Transferring shares into an ISA - is it worth it?

jim._2

Hi,

My current situation is that have a few quid (£3000 X 2) I would like invest risk free in a mini cash ISA for myself and my wife. (A&L looks good for this).

I also have some Nortel shares (bought as part of an employee purchase scheme) totally around £7000. From reading around, it looks like I could "transfer" these shares into ISAs for myself and my wife, but I am unsure of the benefits. I realise I would have to sell and repurchase the shares.

I am hoping that these shares will rise in value (of course), so would the ISA wrapper protect me from any CGT?

Also if transferring the shares to ISAs is the best way to go, what is the best way to go about this (Discount brokers, selling and buying the shares etc).

Finally, I have some PEP investments with Jupiter bought through Chelsea FS. Should I consider moving these to an ISA or have they found a good home already?

Thanks.

schiff

jim - you've not done very well for replies so I hope you are not put off!

Welcome to MSE!

Is the company Nortel Networks? It's not clear if you have 7000 shares or £7000 worth. However the current Capital Gains Tax annual exemption is about £8500 and that refers to the gain not to the sale proceeds. So you may not need to put them in an ISA. There are costs associated with the latter, whereas if you just hold them and sell them when you feel the time is right, if the gain is under the annual CGT examption limit, then there is no
tax to pay, only the sale commission to the stockbroker. The exemption limit moves up each year in the Budget. You also have another device if the shares do so well that you could make a taxable gain - and that is to sell part in one tax year and the rest in the next tax year. If the dates fall right, you could even sell on April 5th and April 6th!

As for PEPs and ISAs they are two different tax-free animals. If you change your PEP into an ISA you would lose its tax-free status and use up some or all of your ISA allowance at the same time. Consider changing the PEP manager by all means if they are not performing (for which you would need advice).

jim._2

Thanks schiff,

I've had a bit of a family crisis, so haven't checked back for a day or two.

It looks like its best just to leave the shares where tehy are in the meantime and leave the PEP as a PEP - thanks for that.

I will look into the Find manager issue in a bit more detail.

Cheers,
Jim