Isa and shares - Dont understand - Newbie!

2006Kuredu

Hi All,

Wonder if someone can help me, first of all sorry I am a complete newbie when it comes to ISAs, despite being nearly 40 I've never had one... dont shout, we all need a light bulb moment just some of us take longer

To give the outline of my situation, I have some cash savings, very little, less that 1k in an M&S Money 6% account but hope to reach the 3k allowance by the end of the term. (I am a 40% taxpayer)

I also put £200 per month away in a work Sharesave scheme which is doing well, due to mature next year. I put a further £150 per month in a Sharematch scheme, where work match the full £150 put in - Great deal!

Now I was talking to a friend who said I could move these into a Stocks and Shares ISA - Is this the case? How does it work etc? Like I say Im a complete Newbie so have no idea.

Thanks in advance.

sorcerer

First off i would say think very carefully about moving any of these to an ISA. To me it seems like you are getting a good deal with what you have. Also think about putting more into a pension to reduce your tax bill, perhaps to get you below the 40% threshhold.


You should only really think about a S&S ISA, if you have spare cash, don't lose the benefits of your pension because of it. It might sound interesting to do but you can lose a lot of money if you are not sure what you are doing.


If you do go down that round, decide what you want to invest in, and learn about it, before you start putting in real money. You need to understand the risks, and if you are happy with that level of risk, and that's very much a personal thing.

Vortigern

2006Kuredu wrote: »

I also put £200 per month away in a work Sharesave scheme which is doing well, due to mature next year. I put a further £150 per month in a Sharematch scheme, where work match the full £150 put in - Great deal!

Now I was talking to a friend who said I could move these into a Stocks and Shares ISA - Is this the case? How does it work etc?

For the Sharesave scheme, you can put your newly bought shares into a S&S ISA within 90 days of buying them. This will avoid any capital gains tax arising on the gain between the option price at which you bought them, and the price at which you eventually sell them. You will also avoid any higher rate income tax on the dividends from these shares and you will not need to account for them on your tax return.

The rules for the Sharematch scheme are probably different and you'd need to refer to the scheme booklet. You will probably find that you have to hold these shares for a specified period to avoid paying income tax on the value of the free shares. You may find that as long as you leave the shares in the scheme, there is no CGT or income tax to pay.

2006Kuredu

Thanks Vortigern. Any ideas how I could put the Sharesave shares into an ISA - I assume they are still open to stockmarket spikes and dips and there is no way of locking in the price or selling them tax free (an impossible dream I guess)

Thanks

Vortigern

2006Kuredu wrote: »

Any ideas how I could put the Sharesave shares into an ISA?

Open a S&S ISA with your chosen broker, then send the share certificate with supporting documentation.

For example see the following instructions from TD Direct:
http://www.tddirectinvesting.co.uk/help/faqquestions/how-can-i-transfer-shares-into-my-isa/
The instructions for SAYE shares are at the bottom of the page.
Other brokers will use the same procedure.

2006Kuredu wrote: »

I assume they are still open to stockmarket spikes and dips and there is no way of locking in the price or selling them tax free (an impossible dream I guess)

Yes, they are still open to spikes and dips; there is no way of locking in your gain except to sell them. You can sell them tax-free within the ISA.

HMRC guidance on Tax and Employee Shares covers both your ShareSave and Sharematch schemes