present.
I’m not sure this is correct. As I understand it sales from a SAYE are capital gains tax liable. However sales directly from a Share Incentive Plan are not.
It applies to both as I understand it
Apologies for the delay in replying.
Hypothetically: If I maxed a 5 year SAYE scheme, at £500 for 5 years, I’d have saved £30,000. Now after the 5 years my option price to buy is £9 and the current share price on the day of expiry is £18, thus effectively making my £30,000 now £60,000. (3333 shares)
I understand there is a 90 day window from your options being purchased to transfer them to an ISA.
Within that 90 day window, having used none of my flexible ISA allowance so far and with a Letter of Appropriation, I transfer 1,111 shares / £20,000 into the flexible ISA. Once the shares are in my ISA I sell them £20,000 and withdraw the money, resetting my flexible ISA allowance to 0.
Then I could repeat the process two more times? It seems like an obvious loophole that must have been shut off but I’m struggling to find information on it.
Thanks.
EQi says you can do exactly that
Well done for finding that answer. A shame that flexible ISAs were not around for my last employee share scheme.
My only additional comment is that this requires multiple in specie transfers . As Trading 212 are currently only 40% rolled out with these, I would be checking that they can handle this and perhaps looking at other flexible ISAS providers as backups.
Hi Jamie
I am in the exact same situation as you, possibly even the same Sharesave plan which matured 1st October.
Did you make any progress with this? Would be good to hear. I’ve been in contact with a few brokers so fingers crossed there’s one that offers a flexible S&S ISA who accepts SAYE transfers.
I have a flexible S&S ISA with IG Group holdings, I’ve transferred to them without any issues albeit I never had enough to require multiple transfers, one was enough for me.