In our weekly series, readers can email any questions about their finances to be answered by our expert, Rosie Hooper. Rosie is a chartered financial planner at Quilter Cheviot and has worked in financial services for 25 years. If you have a question for her, email us at money@inews.co.uk.
Question: I recently pulled £40,000 out of ISAs to buy my first home with a 15 per cent deposit. Unfortunately, the sale fell through, and I’m now stuck with this money out of the ISA. Is there anyway I can put it back in? Or failing that, what’s the best solution? I’m now paying tax on the money which isn’t ideal and I might not buy again for another six months to a year.
Answer: Having a house purchase fall through at the last minute is disappointing at the best of times. When you’ve already taken £40,000 out of your ISA for the deposit, it can feel like adding financial insult to emotional injury.
Shorts
The first thing I’d do is check whether the ISA you withdrew the money from is a flexible ISA. Many people don’t realise these exist, but they can be incredibly useful in exactly this sort of situation. If your ISA has flexible status and you made the withdrawal during the current tax year, you can usually put the money back into the same ISA before 5 April without it affecting your annual ISA allowance. In effect, it gives you a second chance when plans don’t quite work out as expected.
