Share's ISA - complete newbie

Hughesy84

hbakhshi wrote: »

Please don't tell me how you intend to double your money in 4 months, I might be tempted, I'm a sucker for a good gamble, and I'd rather keep plodding along....

:rotfl:But feel free to tell me :rotfl:

Hughesy84

I too have been reading up on this isa tax wrapper thing too.

I get all the allowance stuff, thats all good - but my question is simple. Invest £10k in shares in 2010-11 prior to april....if that rises to say £14k - iv made £4k profit, tax free. When I sell or 'crystalise' as someone mentioned - can I keep that £14k in this ISA? or does it have to be removed from the tax wrapper?

Basically is a tax wrapper for shares for long term investments??

hbakhshi

Hughesy84 wrote: »

I too have been reading up on this isa tax wrapper thing too.

I get all the allowance stuff, thats all good - but my question is simple. Invest £10k in shares in 2010-11 prior to april....if that rises to say £14k - iv made £4k profit, tax free. When I sell or 'crystalise' as someone mentioned - can I keep that £14k in this ISA? or does it have to be removed from the tax wrapper?

Basically is a tax wrapper for shares for long term investments??

Typically you can leave it within the wrapper to invest in something else. The key thing is only £10k of your own money can enter he wrapper a year but once its in you can do what you like providing you don't take it out.

Hughesy84

So say the £10k becomes £14k - I can sell the shares to then make it £14k cash which is still in the ISA - which I can either the re-invest in more shares or keep as cash protected by an ISA so ZERO tax?

hbakhshi

Hughesy84 wrote: »

So say the £10k becomes £14k - I can sell the shares to then make it £14k cash which is still in the ISA - which I can either the re-invest in more shares or keep as cash protected by an ISA so ZERO tax?

Yes, but if you keep cash in a stocks and shares ISA the interest you earn will be close to zero, so invest in something else.

Once the money is out of the ISA, its out. You cannot put it back unless you have allowance available from the current year.

So sell, pool your money within the ISA and then go on and invest in something else, but don't take it out of the wrapper unless you plan to spend it...

masonic

Hughesy84 wrote: »

So say the £10k becomes £14k - I can sell the shares to then make it £14k cash which is still in the ISA - which I can either the re-invest in more shares or keep as cash protected by an ISA so ZERO tax?

Yes, but you can't keep it as cash within a S&S ISA indefinitely, and interest on cash within a S&S ISA is subject to tax.

£10k to £14k would not incur capital gains tax even if it wasn't inside an ISA. ISAs become useful when larger gains are involved, which will tend to happen if you plan to invest increasing sums of money and/or over a long period of time.

lisyloo

You can't properly hold cash within an S&S ISA.
There is usually a cash fund which is intended for you to put your money in temporarily whilst you decide on your next investment.
This tends to have uncompetitive rates, so you would not want to keep cash here long term
You cannot transfer money from a S&S ISA to a cash ISA but you can the other way round.
So once it's in equities then it's in there until you want to withdraw really.

longwalks1

hbakhshi wrote: »

Typically you can leave it within the wrapper to invest in something else. The key thing is only £10k of your own money can enter he wrapper a year but once its in you can do what you like providing you don't take it out.

so i could put in £10k cash before Apr 5 this year, or does it have to be £10k worth of shares?

And once in there, say that £10k shares shot up to £100k in a year (i know it'll never happen, but theoretically), then I sold them all, what happens to the £100k cash in the Shares ISA? Can i take it all out, tax free? Or drip feed some out each year?

longwalks1

hbakhshi wrote: »

Typically you can leave it within the wrapper to invest in something else. The key thing is only £10k of your own money can enter he wrapper a year but once its in you can do what you like providing you don't take it out.

And theres the potential for over 5 years, to put in a total of £50k of my own money, and keep using it to share deal (even frequently? say, 2 or 3 times a week?)

What happens if you are lucky and end up with £500,000 of shares in there, at what point can you get all your money out? And do you pay tax on this huge sum?

hbakhshi

britishboy wrote: »

And theres the potential for over 5 years, to put in a total of £50k of my own money, and keep using it to share deal (even frequently? say, 2 or 3 times a week?)

What happens if you are lucky and end up with £500,000 of shares in there, at what point can you get all your money out? And do you pay tax on this huge sum?

Leave it in as long as you like, share deal 20 times a day, its all free of tax within the wrapper.

Even if you end up with a million it would still be tax free, as long as it cam from money within the wrapper.