smee
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Post by smee on Dec 14, 2017 8:51:24 GMT
I have money sitting idle in a Property Crowd ISA because there are no suitable investments available. I understand that under the terms of a flexible ISA I can take this money out and return it later. The question is about the status of this money once it is taken out. Can it be counted as an unused ISA allowance and put into a cash ISA without going through the transfer process?
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kermie
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Post by kermie on Dec 14, 2017 17:54:06 GMT
Once you withdraw from your Flexible ISA, the cash you receive is treated just like any other cash you have in (say) your current account.
The withdrawn cash does not "add" to your "unused ISA allowance" - that is unchanged. You can put it in a different ISA sure, but as you hint, it would be more sensible to do a transfer. A withdraw-and-re-ISA might make sense if you have not opened an ISA already this year and/or you don't have enough cash to do it otherwise.
If you do put the withdrawn cash into a new ISA, you're gonna have to find some other cash from somewhere to replenish your PropertyCrowd Flexible ISA otherwise you'll lose the allowance on that money in PC, and will not be allowed to replenish it after the end of the tax year (5th April).
It might make sense in your circumstances but TBH, I think the OP highights one of the drawbacks of P2P ISAs - you have to pick carefully and open up an IFISA only with platforms where you are confident of deal flow in order to make best use of the ISA funds.
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smee
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Post by smee on Dec 14, 2017 18:48:24 GMT
Thanks for that information kermie. The answer is probably what I suspected. Another thread seemed to be suggesting that once removed, the money could be kept in an existing cash ISA until it was returned, but it did seem unlikely since that would allow investors to avoid the £75 transfer out fee.
The rules on IFISAs seem very complicated and information websites never seem to explain all the eventualities. I can't help thinking it would be very easy to fall foul of the rules.
You are right to highlight the need to choose the right platform and the different pros and cons means it's not an easy decision.
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