Budget 2015 Flexible ISA

Budget 2015 Flexible ISA.

The government has proposed in the budget speech that the ISA will have even more flexibility where if withdrawals are made from the ISA then you can still top up your ISA before the end of the tax year without reducing your allowance.

Under the current rules, if you pay in £15,000 to an ISA and then you withdrew £5000 you would not be able to pay another £5000 back in to top up your ISA to your yearly allowance before the end of the tax year as you are deemed to have already used up your ISA allowance.  The government proposals will allow you to top up your ISA if you make withdrawals in the current tax year.

The consultation period for this will take place through autumn 2015 and no doubt results will be available in time for the budget 2016.

Note: this will apply to cash ISA elements only!

We find this move quite surprising given that ISA's or all one now so for some reason this appears to be encouraging people to save in cash ISA is and then top them up if you make withdrawals but there is nothing to stop you then transferring your cash ISA to a stocks and shares ISA.  We suspect after consultation but the government will allow all ISA is to have the same facility.

On a final note, the yearly ISA allowance for 2015/16 will rise from £15,000 to £15,240 and Junior ISA allowance up to £4,080.

Other Budget 2015 Content: