Bed & ISA Any advantages?

Gadfium

I've got about £20k of BT shares sitting in an Equiniti account and I'm weighing up the pro's and cons of putting them into a Bed & ISA. I'm a higher rate taxpayer and have this years ISA allowance remaining.

Is there any advantage to doing this? I'm intending to hold the shares for a number of years as an investment.

Thanks in advance for any help offered.

dunstonh

Is there any advantage to doing this?

yes. In an ISA, you avoid HRT on distributions and CGT on gains.

The sale is a disposal for CGT purposes though. So, make sure you are under the allowance (if you are over, then do it over multiple years).

Gadfium

Thanks for taking the trouble to reply Dunstonh.

I don't understand this bit "HRT on distributions". Would you mind explaining?

I guess that I now need to find a low-cost Bed & ISA provider and get the shares shifted.

dunstonh

I don't understand this bit "HRT on distributions". Would you mind explaining?

You are a higher rate taxpayer. You need to declare the dividends (distributions) as you will need to pay higher rate tax on them unless they are in an ISA.

Gadfium

Ah, OK.
Once in the ISA I would pay tax at 28% on the divis? Or at the BRT?

dunstonh

In an ISA there would be no further liability for tax. Outside the ISA you do.

Gadfium

Thanks. I did think that divis attracted tax in or out of an ISA. I am corrected.