Enjoy tax‑free ISA investing

An ISA over subscription is when you pay more than £20,000 into your ISA allowance* in one tax year. This can happen if you:

• Subscribe more than £20,000 across multiple ISA accounts, or
  
  
• Have a Direct Debit that amounts to more than £20,000 at the end of the tax year

When making instant or portfolio transfers into your ISA with InvestEngine, the system will notify you that you’re already at your ISA limit to prevent oversubscription. 

*£20,000 is the tax year allowance for 2024/25 and 2025/26

What happens if I oversubscribe my ISA?

If you notify us of the breach within 30 days, we can void the transaction (s). If the breach is discovered after 30 days, we must repair the ISA by:

• Removing the excess subscription,
  
  
• Identifying and removing any related investment gains or income.

What do you need from me?

Once we’ve identified an oversubscription, we’ll:

• Provide you with a breakdown of the excess amount, affected investments, and any related gains or income.
  
  
• Supply relevant reports (Cash Statement, Trading Statement, CGT Report) to help you assess the situation.
  
  
• Ask for your confirmation on which subscriptions to remove.

You will need to tell us which investments you wish to remove from your ISA.

What reports will I need?

You can download these relevant reports from your account:

• Cash Statement: Includes any dividends received (no tax is deducted).
  
  
• Trading Statement: Details the purchase cost, acquisition dates, and fees for affected investments.
  
  
• CGT Report: Lists sale dates, sale proceeds, and disposal‑related costs.

These will help you or your accountant calculate any tax owed outside the ISA wrapper.

How do you determine which investments were made using oversubscribed funds?

We trace the path of your ISA contributions and identify:

• When your total contributions exceeded £20,000.
  
  
• Which investments were made using the excess funds after that point.
  
  
• Any dividends, reinvestments, or proceeds from those investments.

If you made multiple oversubscriptions, this process is repeated for each one.

What happens after I confirm the investments to remove?

Once we receive your confirmation:

• The identified oversubscription (including related gains and income) will be removed from your ISA.
  
  
• These amounts will be transferred into a General Investment Account (GIA) in your name.

This ensures your ISA remains compliant with HMRC rules.

Will I be taxed on the oversubscribed amounts?

Once removed from your ISA, these investments lose their tax‑free status. You may be liable for:

• Capital Gains Tax (CGT) on any profits.
  
  
• Income Tax on dividends or other earnings.

We advise speaking with a tax professional for personal advice.

What if I subscribed to another provider as well?

HMRC rules apply to the total across all providers. Even if each provider accepted subscriptions under £20,000, the total must not exceed the annual limit. We will assist with correcting the oversubscription related to your ISA with us; HMRC may contact you regarding your overall ISA usage.

You’re able to withdraw from your ISA at any time. With a Flexible ISA, you can replace the amount (s) withdrawn in the same tax year without affecting your annual allowance.

For example, if you contributed £60,000 to your ISA in the previous tax year and have £5,000 remaining in your ISA allowance for the current tax year, you can withdraw any amount and deposit that same amount back, without it affecting your remaining ISA allowance. However, you must replace the withdrawn money by the end of the tax year, which is April 5th, for this to be the case.

With InvestEngine, you’ll now be able to utilise the Flexible feature of our ISAs for free, this also applies to your current tax year allowance.

ISA transfer Promo and Flexible ISA

With a flexible ISA if you have a transfer bonus you will need to keep the transferred amount invested to keep the bonus even if they kept it topped up. Should you have a referral or affiliate bonus, you will need to ensure that £100 remains in the account.

An ISA (Individual Savings Account) is a tax‑efficient savings account that allows you to save or invest your money without paying tax on the interest or investment returns you earn. These accounts are available to UK tax residents, currently giving an annual allowance of up to £20,000.

There are 4 different types of ISA accounts, and InvestEngine currently only offer a Stocks and Shares ISA. We are aiming to add different types of ISA in the future, keep an eye out on our Community page for the latest updates on this.

See also: 

Who can open a Stocks & Shares ISA?

How much can I save in an ISA?

ISA Allowance Cut‑Off and Start Times

Below are the key deadlines for ISA subscriptions and contributions as we transition from the current tax year to the new one.

Current Tax Year Cut‑Off

• 2024/25: ISA contributions must be received by 11:45 PM on April 5th 2025, for both instant and manual transfer contributions.

New Tax Year Start

• 2025/26: You can start contributing to your new ISA allowance from 12:01 AM on April 6th 2025. Contributions made before this time will be allocated to the previous tax year.

Note: You can open an ISA account or portfolio before April 6th, 2025, in preparation for the new tax year. However, you will need to wait until April 6th to add funds.

As ISA season is in full swing, here are some changes you should be aware of going into the 2024/25 tax year. 

Opening more than one of the same type of ISA: 

For years, we’ve been restricted to only contributing to one type of ISA in each tax year. Until now, if you’d opened a Stocks and Shares ISA with one provider but wanted to spread your investments across different providers, your only option was to open a cash, innovative ISA or Lifetime ISA. 

With the new changes, you can now have more than one Stocks and Shares ISA in each tax year, which is great news for clients who wish to utilise various investment platforms or methods of investing. Do keep in mind that the ISA allowance will remain the same at £20,000 and investors will need to manage and remain within their allowance across all ISAs.

Partial transfers: 
In previous years if you contributed to an ISA in the current tax year and wanted to transfer between providers, you would need to transfer the whole of your ISA pot. The change in transferring means you can split current‑year investments between different platforms. 

Auto ISA enrolment: 

Lastly, if you haven’t contributed to an ISA in the previous tax year, you’ll now be automatically opted in, without the need to sign a declaration. 

How is InvestEngine making these changes easier?

We understand changes to the way ISAs work can be confusing, so we’ve popped a handy guide on how investing with InvestEngine makes these changes easier: 
 
‑ Our Savings Plans allow you to set up a monthly, weekly or even fortnightly top‑up to your ISA portfolio

‑ Our Auto‑Invest feature on our DIY portfolios, means your regular payments will be invested in your portfolio in the next trading cycle without you needing to log in.

Want to invest in an InvestEngine ISA, but not sure what portfolio you want? No problem, with our cash portfolios that are automatically added when you open an ISA with us, you can make the most of your ISA allowance before committing to an investment style that best suits you. 

Low‑cost management fees and zero management fees on DIY portfolios, allow you to benefit from holding multiple S&S ISAs, without it costing you an arm and leg in fees!

Need help setting up your account or have questions about our product offering? Our client services are open from 5:30 am to 9:00 pm on weekdays and 8:30 am to 5:30 pm on weekends, including Bank holidays. Drop us an email to support@investengine.com and we’ll be happy to help. 

You can withdraw from your InvestEngine ISA account at any time, with no fees. 

Please note: As the ISA with InvestEngine is a flexible ISA, you have until the end of the tax year to deposit the funds you’ve withdrawn throughout the tax year into your ISA without affecting your annual allowance.

If you intend to transfer your ISA, whether it is to InvestEngine or away from us, please ensure you follow the correct ISA transfer procedures.

Please note: if you have a Managed ISA portfolio, and your withdrawal request takes your Managed Portfolio balance to below £100, we will have to sell down your full portfolio balance. This is because the minimum required balance on a Managed Portfolio is £100.

See also:

How do I transfer an ISA to InvestEngine?

How do I withdraw money from my portfolio?

What is a Flexible ISA?

You can open a stocks and shares ISA if:

‑ You are over the age of 18

‑ Tax resident in the UK with a national insurance number

You can also have an ISA if you’re a Crown Servant such as someone working in the diplomatic or overseas civil service, or their spouse or civil partner.

Residents of the British Channel Islands and Isle of Man can not open an ISA account but can open a General account with us. 

If you’ve already used your ISA allowance for this year, you can still open an InvestEngine GIA or Business account.

InvestEngine allows you to fund multiple portfolios with your ISA allowance for the current tax year. All your portfolios fall under the same overall ISA account and share your £20,000 annual tax‑free ISA allowance.

InvestEngine’s smart features will calculate the total remaining ISA allowance and monitor any potential overfunding automatically.

You can combine multiple DIY and Managed ISA portfolios. There is no maximum number of ISA portfolios you can have on our platform.

In addition to that, starting 6th April 2024, HMRC have updated the ISA rules allowing you to have multiple ISAs of the same type with multiple providers during one tax year. 

It is important to note that you will need to be responsible for tracking contributions with all your providers in order not to breach the annual ISA allowance: the feature that tracks your remaining allowance at InvestEngine only considers the contribution you make to your InvestEngine account. 

As with all our accounts and portfolios, the minimum you must invest to open an ISA account is £100.

Your annual ISA allowance is £20,000 per current tax year. This allowance renews each tax year, so the maximum you can put into an ISA is £20,000 each tax year. 

Please note, that if you have multiple ISAs with different providers the responsibility of making sure that your overall ISA does not exceed £20,000. 

The UK financial tax year runs from 6th April to the 5th April of the following year.

With our GIA accounts, you can invest as much as you like, and there are no restrictions that follow the tax year.

Your ISA allowance is calculated from your cash payments into the account. Dividends, increase in value or any other income, such as promotional bonuses that we may add to your account do not affect your ISA allowance.

In order not to impact your ISA allowance, we apply any bonuses awarded to your General Account Cash portfolio. You may then choose to invest the bonuses however you wish, including into your ISA as applicable.

The gains made by your ISA portfolio are tax‑free.