Only profits made above the annual CGT allowance, which for the 2019-20 tax year is £12,000 will be subject to CGT at 10% or 20% depending on your tax band.
Withdrawals and your annual ISA allowance
A ‘flexible ISA’ means that for cash ISAs, investment ISAs, and innovative finance ISAs you have the freedom to withdraw your money and crucially, put it back again without affecting your annual allowance.
For example, if you put £10,000 in your ISA during the current tax year then withdraw £2,000 later, you can pay this £2,000 back into the ISA you withdrew it from this tax year and still be able to put in another £10,000 before 5 April 2020, taking you up to the current £20,000 allowance.
You can do this with a cash ISA, investment ISA, or an innovative finance ISA, as long as your provider supports it and you have a cash holding in your ISA to draw on. If you’re thinking of switching providers, it’s a good idea to check whether they support the new flexibility.
Flexible ISA rules cover dividend payments as well as cash withdrawals. Let’s say you have arranged to have dividends paid into a bank account. You’ll be able to pay these back into a flexible ISA if you want to, without this affecting your allowance.
The flexible ISA rules do not currently apply to the lifetime ISA. Withdrawals made from the lifetime ISA will forfeit the government bonus and face a 5% charge, unless they are being used for the intended purposes of the lifetime ISA (funding a first home, or towards retirement).