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  • FIRST POST
    • dellboy102
    • By dellboy102 12th Aug 17, 7:48 PM
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    dellboy102
    Trading investment trusts in a ISA
    • #1
    • 12th Aug 17, 7:48 PM
    Trading investment trusts in a ISA 12th Aug 17 at 7:48 PM
    Hi All

    Was hoping for some advice, I've been looking into investment trusts (at the moment I have no investments at all) and found 2-3 I'd like to invest in, I'm guessing the best way is within a ISA to avoid being taxed at my tax bracket, I've never held a ISA before so theres a bit of confusion around how it works.

    If I open a ISA for stocks and shares and invest in the 2-3 investment trusts, can I add or remove investment trusts from the ISA without any penalties? I realize there will be platform charges etc which is fine but did not understand how the tax part of it works..

    Also as an aside, are there any recommended sites to find investment trusts and compare performance etc? so far I've been using trustnet which seems pretty good.

    Many thanks
Page 1
    • bowlhead99
    • By bowlhead99 12th Aug 17, 8:01 PM
    • 6,586 Posts
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    bowlhead99
    • #2
    • 12th Aug 17, 8:01 PM
    • #2
    • 12th Aug 17, 8:01 PM
    Inside an ISA you can buy and sell individual holdings (funds, ITs, individual companies and bonds) as often as you like. There's no UK tax on any gains you make from buying and selling, nor on any income that's distributed by your investee holdings back into your ISA account as cash as you go along (eg dividends, interest, property income distributions).

    When you buy an investment trust on the stock exchange within your ISA, if the trust itself is incorporated in the UK, you'll pay 0.5% stamp duty to the government at the time you buy. Your broker/platform provider will charge that to you as part of the purchase cost, but it's only for buying, you don't pay it again when you sell.

    You'll also have a transaction fee for the broker to go out and buy it for you, which might be a tenner or more with most brokers, a fiver with the budget brokers, or less than a couple of pounds if your provider has a "regular monthly investment" program where you book in advance to buy on a fixed day each month and the broker pools your order with other people who also want to buy that trust on that day as part of their scheme.
    • TCA
    • By TCA 12th Aug 17, 8:04 PM
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    TCA
    • #3
    • 12th Aug 17, 8:04 PM
    • #3
    • 12th Aug 17, 8:04 PM
    You would sell them within the ISA and buy whatever you wanted next from the cash. If retained within the ISA you keep the tax advantages. If you remove from the ISA you lose that part of annual ISA allowance and can only rebuy in the ISA if you have remaining allowance. There are no penalties but you incur dealing fees for buying and selling and possibly 0.5% stamp duty on purchase. The AIC website might be of interest:

    http://www.theaic.co.uk
    • dellboy102
    • By dellboy102 14th Aug 17, 10:51 AM
    • 507 Posts
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    dellboy102
    • #4
    • 14th Aug 17, 10:51 AM
    • #4
    • 14th Aug 17, 10:51 AM
    Thank you both that makes perfect sense now, one thing I wanted to clarify, if I invested 10k in the ISA and my investment trusts or funds did well and are now worth 25k, I then sell and invest in other investment trusts or funds still within the ISA, if its above the ISA threshold does that matter or will that still be tax free as I never took it out the ISA?
    • Reaper
    • By Reaper 14th Aug 17, 11:32 AM
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    Reaper
    • #5
    • 14th Aug 17, 11:32 AM
    • #5
    • 14th Aug 17, 11:32 AM
    Also as an aside, are there any recommended sites to find investment trusts and compare performance etc? so far I've been using trustnet which seems pretty good.
    Originally posted by dellboy102
    http://www.theaic.co.uk/

    if I invested 10k in the ISA and my investment trusts or funds did well and are now worth 25k, I then sell and invest in other investment trusts or funds still within the ISA, if its above the ISA threshold does that matter or will that still be tax free as I never took it out the ISA?
    Originally posted by dellboy102
    As long as it stays inside the ISA it doesn't matter. The limit is on adding new money, not internal growth.
    • dellboy102
    • By dellboy102 14th Aug 17, 11:54 AM
    • 507 Posts
    • 95 Thanks
    dellboy102
    • #6
    • 14th Aug 17, 11:54 AM
    • #6
    • 14th Aug 17, 11:54 AM
    Brill thanks, I tried the theaic website but trustnet seems to have trusts it does not have, e.g. the one I was interested in is missing from aic Burford Capital Limited Ord NPV.

    I'll use both websites to do my research
    • sorcerer
    • By sorcerer 14th Aug 17, 12:19 PM
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    sorcerer
    • #7
    • 14th Aug 17, 12:19 PM
    • #7
    • 14th Aug 17, 12:19 PM
    Burford Capital Limited Ord NPV. is a i think a normal share and not an investment trust, which is why you can't find it on AIC.
    • george4064
    • By george4064 14th Aug 17, 12:23 PM
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    george4064
    • #8
    • 14th Aug 17, 12:23 PM
    • #8
    • 14th Aug 17, 12:23 PM
    Brill thanks, I tried the theaic website but trustnet seems to have trusts it does not have, e.g. the one I was interested in is missing from aic Burford Capital Limited Ord NPV.

    I'll use both websites to do my research
    Originally posted by dellboy102
    You probably couldn't find Burford Capital on the AIC website because it isn't classified as an investment trust, because TrustNet also holds information on individual shares (like Burford) you will find information on their website.

    Burford Capital Limited is a global finance company focused on law. The Company provides investment capital, investment management, financing and risk solutions with a focus on the litigation and arbitration sector. The Company's segments include provision of litigation investment, provision of litigation insurance, exploration of new initiatives related to application of capital to the litigation and arbitration sector until such time as those initiatives mature into full-fledged independent segments and investment management activities. The Company's provision of litigation investment segment reflects litigation and arbitration-related investment activities. The Company's provision of litigation insurance segment reflects the United Kingdom and Channel Islands litigation insurance activities. The Company's businesses include litigation finance and risk management, asset recovery and a range of legal finance and advisory activities.
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    • dellboy102
    • By dellboy102 14th Aug 17, 1:42 PM
    • 507 Posts
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    dellboy102
    • #9
    • 14th Aug 17, 1:42 PM
    • #9
    • 14th Aug 17, 1:42 PM
    Ah, above is in the investment trusts section for some reason on trustnet hence the confusion.

    Final silly question, if a platform is advertised as supporting shares and investment trusts etc, does that mean they have access to ALL of them to invest in?
    Last edited by dellboy102; 14-08-2017 at 2:03 PM.
    • Reaper
    • By Reaper 14th Aug 17, 2:43 PM
    • 6,088 Posts
    • 4,156 Thanks
    Reaper
    Final silly question, if a platform is advertised as supporting shares and investment trusts etc, does that mean they have access to ALL of them to invest in?
    Originally posted by dellboy102
    Not all. I believe Fidelity pension offers only a limited range of Investment Trusts (EDIT: I just checked and they seem to offer a lot). Most will offer everything.
    Last edited by Reaper; 14-08-2017 at 2:49 PM.
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