S&S Fund selling question

The_Real_Dean

Ok so i put the full 15k allowance into last years S&S ISA and invested the whole lot in a load of funds.

Now, if someone is constantly selling and re-buying funds with the 15,000 allowance and making profit, is it still all tax-free?

What i'm trying to say is if you have a fund that you paid 1,000 into and its now worth 1,100 and you sell it, will that 1,100 go back into the S&S ISA pot ready to be reinvested again?

Archi_Bald

You can sell as often as you like and as long as the money never leaves your ISA account, it will stay tax free. The entire point of an S&S ISA is to protect your gains from the taxman.

KGriff

The way to think of your S&S ISA is perhaps to think of it as a wrapper or container. For simplicity I will refer to it as a container. That container consists of the holding account where you deposit the cash lump sums and from which you can buy and sell your chosen stocks and shares, it is just a place where the money is held when it is not invested.

The shares or equities maybe purchased direct in say a company or you may invest the money in larger funds which are managed by a team of people with a fund manager who spread the money across individual or several financial sectors such as agriculture, mining, banking etc. (example Invesco Perpetual Emerging European Acc Fund).

You can invest in most types of investment including shares listed on recognised global stock exchanges, UK and European gilts, corporate bonds, investment trusts and funds. This makes them ideal for longer-term savings goals, such as boosting your retirement income.

You can deposit the annual ISA allowance into your container (or wrapper) each financial year (i.e. This year it is £15,240 but remember this full amount is shared with any cash ISA) So if you open a cash ISA this year and deposit in £5,240 then you can then only put £10,000 inside your stocks and shares ISA container.

As you buy and sell the shares or fund investments the money will move in and out the ISA cash holding account, but it still remains within your container. You are free to buy more shares etc with the total money held in that account because it is still held within the wrapper. Think of profits made as simply being the interest added to your savings container.

If however you choose to withdraw some cash and move it (perhaps to your current bank account) then that withdrawal moves outside the container and is no longer part of your ISA and so it loses its tax-free status and if you have reached your ISA savings limit for that financial year then you cannot return the money back to your ISA until the next financial year (April 6th 2016).

In the last budget George Osborne announced changes to the rules and in due course you will be able to withdraw money from the ISA to your current account and return it back to your container later providing the total does not exceed the annual allowance (£15,240)

So whilst any money is in the container you are free to use it to invest in anyway you see fit.

Obviously with theses type of ISA's, the value of your total fund in your container can go down as well as up, depending on how well the shares or managed funds etc. perform.

I hope that simplifies things and gives you the answers you were looking for.

The_Real_Dean

Cheers guys

crumpetman

Also, aren't there some fees and charges with buying and selling?

badger09

crumpetman wrote: »

Also, aren't there some fees and charges with buying and selling?

Some platforms (eg Hargreaves Lansdown - other platforms are available ) don't charge fees for buying & selling funds

dunstonh

although there could be dilution levies or bid/offer spreads and some platforms do charge.

Vortigern

crumpetman wrote: »

Also, aren't there some fees and charges with buying and selling?

Also there can be ongoing fees just for holding your investment in an ISA.

For example HL charge 0.45% per annum, others may charge less, IWeb has no ongoing charge, but a hefty entry fee.