For all our ISAs (except Help to Buy: ISA and Flexible Cash ISA - Issues 1 to 9), any money you withdraw within a tax year can be replaced during the same tax year without counting towards your annual ISA allowance. This is known as ISA flexibility.
For example, if you pay in £10,000 to your ISA on 6 April 2018, your remaining allowance for the 2018/19 tax year will be £10,000. If you then withdrew £5,000 from this ISA on 1 June 2018, your remaining 2018/19 ISA allowance would be £15,000.
Remember that money you’ve withdrawn needs to be paid back into the ISA in the same tax year (if you choose to do so). You won’t be able to replace the money the following tax year without it counting towards your ISA allowance. The tax year runs from 6 April to 5 April the following year.
If you’d like to transfer your ISA to a new provider and where you’ve withdrawn previous years’ subscriptions from your ISA, any withdrawals not replaced prior to the transfer can’t be replaced with your new provider without counting towards your annual ISA allowance.
If you’ve made withdrawals and intend to re-subscribe it in the same tax year, you’ll need to ensure the ISA from which you made the withdrawal remains open.
Where you’ve withdrawn current year subscriptions from your ISA, your remaining current year ISA allowance will be transferred to your new provider. Where you’ve withdrawn previous tax year deposits from your ISA, you must replenish these before transferring to a new provider, otherwise you’ll lose them for good. For example, if you subscribed £20,000 in the current tax year, having already subscribed £5,000 in a previous tax year, and you withdrew the full £25,000, you would lose the ability to replenish the £5,000 withdrawn from previous tax years’ subscriptions if you transferred your ISA to another provider without first paying this £5,000 back in.
For example, if on 1 June you subscribe £5,000 and on 1 July you withdraw £2,000, transferring your remaining current year subscriptions of £3,000 to a new provider, your remaining current year ISA allowance with your new provider would be £17,000 (based on 2018/19 ISA allowance of £20,000).