Flexible Stocks & Shares ISAs

dzo

I'm currently looking for flexible S&S ISAs and was hoping to tap the forum's collective knowledge.

In the MSE article on Flexible ISAs, Martin mentions a trick to use the maximum ISA allowance, but keep the money in a higher interest account for most of the year. I'd like to take advantage of this, but since I already have a Help To Buy ISA I can't open a flexible Cash ISA.

So far I've found S&S ISAs from IG and MoneyFarm that are flexible. My plan would be to put £12,840 (the ISA limit minus my HTB ISA contributions) in on 5th April 2017, take it out again on 6th April 2017, and then put it back in on 5th April 2018 to preserve my allowance.

Both the ISAs I've found so far seem to have fees only for investing so presumably just putting cash in for one day would not incur any fees.

Does anyone know of other S&S ISAs that would be suitable for this?

MyOnlyPost

Do you have lots of money currently in a cash ISA? Are you trying to build an allowance for the future? I think the article is aimed at those with large cash ISA's now wishing to get a better interest rate, rather than those with large amounts of cash they wish to get into an ISA

It seems to me you could put the full allowance in on the 5th of April, then next years allowance on the 6th of April, withdraw the lot on the 7th of April and invest for the year in high interest current accounts, then put all the money back into the ISA on the 5th of April 2018 and then repeat. Doing this you have trebled your nominal ISA pot in 1 year and 4 days

dzo

Currently my only ISA is my Help To Buy ISA.

I don't want to lose this year's ISA allowance as my long term plan is to put all my investments in a S&S ISA, but at the moment I prefer to invest elsewhere.

My plan would be to do what you describe, but, as I understand it, I can't open a Cash ISA this tax year because I've paid into a HTB ISA. That's why I'm looking for a flexible S&S ISA to put the cash into for one day.

MyOnlyPost

Ok I think I get it, you want to build an ISA allowance so that in future years you may be able to put more into the ISA than is allowed usually within the tax year?

I am pretty sure that Hargreaves Lansdowne have 0 charge for holding cash, but they do have a £295+ VAT charge for closing the account in the 1st 12 months and they reserve the right to close it if the balance is below £1000 uninvested. You need to check providers for these similar clauses too, I doubt any platform would be happy with you doing this but they may not have a specific rule against it (yet)

ColdIron

MyOnlyPost wrote: »

I am pretty sure that Hargreaves Lansdowne have 0 charge for holding cash, but they do have a £295+ VAT charge for closing the account in the 1st 12 months

I think the early closure fee only applies to their SIPP

dzo

MyOnlyPost wrote: »

Ok I think I get it, you want to build an ISA allowance so that in future years you may be able to put more into the ISA than is allowed usually within the tax year?

Exactly.

MyOnlyPost wrote: »

I am pretty sure that Hargreaves Lansdowne have 0 charge for holding cash, but they do have a £295+ VAT charge for closing the account in the 1st 12 months and they reserve the right to close it if the balance is below £1000 uninvested. You need to check providers for these similar clauses too, I doubt any platform would be happy with you doing this but they may not have a specific rule against it (yet)

This is the sort of thing I'm worried about. I'd imagine that most providers have some sort of clause allowing them to close your account if they think you're abusing it.

grey_gym_sock

does moneyfarm let you hold cash inside their S&S ISA? or do they get you to complete a risk questionnaire, and then have the money automatically invested based on your answers? you don't want it invested at all if you're only putting it in for a few days around the end of the tax year.

IG is aimed at people who want to buy their own selection of shares inside an ISA, so they must surely allow you to hold cash.

i agree that you need to check the minimum balance to keep the account open. if there's no minimum, i'd leave £1 in, in case they automatically close empty accounts. but there may be a higher minimum.

Vortigern

dzo wrote: »

My plan would be to put £12,840 (the ISA limit minus my HTB ISA contributions) in on 5th April 2017, take it out again on 6th April 2017, and then put it back in on 5th April 2018 to preserve my allowance.?

I wouldn't leave it as late as 5th April. You have to guard against the possibility of an outage at your bank, or an additional security check, causing your transfer to be delayed.

dzo

Vortigern wrote: »

I wouldn't leave it as late as 5th April. You have to guard against the possibility of an outage at your bank, or an additional security check, causing your transfer to be delayed.

Good point.

Since my last post I've researched further and found another option. IFISAs can also be flexible and are probably less likely to be closed if you don't invest much. The only flexible IFISA I have found so far is from Abundance.

At the moment this is my preferred option because I know there'll be no fees, and a P2P platform is unlikely to be bothered if I keep a nominal sum in the account for most of the year (Abundance's minimum investment is £5).