This means you have more freedom in managing your cash:
Withdraw cash from your ISA without âlosingâ your allowance. Withdrawals from your ISA will now be added back to your ÂŁ20,000 annual allowance, and youâll be able to return that cash before the end of tax year.
Withdraw ISA contributions from previous tax years without âlosingâ those allowances, so long as you return them within the same tax year.
If youâre interested, check out our Blog post on Flexible ISAs here
Your ISA is flexible as of 11 July 2024. Any withdrawals youâve made before this date wonât be flexible, meaning they wonât be added back to your annual allowance. Check your remaining ISA allowance in your app.
Do I need to do anything?
No, you donât need to do anything. Your ISA is now flexible and no action is needed. Our terms and conditions have changed in line with our ISA becoming flexible. You can read them here.
When you invest, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you invest.
ISA eligibility rules apply. Tax treatment depends on personal circumstances and current rules may change. The Freetrade ISA is flexible as of 11 July 2024. Withdrawals before this date cannot be replaced under the flexible ISA rules. Check your remaining ISA allowance in your app.
This example is covered (in slightly different terms) in our FAQs on what a âflexible withdrawalâ is.
In the flexible ISA, withdrawals of gains are the same as withdrawals of previous yearsâ funds. So in your example:
You have ÂŁ100k in your ISA, having deposited ÂŁ20k and seen gains of ÂŁ80k;
You withdraw ÂŁ100k;
This would mean:
Your annual ISA allowance is replenished to ÂŁ20k.
You will have a âflexible withdrawalâ amount shown in your app of ÂŁ80k. This flexible withdrawal can only be put back into your Freetrade ISA, before the end of the tax year.
Hope that clears it up!
As always, this is not tax advice and if you need advice on your personal circumstances, please speak to a professional adviser.
Iâm not 100% sure of the answer in this scenario so may be best to check on HMRC website or with Freetrade support, but I think if you withdrew ÂŁ20K you would subsequently be able to deposit ÂŁ30K before the end of the tax year (i.e. return the ÂŁ20K flexible withdrawal + deposit another ÂŁ10K due to remaining 24/25 subscription allowance).
You have already used ÂŁ10K of your 24/25 subscription and I donât think any subsequent withdrawal under flexible ISA terms changes that.
Great, but what Iâd really like to see is for you to be able to allow rights issues (an additional investment corporate action) so you would actually support your own terms and conditions:
21.4. If you become entitled to any proceeds (such as dividends) or non-monetary benefits (such as additional Investments) as a result of any corporate action in relation to the Investments in your Freetrade Account(s), weâll take all reasonable steps to collect such proceeds or benefits and credit your Freetrade Account(s) accordingly.
because I think pretty much everyone else does cover them, So if youâre really the âBest Online Trading Platformâ then you should be able to cover all aspects of trading. otherwise it should be the Best limited share holding platform, which doesnât have quite the same ring to it.
While I am glad the Freetrade ISA is now flexible, can I ask if there is any reason not to backdate this change to the start of the tax year (which is allowed in the regulations)?
More broadly, it irritates me that features such as this which have been requested for years only ship shortly after one of your major competitors (T212) does the same.
Freetrade should be shipping basic features like this much more frequently and not taking years to implement them (tax certificates were another example) if you want to be successful
Just hoping to keep the dev team focused on things that will actually impact peoples bottom line. I know that I donât put anything into an ISA that Iâm ever expecting to need and treat it more like a SIPP instead. I suppose it would be good to have the flexibility, but I donât really envision a time where I would need to pull a few thousand pounds out short term and be able to put them back within a year. If I pull it out it must be for some emergency and I wouldnât be able to put in back in regardless. I wonder at the impact this would actually have on anyone, because it would require you to be both maxing out your ISA contribution and also needing access to it on a short term basis. Iâm sure it helps someone Iâm just not sure who it would actually help.
Aside from emergency use, the main benefit I see is for people who may decide they want to park some funds as cash. Having a flexible ISA gives them the option to withdraw those funds and park in an interest-paying bank account. Whilst Freetrade ISA does pay interest on some cash, its only on a relatively small amount and for the standard plan the interest rate isnât particularly impressive. Also whilst there are cash-like options available within Freetrade ISA (money market funds, treasury bills) some people may just prefer the simplicity of regular bank accounts. Another option is an ISA transfer to a cash ISA but this can take several weeks (and another several weeks to transfer back when you decide you want to invest it). Another consideration is that although interest earned outside ISA would be taxable, many people wonât need to pay any tax on it due to personal savings allowance.
This is definitely useful.
Another example, my sisters fixed rate mortgage is coming to an end and her new mortgage will be more expensive. I said to her to withdraw from ISA to reduce the mortgage and then before end of tax put as much back as possible.
Yes, but would it not also make sense if the rate is particularly usurious to stop putting funds into the ISA and just make significant overpayments. You would be looking at an immediate 5% or thereabouts return by paying down the capital. Coupled with the peace of mind of having significantly lower payments in the future making it easier to put more in the ISA later. You would miss out on a year or two of compounding, but also make the bank miss out on a year or two of compounding.
Iâm pleased that it exists, but it appears to me to be some quite specific use cases. Iâd hope that it was very simple for them to accomplish and they saw it as a quick win to do, but I hope the developers can now work on things that could have a greater impact across the whole userbase. Things that will actually impact the bottom line of many users, and that people have left for other providers because FT is unable to accomplish things that they can manage.
I think it is very useful, but agree, will probably be underused; personally it means that for cash that is definitely needed later this year (eg university fees) I can shelter it inside the tax wrapper until that time, rather than leaving it outside and thus liable to tax.
keep up the good work <(^-^) >