Vanguard Lifestrategy

brendon

Broken_Biscuits wrote: »

They just got a little cheaper too!
The .1 they used to charge on new investments has been scrapped

The 0.1% fee was invested back into the fund, so was only a fee if you were a short term holder. If you held long term, you actual benefited from this fee.

bowlhead99

Dunney77 wrote: »

How do you guys hold these funds?

Do you just have them in your ISAs.

I have enough cash to fill my ISA but what would I do with the remaining?

As with any comparable funds, you can put them in ISAs (including transfers from previous years' cash ISAs you might have hanging around) or into self invested pension plans (SIPPs) or just hold them "unwrapped" in a normal, non-tax-privileged account with the same investment provider that gave you the S&S ISA or SIPP.

If you don't use tax-advantaged accounts you will have to keep detailed records of transactions and statements for tax purposes, whether or not any tax is actually due (which will depend on the amounts invested and the mixture of interest, dividends and gains included in the overall return you get).

Dunney77

bowlhead99 wrote: »

As with any comparable funds, you can put them in ISAs (including transfers from previous years' cash ISAs you might have hanging around) or into self invested pension plans (SIPPs) or just hold them "unwrapped" in a normal, non-tax-privileged account with the same investment provider that gave you the S&S ISA or SIPP.

If you don't use tax-advantaged accounts you will have to keep detailed records of transactions and statements for tax purposes, whether or not any tax is actually due (which will depend on the amounts invested and the mixture of interest, dividends and gains included in the overall return you get).

Sounds like a lot of work for passive investing so I would assume the SIPP would be better?

dunstonh

Dunney77 wrote: »

Sounds like a lot of work for passive investing so I would assume the SIPP would be better?

Unwrapped holdings are no harder or easier than an ISA other than than making sure you avoid CGT. So, you just bed & ISA any unused ISA allowance each year until you no longer hold anything unwrapped.

Or you could one of the other tax wrappers available in the UK. Pension, onshore bond, offshore bond etc. However, its likely that unwrapped is the best option.

using passive investments doesnt mean you avoid all administration.

Dunney77

dunstonh wrote: »

Unwrapped holdings are no harder or easier than an ISA other than than making sure you avoid CGT. So, you just bed & ISA any unused ISA allowance each year until you no longer hold anything unwrapped.

Or you could one of the other tax wrappers available in the UK. Pension, onshore bond, offshore bond etc. However, its likely that unwrapped is the best option.

using passive investments doesnt mean you avoid all administration.

Apologies, that might have come across as quite rude against the advice which has been given.

I see what you mean. So I would invest my full ISA allowance this year and then, using an unwrapped investing account, invest my main lump sum in VLS 80 and take away the capital gains each year if they reach £11,000?

elantan

Is it advisable to have Vanguard 80 etc in both your pension and ISA account or are you better having them in one or the other ?

bowlhead99

You could see elsewhere on the forum for the benefits of pension over ISA or vice versa; tax relief on the way in vs tax relief on the way out, limitations on when you can access it etc.

But the VLS is just a fund that invests in a variety of asset classes and countries. It's not particularly "suited", or "unsuitable" for an ISA or pension wrapper. It is just one of many types of fund that can be held in either. Broadly, SIPPs and ISAs can hold the same types of investments.

dunstonh

To work backwards....

Think of tax wrappers as a container for your investments. You can use the same investment across multiple containers (tax wrappers).

So, you can have L&G MI5, BC100 or VLS100 or whatever in any of the containers and you would get exactly the same returns and exactly the same charges. The only difference with tax wrappers is the tax handling and the maturity process (in the case of pensions in particular).

This year you invest £15240 in the ISA and surplus in the unwrapped account. Next year you may only invest £10,000 in the ISA. You would have a surplus £5240 ISA allowance available. So, you could move £5240 from the unwrapped account into the ISA account. That is known as bed & ISA.

AlanP_2

dunstonh wrote: »

So, you could move £5240 from the unwrapped account into the ISA account. That is known as bed & ISA.

Don't want to derail thread but why is known as Bed & ISA?

Is it no different in practice to putting £5240 out of savings into the S&S ISA in that year?

westy22

With a Bed & ISA you instruct the broker to sell £x worth of shares in the unwrapped account and immediately re-buy back the same shares in the ISA as a linked transaction. Most brokers offer to only charge one fee for the two transactions so it is a little cheaper.

Note that the broker may not be able to buy back the exact number of shares you sold due to the buy/sell spread and price differences even though the transactions may be only seconds apart. You also still have to pay the stamp duty on the buy transaction.