ISA / Shares question

lush_walrus

Hi everyone,

Im sure this has a very obvious answer, so apologies in advance for asking a stupid question!

At the moment I have roughtly £15000 in a mini cash isa.

This year my situation has changed and the company I have owned shares with has been brought out by a German company. As part of the take over the company has reduced the number of shares and paid its shareholders the difference.

Due to this i have cut the number of shares I hold down to approximately £10,000 at present share prices.

As the amount of shares I now hold is now lower and I intend to leave this amount in the shares to fester for a few years (I know most will now be screaming at the screen that I shouldnt do this with shares but there is a financial reason for doing this), it had me thinking what would be the sensible thing to do with the remaining shares which are now held outside of the UK.

So after all of that background information! My question is this, would it be advantageous in the next financial year to open a maxi isa, add my existing mini isa to it along with some of my existing shares so that I can gain the tax relief from the shares too. Is this possible or is it better to leave them as they are?.

Thanks everyone, even after all of this time on here, I still have so many financial knowledge shortfalls!

carnet

lush_walrus wrote:

At the moment I have roughtly £15000 in a mini cash isa.

This year my situation has changed and the company I have owned shares with has been brought out by a German company. As part of the take over the company has reduced the number of shares and paid its shareholders the difference.

Due to this i have cut the number of shares I hold down to approximately £10,000 at present share prices.

Not getting this.

"mini cash isa", "shares"

Deemy

yeh

And I don't get much of the rest either ?

If its been taken over then your SHARES isa would have been creidted with the proceeds.

scbfung

if i getting your correctly

ISA got TAX free and it will be 7000 max and everything in there will be tax free and if you sell your shares you will have to see the price

if your money is for long term there is something call maxi isa with equity which spread across the whole market to have higher gain

let me know if i answer your questions

lush_walrus

Ah sorry guys its two separate issues.

First is that I have held a large amount of shares for years and years, which I have left outside of any ISAs. The co have been taken over by a German co, as a result I opted to cash in a lot of them leaving me with about £10,000 worth of shares. As this amount is now smaller I wondered if it was worth or possible to put some of them into a maxi ISA in the next tax year? Rather than keep them all as they are outside of an ISA.

The other question was I presently have a cash mini ISA and was wondering if the above is possible I would be able to transfer the money I already have in a mini ISA over to a maxi ISA so that the money is all together.

Sorry for the garble, I probably have lots of misunderstandings in there!

lush_walrus

carnet wrote:

Not getting this.

"mini cash isa", "shares"

Sorry two different issues I have one ISA a mini cash ISA with £15000 cash in it.

Outside of the ISA I have shares with a British company which has now been taken over by a German company. As a result of the takeover I opted to sell a lot of my holdings and left me with x amount of shares, worth approx £10,000.

As the amount of shares I now hold (nothing to do with ISA) is now smaller I was wondering if there is anyway I can

Transfer my existing mini cash ISA into a maxi ISA

and then

Move some of my existing shares (which are held with a German co) into the same maxi ISA to use up my share allowance.

The part I don't understand is whether I can use my existing shares as part of my share entitlement and whether a mini isa can be transfered into a maxi isa.

dunstonh

As this amount is now smaller I wondered if it was worth or possible to put some of them into a maxi ISA in the next tax year? Rather than keep them all as they are outside of an ISA.

Yes, you could share exchange them into a self select ISA. However, it would class as a sale for tax purposes.

The other question was I presently have a cash mini ISA and was wondering if the above is possible I would be able to transfer the money I already have in a mini ISA over to a maxi ISA so that the money is all together.

Once the tax year is complete, the MINI and MAXI classification no longer matters. They cease being mini or maxi. They just become ISA. However, the cash element and equity element (stocks and shareas) must still be kept apart and you cannot switch between cash ISAs and equity ISAs (not without treating it as a new transaction and utilising your annual allowances).

There are not many providers that offer MAXI ISAs which do both cash and equity. Fourteen providers as far as I can see. Those that do, tend to have poorer cash ISA rates. Personally, I prefer to treat the cash ISA as one product and Equity ISA as another rather than package them together in an inferior product.

lush_walrus

Deemy wrote:

yeh

And I don't get much of the rest either ?

If its been taken over then your SHARES isa would have been creidted with the proceeds.

Sorry, Ive completely muddled things in my explanation. The shares are one thing, and are outside of any ISA I have, I have basically opted to cash in some of the shares and reduce the holdings when the company was brought out.

lush_walrus

dunstonh wrote:

Yes, you could share exchange them into a self select ISA. However, it would class as a sale for tax purposes.



Once the tax year is complete, the MINI and MAXI classification no longer matters. They cease being mini or maxi. They just become ISA. However, the cash element and equity element (stocks and shareas) must still be kept apart and you cannot switch between cash ISAs and equity ISAs (not without treating it as a new transaction and utilising your annual allowances).

There are not many providers that offer MAXI ISAs which do both cash and equity. Fourteen providers as far as I can see. Those that do, tend to have poorer cash ISA rates. Personally, I prefer to treat the cash ISA as one product and Equity ISA as another rather than package them together in an inferior product.

Thanks for that, so basically I am better off looking around for a good cash ISA rate for next year and transfering over my existing ISA and my allowance for next year.


With regards to the shares element, as transfering the shares over would be clasified as a sale in regards to tax, does this mean that I am actually better off staying as I am?

cheerfulcat

lush_walrus wrote:

With regards to the shares element, as transfering the shares over would be clasified as a sale in regards to tax, does this mean that I am actually better off staying as I am?

Hi,

You can't actually transfer shares to an ISA, you would need to sell them and repurchase within the ISA. A couple of things to think about - firstly, you say that you have held these shares for " years and years ". If you sell you will get a certain amount of taper relief and, if they were purchased before April 1998, indexation relief ( reductions in CGT payable ) depending on how long you have held the shares. You might find that between these reliefs and your CGT allowance there is no CGT payable. Secondly, make sure before you sell that the shares are ISA-able; some aren't.

Cheerfulcat

dunstonh

Back in the old days of PEPs, the befits of select select peps usually offset the charges. Now we have ISAs which are not as tax free as PEPs were, you can find that where you are a basic rate taxpayer and unlikely to have an issue with CGT, that putting them in an ISA would be a waste of money.

I mentioned share exchange. A number of providers will offer share exchange where they will buy the shares from you and then you buy them back (or alternatives) within the ISA.

Another thing to remember is that there will be a difference between the buying price of the shares and the re-purchase. Again, the difference may make the whole transaction a waste of time.