From 6 April 2016 onwards, investors have been able to take money out of a cash ISA or a stocks and shares ISA and put it back in without losing that part of their allowance, provided they put it back in the same tax year.
This means that at Moneyfarm, a disinvestment will credit your ISA allowance for the current tax year allowing you to make a subsequent investment into your ISA within the same tax year.
Example:
You have £50,000 in your ISA of which £20,000 was invested within the 2022/23 tax year (ISA allowance = £0)
You disinvest £35,000 from your ISA in Jan 2023 (ISA allowance = £35,000)
You invest £25,000 into your ISA in March 2023 (ISA allowance = £10,000)
On the 6th April 2023 your ISA allowance is reset to £20,000 for the 2023/24 tax year and you’ve lost £10,000 from 2022/23 ISA allowance.
With the flexi-allowance ISA rule it means that you will always be in control when it comes to adding to or withdrawing from your Moneyfarm ISA.
Please note, money must be specifically within an ISA portfolio for it to be counted as within the ISA wrapper