We are delighted to announce that we have made our IFISA flexible.

Please keep in mind that the rules on flexible ISA are complex and you should take independent advice or consult HMRC if you are in any doubt as to the extent to which you can withdraw and replace funds across different ISAs. Details on how to get in touch with HMRC are set out below.

What is the Flexible ISA?

Flexible ISA means that you can replace, in whole or in part, cash you have withdrawn, without the replacement counting towards your subscription limit for a tax year as follows:

• withdrawals are deemed to be firstly of subscriptions for the current tax year and secondly of subscriptions for previous tax years: and
• replacements are deemed to be firstly of subscriptions for previous tax years and secondly of subscriptions for the current tax year.

How does the flexible IFISA work?

You have an ISA subscription allowance of £15,240 that can be deposited across all ISAs (cash, stock & share, and IFISA) during the current tax year up to and including 5th April 2017. Each ISA may also have a previous subscription for previous tax years.

Withdrawals you make from your LandlordInvest IFISA will first reduce the current year's subscriptions. Once there are no current year's subscriptions left, previous year’s subscription will be reduced creating a 'replaceable amount'.

Deposits made during the same tax year will replace any replaceable amount first. After this, deposits will count towards current year's subscriptions.

In practice

Example 1

You open a flexible ISA on the 22nd February 2017 and subscribe £10,000 and then withdraw £6,000 in the current tax year - your current year's subscriptions will be £4,000.

You can now subscribe up to £11,240 in the current tax year up to and including 5th April 2017.

If you were to deposit £5,000 into your flexible ISA on March 14th 2017, this would bring your current year's subscriptions to £9,000. And you would be able to subscribe a further £6,240 up to and including 5th April 2017.

Example 2 

You have a flexible ISA with a total balance of £25,000 made up of £10,000 current year's subscriptions and £15,000 of previous year's subscriptions.

You withdraw £20,000, bringing the total balance to £5,000. The current year's subscription is depleted first, bringing it to nil. The remaining £10,000 is then removed from previous subscription creating a replaceable amount of £10,000.

You may now, in the current tax year, deposit up to £25,240. The first £10,000 would count towards the replaceable amount, and then the remaining £15,240 would count towards the current year's subscription, using all of it as it is currently nil.

IMPORTANT NOTICE

The rules on flexible ISA are complex and you should take independent advice or consult the HMRC helpline if you are in any doubt as to the extent to which you can withdraw and replace funds across different ISAs.

You may reach HMRC’s helpline on this phone number: 0300 200 3312.

The Helpline is open from 8.00am to 8.00pm Monday to Friday; and 8.00am to 4.00pm on Saturdays and Bank Holidays.

You may also find further ISA guidance on GOV.UK.

Our blogs are for information purposes only. This content is not financial, legal or tax advice.  Should you require any advice in relation to the earnings you make from LandlordInvest we recommend seeking independent professional advice. Links to other sites are provided for your convenience but LandlordInvest accepts no responsibility or liability for the content of those sites or of any external site. The information in this blog is correct at the time of posting.