Joint trading account and ISA Wrapper

mr_scientist

If we were to put the ISA to one side, I've seen at one popular online broker that they offer a 'Joint Trading Account'. Would it be worth doing this instead?

Although would this mean having to incurr the possibility of paying CGT and/or Income type taxes?

mr_scientist

I could really do with some help on this, thanks.

Lokolo

I doubt you will earn enough profit for CGT (which is £10,200 for each person, so assumbly £20,400 for you both), so I wouldn't worry about that.

Which broker may I ask?

debbie42

You'd have to compare charges and operating issues with the different providers. I don't know how, say, a joint account at TDW varies from the club approach already posted of as I've never done it myself.

As for taxes, assuming a 50:50 split on your account, then you'd expect any tax liabilities to be split equally. Broadly speaking, if not in an ISA, you potentially pay CGT on any increases in value between buying and selling a share, and income tax on dividends.

edit: The tax on dividends varies according to your tax status. It's detailed here:
http://ukonline.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4016453

mr_scientist

Lokolo wrote: »

I doubt you will earn enough profit for CGT (which is £10,200 for each person, so assumbly £20,400 for you both), so I wouldn't worry about that.

Which broker may I ask?

The broker I have seen it on is E*Trade (see here) although on their product pages I can't seem to find any mention of it.

debbie42 wrote: »

You'd have to compare charges and operating issues with the different providers. I don't know how, say, a joint account at TDW varies from the club approach already posted of as I've never done it myself.

As for taxes, assuming a 50:50 split on your account, then you'd expect any tax liabilities to be split equally. Broadly speaking, if not in an ISA, you potentially pay CGT on any increases in value between buying and selling a share, and income tax on dividends.

edit: The tax on dividends varies according to your tax status. It's detailed here:
http://ukonline.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4016453

Thanks for the reply Debbie, I thought that by doing a joint account it might be a better way as there is most likely only ever going to be the two of us so I thought setting up an investment club may be a bit excessive. Although you make a good point on researching the comparisons in charges etc as it may work out in our favour.