Is ISA flexible or not?

on the description says ISA is flexible I said let’s try it with 100gbp. moved it to CFD account and back but now my ISA says 200 as used.

most probably from what I understand ISA became flexible but USED is not really working properly on the APP ?

thanks

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where does it say that the T212 ISA is now flexible. I thought it was going to be made flexible by end of May (hopefully) but I’ve seen nothing to say that’s happened

Screenshot 2024-05-17 at 13.42.23

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Thanks. I have seen no T212 comment in the forums or elsewhere that the change to make it flexible had happened. That clearly says that it has. I would contact/ask T212 for comment and I’d love to know the answer.

Also, I think T212 definition on the screenshot that you provided is wrong (but I’m just a mushroom that knows nothing). The T212 definition says “the allowance is based on the net deposits per tax year”. I believe that the repayment must be AFTER the withdrawal. If the T212 definition was correct I could add £100k to my ISA on 6/4 and then withdraw £80k on 2/4 the following year and have almost a year of tax free investing on funds that shouldn’t be in the ISA. The flexible ISA is meant to let you withdraw money and then pay it back into the ISA later in the same tax year.

This is the definition of Flexible ISA from the Nationwide website (just the first source I looked at):

“You can withdraw funds from current and previous years’ deposits. However, you need to pay the money back in during the current tax year in order for it not to count towards your current year’s ISA allowance.”

So paying the money back in must follow the withdrawal

@Bogi.H can you or @Momchil.G clarify this

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I’ve never seen any official wording to confirm either way whether that is possible.

Is there an HMRC definition somewhere? Where are the ‘official’ rules published?

The rules are on www.gov.uk. For example search for “How to manage ISA subscriptions”.

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The “How to manage ISA subscriptions” page that stehuk refers to is pretty clear. There is also the covering memo uksiem_20160016_en.pdf (legislation.gov.uk)

If you really want to see the detail you’ll have to look through the relevant sections of the legislation but here’s the main section: The Individual Savings Account (Amendment) Regulations 2016 (legislation.gov.uk)

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As far as I know…

For now: no

Is it coming: yes and this year as well. According to 212 the flexibility will start once the cash ISA goes live, and both of them will be flexible from that date.

I think I recall a post saying it would happen when they introduced the cash ISA. In reality I think the change to make a S&S ISA flexible is minimum. From what I’ve read it is basically just a change in the T&Cs for the ISA that’s it but in reality it would also need a very very simple change to the software to modify the calculation for the amount contributed to the ISA each year (the maths and code are extremely simple)

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Agree in principle, but as users could potentially switch between Cash & S&S ISA, it will come. We think it’s simple, but it needs to total up deposits + withdrawals from 2 products, reset logic every tax year, and work for however many thousands of users. The implications of it were to falter is meh :face_with_diagonal_mouth:

Minimum data points would be:

  • Deposit Date, Deposit Amount, Deposit Account, Account ID
  • Withdrawal Date, Withdrawal Amount, Withdrawal Account, Account ID
  • LISA Allowance / start date / end date
  • ISA Allowance / start date / end date

14 data points, so a simple calculation can start to get more complicated.

For LISA available deposit, it’s LISA Allowance less deposits in period plus withdrawals in period.

For ISA available deposit it’s ISA Allowance less LISA allowance plus LISA available deposit, less ISA deposits plus ISA withdrawals in period.

Not saying we will get LISA, but the calculation needs stacked and tested.

I am not sure that you can withdraw money from one type of ISA and repay it into another. If you could and had a LISA and was short of cash one year you could withdraw from a cash/S&S and pay into the LISA which could create issues with the government bonus.

From what I have seen (and I might have missed something) you have to repay into the ISA that you withdrew the money from thus all of the accounting is local to that ISA. The calculations then just require the ISA manager to keep track of “new_withdraw” during the year and a withdraw increases the value and payment into the ISA decreased it provided it doesn’t go below zero and any amount is then part of the annual allowance.

I don’t believe that LISA can be flexible - “Lifetime ISAs are not flexible, so it will not be possible for withdrawals to be made and replaced without affecting your annual Lifetime ISA allowance or your overall ISA allowance.” What is a Lifetime ISA - Skipton Building Society

On the Gov webpage for LISA there is no mention of them being flexible and it is hard to imagine how that would work

Lifetime ISA - GOV.UK (www.gov.uk)

There is a fee for withdrawing from a LISA for anything other than to help with your first property or retirement. It was temporarily removed during Covid.

But as you are highlighting, it’s not as simple as people think.

The way I understand it is, if you withdraw £10 and put it back in it counts towards your £20k so you have used up £20.

That’s not correct. In your example that would be £10 used. In a flexible ISA that would be net net, depending on prior circumstances.

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Hey, everyone :wave:

As suggested by the post and the notification you received earlier today, our Stocks & Shares ISA is now officially flexible :tada: This means that you can withdraw any amount from your ISA and deposit it back without using up your allowance as long as you do it within the same tax year.

The tab should now be displaying the information correctly. If you still see any discrepancies, please send me a private message so I can check the situation further with the team :pray:

You’re right - the repayment always happens after the withdrawal. The definition takes into account that you cannot deposit more than £20,000 during the tax year, hence why the calculation is based on the net deposits per tax year.

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Then can I withdraw part of the funds from T212 and deposit them with another provider, instead of submitting a transfer-in request through the other provider?

No money has to be put back into the vehicle it was taken out of.