What is a Flexible ISA?

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Your capital is at risk and investments are not covered by the Financial Services Compensation Scheme (FSCS).

If your ISA is ‘flexible’, you can take out cash then put it back in during the same tax year without reducing your current year’s allowance.  The Simple Crowdfunding IF ISA is a flexible ISA.      

Example 1

Your allowance is £20,000 and you put £8,000 into an ISA during the 2019 -20 tax year. You then take out £4,000. The amount you can now put in during the same tax year is:

  • £16,000 if your ISA is flexible (the remaining allowance of £12,000 plus the £4,000 you took out)
  • £12,000 if your ISA is not flexible (just the remaining allowance)  
If you have funds in your flexible ISA at the beginning of the tax year, you can withdraw and replenish these in the same way, but the order of how this is done is important.  


Example 2

At the start of the tax year you have funds in your flexible ISA.  Providing you have not put any new money into this account, you can withdraw some or all of the funds during the tax year and then replenish it without this counting towards this year's allowance.   

Example 3

You have £20,000 in our flexible ISA at the start of the year.  You then add £3,000.  Any money you withdraw is treated as coming from the new money first, then the existing pot.  If you withdraw £2,000, this would all come from the current years allowance.  If you were to withdraw £5,000, the first £3,000 would be from this year and the other £2,000 from the existing pot.  When you put money back in the process is reversed and is allocated to the existing pot first.  Should you only put £1,000 back, then your current year's allowance will still be £20,000 but you cannot put any of this into another ISA of the same type (unless you transfer the account).



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