Transfer of already owned shares into a share ISA

Markw88

Is it possible to transfer shares purchased outside of an ISA into an ISA? If so, what value will be taken to reach the allowance? Current market value or the value I paid?

Thanks

dunstonh

t possible to transfer shares purchased outside of an ISA into an ISA?

Yes. The transaction is called bed & ISA. It is treated as a disposal for CGT purposes. Technically, its a sell and buy but the end result is the same.

If so, what value will be taken to reach the allowance?

The value on the day of buying inside the ISA based on your instructions.

jamesd

If selling now will cause you to pay unnecessary capital gains tax, put some cash into the ISA to use the allowance then sell in the new tax year to get the cash back. Use of an overdraft or credit card for a little while for things like this can be worthwhile.

Zeerust

jamesd wrote: »

If selling now will cause you to pay unnecessary capital gains tax, put some cash into the ISA to use the allowance then sell in the new tax year to get the cash back. Use of an overdraft or credit card for a little while for things like this can be worthwhile.

You are allowed £10100 gain (profit, sale of shares - original cost) before paying Capital Gains Tax (CGT). For example if you bought shares for £2,000 and sold for £12,000 you would have made a profit of £10,000 which is within the allowance so no tax to pay.

http://www.hmrc.gov.uk/RATES/cgt.htm#1

jamesd

Xeerust, yes, the allowance is helpful but this has been such a good year for investments that planning how to use this year's CGT allowance and next years can be useful.