Stocks & Shares ISA

andrew.london

Hi

Just opened up a trading account with SVS Securities. Seems a fairly good deal with trades £5.75 each... Also opened up a stocks and shares ISA with them too.

Now - I've already maxed out my cash ISA at £5,340 for this and the last tax year ... but I'm not entirely sure how filling my stocks and shares ISA to £5,340 works ...

With SVS I've got two (effectively) cash accounts. A trading account and the ISA. Is the way that it works that I need to (a) load £5,340 into the ISA and then (b) buy shares FROM that account, thus making any gains free of tax?

Presume that what I would get back on selling (provided I make a gain), would be tax free (but the cash would be sent into the trading cash account - as I can't obviously fill the cash ISA above where it is ... - correct?)

All a bit confused ...

chris_m

You're close - yes, you load the ISA with the £5340 (for this year, you can put the full ISA allowance in next year if you don't put any in your cash ISA) and trade within that. Any gains (on trading and/or dividends) remain in the S&S ISA (unless you take them out), it's only the initial cash loading or topping up that is limited to the ISA limit.

The non-ISA trading account could be handy should you want to trade any shares that cannot be held in an ISA, usually AIM-listed stocks that are not also listed on another exchange as well as London. Any gains in that account would be liable to tax as usual, Capital Gains Tax should they exceed the Capital Gains allowance and/or Income Tax for any dividends.

andrew.london

that's great - thanks so much