Trading from within an ISA - and limit on value of investments?

buglawton

Have an ISA from last year. The linked account allows electronic execution only buying & selling. The total initial investment was 9k or so, anyway it was within the ISA Shares limit but the total value may now exceed that original limit.

:cool: What happens if you sell the shares but the amount received remains inside the ISA as the account seems to allow? Can you sell then buy others? What about the cash then exceeding the original 4k-something cash limit?

May have to spend a happy half hour on the line to Bangalore to get the answer but anyone who's been there, done that - can you comment?

grey_gym_sock

the annual investment limits only apply when you subscribe money to an ISA. selling shares within an ISA and reinvesting in other shares is not a subscription, so there is no limit on the value.

there is no limit on the amount of cash held with a stocks-and-shares ISA. (it is still a stocks-and-shares ISA, not a cash ISA, when it's held in cash.) there is a requirement that cash can only be held for the purposes of later investment, but no specific limit on how long you can stay in cash.

(a flat 20% tax is deducted from interest on cash in S&S ISAs. the interest rates in S&S ISAs are usually so low that you'll hardly notice. not a good place to hold cash for a long time.)

buglawton

A brilliantly clear answer thanks.
Pity the banks that operate these schemes don't make it clear themselves.
So it looks like an old S&S ISA can be used like a 'trading capsule' with no risk of tax on any profits+dividends garnered going forwards?

jimjames

Yes it can.

If you bought a share that increased in value so your £10000 ISA was now worth £1 million it would all still be tax free and exempt from CGT which shows what a benefit an ISA can be.

Hooloovoo

jimjames wrote: »

If you bought a share that increased in value so your £10000 ISA was now worth £1 million it would all still be tax free and exempt from CGT which shows what a benefit an ISA can be.

As an aside ... can you point me to which share is about to do that? :cool: