Flexible ISAs across tax years

Hi all,

I’m trying to understand an edge case with how ISA allowances work across tax years with flexible ISAs (specifically the Monzo instant access one).

If I understand correctly, a flexible ISA would allow you to repeatedly deposit and withdraw money without consuming your ISA allowance. What I’m not clear on is what happens if you withdraw first, then deposit.

Say I have just over £20k available today and have used none of my ISA allowance. I need some of that money for rent etc this month. If I put all of my money into the ISA today, then remove £5k it tomorrow (in the new tax year), am I now able to deposit £25k over the course of the tax year?

@mjclarke94

You can withdraw and replace funds in a flexible ISA regardless of when the original deposit was made, as long as the withdrawal and subsequent re-deposit is made in the same tax year.

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Yes.

In any given tax year, your deposit limit for a flexible ISA is the ISA subscription limit (£20K**) + whatever you have withdrawn earlier in that tax year.

** Note subscription limit here assumes you are not also subscribing to a different ISA in the same tax year. If you are, you need to remember that its £20K spread across all ISAs, not £20K per ISA.

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I can see a whole lot of people getting caught out with the limits in the coming year as you can open loads of ISAs yet there’s no cross checking on deposits until the year is over.

Yeah, I’m doing all of this on just the one ISA to make sure I stay the right side of the limits.

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Just to follow up on this. It sounds like you already know this and the above was just misphrased, but you can’t put all of it in today, you can only put £20k in today.

Yeah, poor phrasing on my part. Thanks for sanity checking though!