Starting from the 2016/2017 tax year ISA providers can offer flexible ISAs. It is a feature that an ISA provider can offer, rather than a different type of ISA. A flexible ISA allows you to withdraw money from your ISA (Cash, Stocks & Shares or Innovative Finance ISA) and put it back in later in the year without losing any of your allowance. This means you can withdraw money from your ISA and then any subsequent subscriptions you make in the same tax year that would previously have counted towards your ISA allowance will now only do so once you have fully replaced the amount you withdrew.

For example, if you subscribed £5,000 into your IF ISA on the 7 April (reducing your remaining allowance to £15,000) and then withdraw £2,000 on 10 May, you could subscribe up to a further £2,000 without it reducing your annual allowance. If you were to then subscribe an additional £1,000 on 12 June, your annual allowance would reduce to £14,000. You must return the £2,000 to your ISA before the end of the tax year. If you return the money in the new tax year, it would count towards your next year’s annual allowance.

You can also withdraw money that you subscribed to your ISA in a previous tax year and return it without losing its tax protected status, as long as you return it in the same tax year. For example, if you have an ISA value of £50,000 that you have been building up over the years, you can withdraw up to £50,000 and then return the money to your ISA without it counting towards your allowance, as long as it is returned in the same tax year.

The Abundance IF ISA is a flexible ISA so you have the flexibility to take out and return any uninvested cash if you need to within a tax year.

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