X-O "Bed and ISA" - FYI about the cost

buglawton

I decided to transfer my X-O held stocks to an X-O ISA, this is know as "Bed and ISA".

On doing the steps I noticed that while X-O don't charge for the service of transferring stocks form X-O Nominee account to a new ISA, they do warn you upfront (in the small print) that you will lose on sell/buy spreads and therefore end up with a lower quantity of shares afterwards. Seemed too much hassle to find out what that loss was likely to be so I just went ahead.

Anyways, here's the upshot which might save some other folks time to get an estimate:

- On a bunch of 5 stocks, most spread losses were in region of 1.3%
- With a couple being larger eg 3 or 6 percent
- On the entire transaction, total spread loss in value was about 1.6%

All in all I'm happy with this.

BTW X-O is the co that does cheap to run and trade with Nominee online share accounts.
With them, holding & managing an online ISA is a free service, but there's a £50 exit fee when you close out each one.

Might be interesting to compare anyone else's X-O experience around this topic - add to thread!

westy22

Are you including the 'buy' commission and the SDRT in those calculations as, although X-O do not charge a selling commission, they do charge a buy commission for their Bed & ISA service.

westy22

On reflection, it may be the other way around but they definitely charge a £5.95 commission somewhere in the Bed & ISA process.

buglawton

westy22 wrote: »

Are you including the 'buy' commission and the SDRT in those calculations as, although X-O do not charge a selling commission, they do charge a buy commission for their Bed & ISA service.

If they do it was a carefully hidden fact when I checked the terms.

If you Google, it you see the words "CLICK HERE FOR OUR COMMISSION FREE BED & ISA OFFER" but cannot actually see these words on opening the page.

Anyway I see that shares Stamp Duty does get charged too.

Quite a small margin was charged anyway, suppose I cannot complain.

westy22

From their ISA Account T&Cs: (my red highlight)

Can I transfer shares I already own into an ISA account?
Unfortunately the current Regulations do not allow you to transfer shares directly into your ISA but under HMRC rules you can take advantage of your ISA allowance without having to subscribe any new money by using a process known as “Bed and ISA.” You simply instruct us to sell shares you already hold and transfer the proceeds (up to the annual allowance limit) to your ISA – the proceeds are then used to buy back your shares.

All you need to do is open an ISA account online and then email us at enquiries@x-o.co.uk with details of which shares you would like to Bed and ISA from your nominee account – we will then execute the orders and in order to maximise your ISA allowance, we will not charge commission on the re-purchase.

buglawton

Yes I did see that too, beforehand.

Interesting to note that £50 was retained in my Nominee acct after the transfer, so that would be the cost of closing the Nominee acct and explain where some of the money went before the shares were repurchased in the ISA.
All fair enough but better if X-O made it all a bit clearer upfront.