UK, ISA, allowance, rebalancing: can I rebalance without killing allowance?

Hi!
as I understand it, the yearly 20k GBP ISA allowance pertains to paying INTO your ISA account. Does it also apply to reinvesting profit that ends up inside your ISA account?

If I hold, let’s say, 50% equity ETFs and 50% bond ETFs in my ISA account, and a sudden surge of the equities ETF means I sell some for profit that I want to invest again into my bond ETFs to get back to my 50/50 ratio, would that reinvested profit count towards my allowance if it never left the ISA account?

Hey @mmmmmmrk, :wave:

Any gains you make on your investment are not counted as part of your stocks and shares ISA allowance, i.e. gains are profits you make from your investments.

If you sell any shares in your stocks and shares ISA, you can reinvest the proceeds in the ISA. They will not count towards your annual allowance either. :v:

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Hot damn, ISAs really are magical. Thanks! This means I can rebalance inside an ISA as I want :blush:

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Yes you can do whatever you want inside the ISA. However if you withdraw these profits and then deposit more money later this counts as a contribution

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Over a few years you can build up a decent amount in ISAa without any concerns about capital Gains Tax. Shifting things around within the ISA wrapper is quite normal, it’s taking out and putting back you need to avoid unless you’re never investing near the limit - 20K a year now is fairly generous as a limit.

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I don’t know how difficult it is to implement but you can get flexable ISAs. Apparently it’s optional and providers don’t have to offer it. Again, I don’t know what costs or complications are of doing so.

@nickspacemonkey they can be found, but for now it is not the ISA type as provided by T212 so not of much good to any of us :rofl:

I suppose it is somehow possible to transfer money between a non-T212 cash ISA and T212? Then they are of some use, if cumbersome :slight_smile: Or would that affect the allowance again?