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Post by steveng on Apr 15, 2024 14:00:14 GMT
I've just been reading the updated 4thWay review of Proplend and noticed there is a section on withdrawing interest and adding it back at a later date. I'll paste it below.
It never occurred to me that it's possible to take out interest payments and pay them back in at a later date in that tax year. I've often added cash for a loan and then withdrawn the cash if it wasn't successfully allocated, all in the same tax year. This seems sensible.
With the 2024 tax year ISA rules we can add funds to multiple ISA platforms, so this idea of taking out interest across multiple accounts seems even more appealing.
1. I'm sure the article is right but can anyone else back this up or do it?
2. Long shot, but can unallocated cash from previous tax years be withdrawn and added back in again? (and not counted as this tax year allocation)
4thway's article Re: Proplend ISA:
What more do I need to know?
With the minimum you can lend in a loan being £1,000, you might sometimes find money waiting to be lent for a while, as you accrue interest to lend again. Some lenders withdraw their cash and earn higher interest while waiting for the next opportunity.
In the IFISA, it’s not quite as easy, but still doable. At least one lender using the Proplend IFISA figured out the solution. (If the following steps are too much work for you, rest assured it likely won’t reduce your overall returns all that much by skipping them.)
The lender was earning over £100 interest per month. He elected for Proplend to pay out the interest to his bank account automatically.
Since Proplend’s ISA is “flexible”, it means you’re allowed to take money out that you have put in during the current tax year, and yet put it back in during the same tax year without losing any of the current year’s ISA allowance. So, before a tax year ends, he’s earned over £1,000 in interest that he returns to the ISA.
So long as you top up with at least £1,000 in new Proplend ISA contributions each year, you’ll be able to keep doing this technique for a long time.
Lenders see a running total of the amount paid out in their Proplend account, so they can keep track of what they’re allowed to put back in. And you get an email reminder towards the end of the tax year.
Worst-case scenario, you’ll earn around one percentage point less interest per year as a result of waiting to lend, but the risk also comes down to virtually zero while you’re money is not being lent.
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Post by Ace on Apr 15, 2024 14:31:32 GMT
I've just been reading the updated 4thWay review of Proplend and noticed there is a section on withdrawing interest and adding it back at a later date. I'll paste it below. It never occurred to me that it's possible to take out interest payments and pay them back in at a later date in that tax year. I've often added cash for a loan and then withdrawn the cash if it wasn't successfully allocated, all in the same tax year. This seems sensible. With the 2024 tax year ISA rules we can add funds to multiple ISA platforms, so this idea of taking out interest across multiple accounts seems even more appealing. 1. I'm sure the article is right but can anyone else back this up or do it? 2. Long shot, but can unallocated cash from previous tax years be withdrawn and added back in again? (and not counted as this tax year allocation) 4thway's article Re: Proplend ISA:What more do I need to know?
With the minimum you can lend in a loan being £1,000, you might sometimes find money waiting to be lent for a while, as you accrue interest to lend again. Some lenders withdraw their cash and earn higher interest while waiting for the next opportunity.
In the IFISA, it’s not quite as easy, but still doable. At least one lender using the Proplend IFISA figured out the solution. (If the following steps are too much work for you, rest assured it likely won’t reduce your overall returns all that much by skipping them.)
The lender was earning over £100 interest per month. He elected for Proplend to pay out the interest to his bank account automatically.
Since Proplend’s ISA is “flexible”, it means you’re allowed to take money out that you have put in during the current tax year, and yet put it back in during the same tax year without losing any of the current year’s ISA allowance. So, before a tax year ends, he’s earned over £1,000 in interest that he returns to the ISA.
So long as you top up with at least £1,000 in new Proplend ISA contributions each year, you’ll be able to keep doing this technique for a long time.
Lenders see a running total of the amount paid out in their Proplend account, so they can keep track of what they’re allowed to put back in. And you get an email reminder towards the end of the tax year.
Worst-case scenario, you’ll earn around one percentage point less interest per year as a result of waiting to lend, but the risk also comes down to virtually zero while you’re money is not being lent.Yes, the article is correct. " 2. Long shot, but can unallocated cash from previous tax years be withdrawn and added back in again? (and not counted as this tax year allocation)" Since the ISA is flexible, you can remove any amount of cash from that ISA and replace it in the same tax year without it being counted as part of the current year allowance. When you remove cash, Proplend clearly indicates how much of previous year funds can be replaced in the tax year on the dashboard.
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Greenwood2
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Post by Greenwood2 on Apr 15, 2024 15:20:06 GMT
You have always been able to do this with any flexible ISA, you just have to remember to pay back in before the end of the tax year.
Edit: I guess unless the other terms forbid it. I've done it with Loanpad.
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Post by Ace on Apr 15, 2024 15:44:04 GMT
You have always been able to do this with any flexible ISA, you just have to remember to pay back in before the end of the tax year. Edit: I guess unless the other terms forbid it. I've done it with Loanpad. All flexible ISAs except for Kuflink. They have a half-a***d implementation where you can only replace current year funds.
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Post by Chimponaughty on Apr 16, 2024 3:51:57 GMT
You have always been able to do this with any flexible ISA, you just have to remember to pay back in before the end of the tax year. Edit: I guess unless the other terms forbid it. I've done it with Loanpad. All flexible ISAs except for Kuflink. They have a half-a***d implementation where you can only replace current year funds. Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ?
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Apr 16, 2024 5:05:20 GMT
All flexible ISAs except for Kuflink. They have a half-a***d implementation where you can only replace current year funds. Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ? It says it's fully flexible so should be OK, but I haven't used it (and haven't read the T&Cs). If in doubt ask them, or someone may be along that knows for sure.
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Post by Ace on Apr 16, 2024 7:49:47 GMT
All flexible ISAs except for Kuflink. They have a half-a***d implementation where you can only replace current year funds. Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ? Yes, removing past year funds now, of any amount, and replacing them before the end of the tax year would make them part of your previous year's ISA pot. You can withdraw and replace within the tax year as often as you like. Technically they wouldn't be "in the 23/24 wrapper", as there is no such thing once the tax year ends. Funds are either part of the current year"s ISA allowance or part of the previous years' ISA allowance. I.e. once the tax year ends there is no need to keep track of which year's allowance the funds belonged to.
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firedog
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Post by firedog on Apr 16, 2024 8:07:51 GMT
All flexible ISAs except for Kuflink. They have a half-a***d implementation where you can only replace current year funds. Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ? I know this is either a daft question or shutting the door after the horse, etc etc, but why didn't you just drip feed in in the first place? (Unrelated q, how do you actually open an Unbolted ISA if you already have a standard account? The 'Open and IFISA account' button just seems to take me back to my Classic account.)
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Post by Ace on Apr 16, 2024 8:19:28 GMT
Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ? I know this is either a daft question or shutting the door after the horse, etc etc, but why didn't you just drip feed in in the first place? (Unrelated q, how do you actually open an Unbolted ISA if you already have a standard account? The 'Open and IFISA account' button just seems to take me back to my Classic account.) If he had drip fed the funds in they would have been part of the current year ISA allowance. By depositing before the tax year finished he still has all £20k of this year's allowance available. Is been a long time since I opened my Unbolted accounts, but I recall that I had to open a new account with a different email address for each. Not sure that helps, sorry. There was a thread about how to do so somewhere, but I don't have time to find it now.
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firedog
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Post by firedog on Apr 16, 2024 8:42:33 GMT
I know this is either a daft question or shutting the door after the horse, etc etc, but why didn't you just drip feed in in the first place? (Unrelated q, how do you actually open an Unbolted ISA if you already have a standard account? The 'Open and IFISA account' button just seems to take me back to my Classic account.) If he had drip fed the funds in they would have been part of the current year ISA allowance. By depositing before the tax year finished he still has all £20k of this year's allowance available. Is been a long time since I opened my Unbolted accounts, but I recall that I had to open a new account with a different email address for each. Not sure that helps, sorry. There was a thread about how to do so somewhere, but I don't have time to find it now. Thanks - so falls into the daft question category. Appreciate the pointer to the thread - which is here. Not sure I can be bothered with the palaver.
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Post by Chimponaughty on Apr 16, 2024 9:16:28 GMT
Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ? I know this is either a daft question or shutting the door after the horse, etc etc, but why didn't you just drip feed in in the first place? (Unrelated q, how do you actually open an Unbolted ISA if you already have a standard account? The 'Open and IFISA account' button just seems to take me back to my Classic account.) To open a new account with Unbolted you have to use a new email address. (same with Lendwise) Not a daft question, I get why you're asking. I'll try to explain myself better this time. I did actually already drip feed £6k into my Unbolted 23/24 IF-ISA, gradually during the first two thirds of 23/24 tax year, whilst simultaneously running down my Classic account. Of course, after the first six months is when repayments start and cash drag can become an issue. I still wanted to put more into the Unbolted IF-ISA. I decided to top up the IF-ISA account with another £1k before the deadline so I wouldn't use up £1k of my 24/25 ISA allowance. I'm planning to fully utilise my 24/25 ISA £20k allowance elsewhere, e.g., new IF-ISAs with LandlordInvest, Crowdstacker, Lendwise, Elfin Market, possibly HNW Lending (£5k Auto), and Stocks & Shares ISAs with InvestEngine, and others.
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SteveK
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Post by SteveK on Apr 16, 2024 9:53:50 GMT
Unbolted ? I topped up my 23/24 IF-ISA before the 5th April deadline. c.£1250 idle cash balance now, of course, which I expected. Didn't give it anymore thought until reading this thread. So, if I withdraw say £1k of the idle cash from Unbolted then drip feed it back in, will it stay in the 23/24 wrapper and won't count towards my £20k ISA allowance for 24/25 ? Yes, removing past year funds now, of any amount, and replacing them before the end of the tax year would make them part of your previous year's ISA pot. You can withdraw and replace within the tax year as often as you like. Technically they wouldn't be "in the 23/24 wrapper", as there is no such thing once the tax year ends. Funds are either part of the current year"s ISA allowance or part of the previous years' ISA allowance. I.e. once the tax year ends there is no need to keep track of which year's allowance the funds belonged to. Thanks for this information. I also intend to remove the Proplend interest (all previous years funds) each month (via the automated facility) to drip feed Unbolted but didn't realise that I can put the amount I've removed back into Proplend, as previous years funds, before the tax year end. Brilliant.
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Post by steveng on Apr 26, 2024 15:04:18 GMT
You have always been able to do this with any flexible ISA, you just have to remember to pay back in before the end of the tax year. Edit: I guess unless the other terms forbid it. I've done it with Loanpad. All flexible ISAs except for Kuflink. They have a half-a***d implementation where you can only replace current year funds. I second that info on Kuflink being half implemented. I've tried withdrawing and re-adding a small amount back in. No matter where you specify you want the funds allocated, they land in General Wallet. From there you only have an option to transfer to 'ISA-Current' with the 'Remaining ISA allowance figure looming beneath. It seems with other flexible ISAs it's apparent that it's possible because you don't have to transfer from ISA to General before withdrawing. Kuflink had this option though and doesn't support the back in operation. Shame I didn't spot your reply here first Ace!
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