Allowance backdating

Posted by / 22-Aug-2020 03:36

You can withdraw money from this account, and - as long as you put it back before the end of the current tax year, and replace exactly the same amount - it won't go towards your current tax year Isa allowance.So, for instance - you paid £20,000 into a cash Isa two years ago, and you take out £3,000.If you withdraw more than you've deposited in the current tax year, then it will be taken from money you've deposited in previous tax years.When you come to pay the money back in - which, again, you must do before the end of the current tax year (5 April) - this works the other way around; money you deposit is first used to refill cash Isas from previous years, and then your cash Isa from the current tax year.However, to move money you've paid in the current tax year, you must move all of it.Note that not all Isas accept transfers - so check before you apply.

There's no specific limit for how many Isas you can hold overall - but you can only pay into one type of each Isa in each tax year (we explain this more fully below). You can have several cash Isas, stocks and shares Isas, innovative finance Isas and lifetime Isas, and only pay into one each year - but you can only have one Help to Buy Isa at a time.This also applies to cash held in a stocks and shares Isa and Innovative Finance Isa, but not Junior Isas or lifetime Isas.But there are a few extra caveats, depending on when the money in the Isa was saved.For example, you've paid £15,000 into a cash Isa account in the current tax year. You can then deposit £10,000 into the account; the £5,000 you previously withdrew, and an additional £5,000 that would take the total deposited amount up to £20,000.Withdrawals you make in this case are firstly taken from whatever money you've deposited in the current tax year.

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