Transferring to a self select ISA

Rhino666

Mikeyorks wrote: »

I do it regularly .... and very few Funds have a spread. Junior Oils is one of the few (out of 40) I've purchased that do. HL rebate virtually all the initial fees .... so the 5% is way out. Normally around 0.25% - 1%.

You are probably correct - I am only viewing the buy / sell prices so can only answer on that basis.

Jupiter Income Income units for example are listed at £4.2701 to sell and £4.5265 to buy. From what you say, this would include the initial percentage refunded by HL ?

Mikeyorks

Rhino666 wrote: »

Jupiter Income Income units for example are listed at £4.2701 to sell and £4.5265 to buy. From what you say, this would include the initial percentage refunded by HL ?

You've picked one of the fund houses that consistently have a spread - few do - if you look at Neptune / Scottish Widows, for example.

The HL main strength is that they rebate the initial charge. Using your Jupiter example - they automatically deflect all but 0.25% of the initial 5% buying charge :

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/j/jupiter-income-income

Rhino666

Mike

Thanks for bearing with me - I struggle with some of this stuff and previously have not had the time to work out what I can and cannot do with these investments. My crude way of dealing with mistakes is to erase the memory of said mistake and try to gain advantage. Being more proactive with my fund choices in retrospect may have been a wiser option.

HL are probably the best people to be with for funds as they discount the initial charge which we have worked out, lowers the offer price and pay a small loyalty bonus. They also pay a very small rate of interest on cash held - it is small but it is more than anyone else is prepared to pay, so not to be dismissed. iii also discount the initial fund cost, their share dealing process seems better and they do not charge a management fee for non fund ISA holdings and no interest on cash held.

It's swings and roundabouts but in my case a new start.

Mikeyorks

Yes the interest on cash is small. Despite a lot of their website indicates otherwise .... you can actually withdraw cash wholly online and then put it somewhere more 'interesting' for a while. Until you decide to return to the market.

You wouldn't want to do that if it's in an ISA - only if it's in one of the freestanding 'Fund and share' accounts? If you leave cash in an ISA for too long they will (HMRC requirement) write and ask your intention. You merely respond that it's intended for re-investment in due course ..... and that's all that is needed.

Rhino666

I think that the interest was much higher when the base rate allowed - never competitive but better than nothing which seems to be what the others offer.

I have asked about holding cash before. There are no hard and fast rules but it seems generally acceptable to hold cash in your share/funds ISA. Answering any HMRA question is easy and honest - after all who want to hold cash that is effectively depreciating. The tax man is over stretched with far better things to do than worry about this - famous last words :-)

Here is a useful link...........
http://www.iii.co.uk/articles/articledisplay.jsp?section=ISAs&article_id=10132534

Mikeyorks

Just for info. The HMRC guidance to ISA managers on cash held in an ISA :

10.32 Cash may be held in a stocks and shares ISA only for the purpose of investment in qualifying investments (paragraph 7.2). It may not be held for the sole purpose of sheltering interest arising on cash deposits from tax. Managers should therefore monitor all stocks and shares ISAs, to ensure that cash on deposit is held for the purpose of investment in qualifying investments. This includes the situation where the investor is awaiting a suitable investment opportunity. Where they are not satisfied that this is the case, managers should follow the procedures set out in paragraphs 10.34 and 10.35 (unless there is a discretionary agreement in place, in which case see paragraph 10.33).
10.34 Where, under the rules of the manager’s regulatory body, a report is to be sent to the investor, the manager should write to the investor and
• explain that cash may be held in a stocks and shares ISA only in order to purchase other qualifying investments
• ask the investor to confirm that the cash is being held for the purpose of investment in other qualifying investments
• advise the investor that if the cash is not invested, HMRC may require the manager to return the cash to the investor.
10.35 If the manager has received no instructions by the time the next report is issued he should send a reminder to the investor.
10.36 Provided managers follow the procedures set out in paragraphs 10.34 and 10.35 HMRC will accept that they have complied with their obligations under the regulations in relation to cash on deposit in a stocks and shares ISA. Managers may wish to program their systems to trigger a review of particular cases.

........... I think it would be a long time before the 3rd bullet of 10.34 was triggered!