ISA allowance 2019/20 — find out how much you can subscribe
Last updated on: 10 March 2020
The ISA allowance is £20,000 for the 2019/20 tax year.
This means that you can subscribe (save or invest) up to £20,000 of new ISA funds from 6 April 2019 to 5 April 2020.
You can put this money into a maximum of one of each type of adult ISA:
- Cash ISA (including Help to Buy ISAs)
- Stocks and Shares ISA
- Innovative Finance ISA (IFISA)
- Lifetime ISA (LISA)
You can spread your annual allowance across your ISAs in any amounts you like, though Help to Buy ISAs and Lifetime ISAs have their own limits that need to be considered. The maximum amount of new funds you can subscribe to each type of ISA in the 2019/20 tax year are:
|Stocks & Shares ISA||£20,000|
|Innovative Finance ISA||£20,000|
|Help to Buy ISA||£3,400 (first year) / £2,400 (after)|
The Junior ISA allowance is £4,368 for the 2019/20 tax year. This does not count towards your ISA allowance of £20,000.
Now that you're aware of the overall ISA limit, we can look at the specifics of this topic:
- Does interest on an ISA count towards your limit?
- When does the ISA allowance renew?
- Can you use previous years' ISA allowances?
- How many ISAs can you have?
- What happens if you exceed the annual ISA Limit?
- What happens to your allowance if you take money out of your ISA?
- Do ISA transfers count towards the allowance?
- How much can you put in a Help to Buy ISA?
- How much can you put in a Lifetime ISA?
- What is the Junior ISA allowance?
- Your Lending Works Innovative Finance ISA allowances
Does interest on an ISA count towards your limit?
No, the interest you earn from an ISA does not count towards your ISA limit, nor do any returns from ISA investments. Your ISA allowance only applies to the money you put in. Furthermore, the interest earned from your account is completely tax-free and will not count towards your Personal Savings Allowance.
When does the ISA allowance renew?
Your ISA allowance renews on 6 April every year, which is the date the new UK tax year begins. This means that the deadline for using up any remaining allowance is midnight on 5 April.
Can you use previous years' ISA allowances?
You can't use a previous tax year's ISA allowance in the current tax year. Your remaining allowance does not carry over and you lose it at the end of the tax year. Therefore, it's key that you plan ahead to ensure you're getting the most out of your ISA limit before the deadline.
ISA allowance history
Since being introduced in the 1999/00 tax year, the ISA allowance has risen from its original £7,000. In the table below, you can find a history of the ISA allowance.
|Tax Year||Total Allowance|
How many ISAs can you have?
There isn't a limit to how many ISAs you can hold at the same time, but you can only pay into one of each type of ISA in a tax year. This means that if you've got more than one ISA of one type, you need to think carefully, as you'll only be able to add new funds to a single account per ISA category.
The only exception to this rule is the Help to Buy ISA, as you can only hold one of these at a time. It should also be noted you can transfer funds subscribed in the current tax year to a new account without adding to your allowance, as long as you move the entire amount including any interest or other returns earned on those funds.
What happens if you exceed the annual ISA Limit?
It is your responsibility to ensure you do not exceed the annual ISA Limit in any tax year. For the 2019/20 tax year this is £20,000. If you think you have exceeded the annual ISA limit you must contact your ISA provider(s) immediately. You should also contact HM Revenue & Customs (HMRC) using the ISA helpline on 0300 200 3312 and flag that you have exceeded the limit.
You won’t be entitled to any tax relief on any excess payments, and you could also be liable to a penalty or other fine by HMRC in relation to the breach.
What happens to your allowance if you take money out of your ISA?
For the majority of ISA products, any cash you withdraw loses its tax-free status. If you take money out of an ISA that you’ve subscribed to in the current tax year, your remaining ISA allowance will not be adjusted. In other words, if you add those funds back later they will again count towards your overall ISA allowance.
For example, if in 2019/20 you subscribe £19,000 to an ISA then withdraw £18,000, you would still have just £1,000 of your allowance remaining. You would not be able to replace the £18,000. This is why, if you want to move your funds to a new ISA, you should go through the proper ISA transfer process rather than withdrawing and re-subscribing your funds.
However, there are flexible ISA products on the market that allow you to withdraw cash and replace it without the reinvestment counting towards your allowance when your end-of-year tax balance is calculated. This is on the condition that you top up your account in the same tax year you withdrew money — putting it back in after the end of the tax year will mean it counts towards your new allowance.
This option is available in some Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs, but not in Junior ISAs or Lifetime ISAs.
There are a few conditions to flexible ISAs that are dependent on when you saved the money:
|When was the cash saved?||Rules||Example|
|Flexible ISA only has money from previous tax years.||You can withdraw cash from this ISA and replace anything up to this amount within the same tax year.|
In January 2020, you withdraw £2,000 from a flexible ISA that you haven't subscribed to in the current tax year.
You have until midnight on 5 April 2020 (the end of the tax year) to replace this £2,000. This doesn't affect your current year's ISA limit.
|Flexible ISA only has money from current tax year.||You can withdraw cash from this ISA and replace it in the current tax year and it won't affect your allowance. Only the end-of-tax-year balance matters.|
You withdraw £2,000 from a flexible ISA you've deposited £15,000 in the current tax year (2019/20).
You can pay back £2,000 plus the rest of your allowance for a maximum of £7,000.
|Flexible ISA has money from both previous and current tax years.|
If you withdraw cash from this ISA, it's first taken from funds saved this year, then from previous years.
When repaid, funds are used to refill the previous years' savings first.
You withdraw £10,000 from an ISA that you saved £20,000 into in 2018/19 and have subscribed £4,000 to in 2019/20.
The first £4,000 is taken from the current year's allowance, then the remaining £6,000 is taken from last year's savings.
If you repaid the full £10,000, it would refill the £6,000 from 2018/19 before topping up the £4,000 saved this year. You can then continue to add up to £16,000 to the current allowance.
If you repaid £7,000, it would refill £6,000 and only £1,000 would count towards your current allowance. You would then have up to £19,000 left to add.
Do ISA transfers count towards the allowance?
While you can only pay into a maximum of one of each type of ISA in a tax year, you can transfer ISAs as often as you like without impacting your allowance. This is because HMRC does not consider ISA transfers as subscribing new funds, allowing you to move your money to a new account.
It's also worth mentioning that you can transfer ISA funds from previous tax years into a brand-new account and pay into another new account at the same time.
You can find out all you need to know about the ISA transfer rules and how to go about moving your cash without losing tax benefits in our ISA transfers guide.
How much can you put into a Help to Buy ISA?
Please note: The deadline for opening a Help to Buy ISA was 30 November 2019 and they are no longer available to first-time buyers. You may still contribute if you already have one.
With a Help to Buy ISA, you are capped at subscribing £3,400 in the first year you opened the account, then £2,400 in each subsequent year. This is because it was possible to open your account with a one-off deposit of £1,000 and then save a maximum of £200 per month after that.
The Government will provide a 25% boost to your savings, which works out as £50 for every £200 saved. The maximum bonus you can receive is £3,000 from £12,000 savings. This bonus payment does not count towards your annual ISA allowance.
It's important to remember that Help to Buy ISAs are regarded as a form of Cash ISA, so if you add new funds, you won't be able to contribute to another Cash ISA in the same tax year. Any money deposited will also count towards your overall ISA allowance of £20,000.
How much can you put into a Lifetime ISA?
For the 2019/20 tax year, you can pay up to £4,000 into a Lifetime ISA. The Government will add a 25% bonus to your savings, with an annual limit of £1,000 per year — the bonus does not count towards your ISA allowance.
Remember: Lifetime ISA contributions count towards your £20,000 ISA allowance. As these ISAs are considered their own type, you can contribute to them alongside the other types of ISA (Cash ISA, Stocks and Shares ISA, and Innovative Finance ISA).
What is the Junior ISA allowance?
For the 2019/20 tax year, the allowance for subscribing funds to a Junior ISA (JISA) is £4,368. It was previously £4,260 in the 2018/19 tax year.
The rules for adding funds to a Junior ISA are different to other ISAs. Because you're depositing cash as a parent or guardian for your child, you aren't doing so for your own financial gain, so it is not taken from your own ISA allowance of £20,000.
The JISA is converted to an adult ISA once the child turns 18 and they can decide what they wish to do with the funds. This means it then becomes subject to their own ISA allowances.
Your Lending Works Innovative Finance ISA allowances
In this section, we'll look at some key questions you may have about investing in your Lending Works Innovative Finance ISA and your ISA allowances.
Can I open an Innovative Finance ISA with Lending Works and another type of ISA with another ISA manager in the same tax year?
Absolutely. In the current tax year, you can add new funds to your Lending Works IFISA (i.e. into an Innovative Finance ISA) and new funds into a different category of ISA with another ISA manager (for example a Cash ISA with a bank).
However, your total subscriptions for the current tax year across all four types of ISA must not exceed the annual ISA limit of £20,000.
Can I open multiple Innovative Finance ISAs in the same tax year?
Yes, you are free to open any number of IFISAs with any number of platforms as you wish. But, you can only subscribe new funds into one Innovative Finance ISA in the current tax year. This means you cannot add new funds into your Lending Works IFISA and also add new funds with another peer-to-peer lending platform in the same tax year, even if you have not reached the annual ISA limit.
However, you can transfer all of your current-year subscriptions to another peer-to-peer lending platform in the current tax year. Once this transfer has been completed, you will then be able to add any further funds with the new peer-to-peer lending platform — provided you remain within your annual ISA limit. You won’t be able to subscribe any funds to the IFISA you held previously, either.
Alternatively, you can add new funds to an IFISA with one peer-to-peer lending platform, which will count towards your ISA allowance, while also transferring funds subscribed in previous tax years to another peer-to-peer lending platform, which don't count, both in the same tax year.
Can I access next year’s annual ISA subscription now?
No. You can only add new funds to your Lending Works Innovative Finance ISA in respect to the current tax year. You can't make future-dated subscriptions to Lending Works or any other ISA provider. However, you can set up future-dated payments from your bank account to your ISA account with current and future ISA limits in mind.
What if I send you funds in excess of the annual ISA Limit?
If you send us a payment of more than the annual ISA limit, or if you send us any payment which, when applied to your Lending Works IFISA, would mean that your total current-year subscriptions would exceed the overall annual ISA limit, we will place any excess into your Classic Account.
Please note that funds invested through a Classic Account are outside the IFISA tax wrapper and earnings may therefore be subject to tax.
Can I make monthly payments to my Lending Works Innovative Finance ISA?
Yes. You can make regular payments into your Lending Works IFISA, provided your total monthly payments across the current tax year do not exceed the overall annual ISA limit of £20,000.
For example, instead of paying £20,000 of new ISA funds into your Lending Works ISA on 6 April 2019, you could instead make 12 monthly payments of £1,666.
How many times can I pay into my Lending Works Innovative Finance ISA?
There is no limit to the number of payments you can make into your Lending Works IFISA. However, the total value of those payments which relate to new subscriptions cannot exceed the overall annual ISA limit for the current tax year.
It is important that we highlight that with investments, your capital is at risk.
Now that you're up to date with how much you can invest in your ISAs and what you can open in the current tax year, it may be worth considering a Lending Works Innovative Finance ISA for your portfolio. Got any questions? Take a look around our help centre or get in touch.