ISA Clarification on 2 senarios advantages for a Vanguard Life Strategy Investment

rangers_fc

A Couple Of questions below Id apreciate any thoughts that more learned folk than myself can provide

Ive held & investment with F&C Inv trust for a period of 10 years or more, its not inside any tax
wrapper. The share price has increased a lot over this period. If I was to withdraw the funds lets say
it has a value of £14000 and I initially paid £7000. How does this work for tax implications. Lets
assume I am a basic rate tax payer.

Question 2
What is the advantage of an ISA stocks & shares investment over standard stocks & shares investment over a 5 year period with a a yield of 10% for ease of calculation.
So an investment that grows by 10% a year Lets say a investment of £20,000.


Question 3
[FONT=&quot]Lets say I have £50,000 to invest in Vanguard LifeStrategy 60% Equity Fund. Am I better investing £20,000 inside a tax wrapper and the remaining £30,000 outside a tax wrapper, if I wanted to invest this year assuming I havent utilised my ISA allowance this year
What would be the best way to invest and reduce the buy charges for the above investment. Would I be better investing directly via Vanguard or would it be cheaper to use Halifax share trading platform. If I intend to invest and leave the funds to hopefully grow without tinkering buying or selling much.[/FONT]

Keep_pedalling

Q1. Your £7k profit is well within your annual capital gains allowance so no tax to pay.

Q2. Any investment held in an ISA is free from tax on dividends and gains, so better in than out although on the figure you quote the saving on CGT would be minimal if any.

Q3. No advantage holding any of it outside an ISA although you can't put the whole lot in one go, and I am pretty sure the cheaper option would be with Vangaurd.

badger09

rangers_fc wrote: »

A Couple Of questions below Id apreciate any thoughts that more learned folk than myself can provide

Ive held & investment with F&C Inv trust for a period of 10 years or more, its not inside any tax
wrapper. The share price has increased a lot over this period. If I was to withdraw the funds lets say
it has a value of £14000 and I initially paid £7000. How does this work for tax implications. Lets
assume I am a basic rate tax payer.

Question 2
What is the advantage of an ISA stocks & shares investment over standard stocks & shares investment over a 5 year period with a a yield of 10% for ease of calculation.
So an investment that grows by 10% a year Lets say a investment of £20,000.


Question 3
[FONT=&quot]Lets say I have £50,000 to invest in Vanguard LifeStrategy 60% Equity Fund. Am I better investing £20,000 inside a tax wrapper and the remaining £30,000 outside a tax wrapper, if I wanted to invest this year assuming I havent utilised my ISA allowance this year
What would be the best way to invest and reduce the buy charges for the above investment. Would I be better investing directly via Vanguard or would it be cheaper to use Halifax share trading platform. If I intend to invest and leave the funds to hopefully grow without tinkering buying or selling much.[/FONT]

1) You have a CGT allowance of £11300 for this tax year. Basically, CGT is payable on the profit you have made, so, you can sell enough shares to realise a gain of up to £11300 with no tax implications.

2) There are 2 major advantages to investing inside an S&S tax wrapper
a) all income and capital gains are free of tax
b) you don't need to keep records of income & gains for tax purposes

On the scenario you have given I would look at IWEB.

On a single investment of £20k, you would pay a one off account opening fee of £25 + £5 dealing fee. Any future purchases would cost £5 but there is no charge for holding them

Investing direct with Vanguard would cost £30 every year on £20k, and obviously more if you make further purchases.

rangers_fc

Thanks for that useful information.

Regarding IWEB say I have utilised my stocks and shares ISA allowance for this year.

However I decide to utilise the IWEB platform outside of a ISA am I then free to transfer funds that I hold with IWEB into there ISA when the new tax year rolls around?
Is there advantages to opening a ISA with IWEB now, but leaving it dormant until the new tax year?

Vanguard Life Strategy Fund
How do I measure the performance of a mixed share investment. I believe Vanguard employs some form of rebalancing for the Life strategy funds that have a equity holding & a Bond Holding. How do you measure performance of these funds is Vanguard LifeStrategy 60% Equity that is listed on the stock market the complete value of the investment. Thus you can measure performance the same way you would with any other share investment, by its share price

badger09

rangers_fc wrote: »

Thanks for that useful information.

Regarding IWEB say I have utilised my stocks and shares ISA allowance for this year.

However I decide to utilise the IWEB platform outside of a ISA am I then free to transfer funds that I hold with IWEB into there ISA when the new tax year rolls around?
Is there advantages to opening a ISA with IWEB now, but leaving it dormant until the new tax year?

If you have used your S&S ISA allowance this tax year you have a couple of options. You could open a S&S ISA with IWEB & ask them to transfer in your existing ISA, either as cash or in specie (if you want to keep the same investments & IWEB offer them).

Or you could do as you suggest and open a non ISA Share Dealing Account, then on 6th April open a S&S ISA and sell & rebuy (up to £20k) inside the ISA. I don't see any advantage in opening the ISA now if you're not going to use it.

rangers_fc wrote: »

Vanguard Life Strategy Fund
How do I measure the performance of a mixed share investment. I believe Vanguard employs some form of rebalancing for the Life strategy funds that have a equity holding & a Bond Holding. How do you measure performance of these funds is Vanguard LifeStrategy 60% Equity that is listed on the stock market the complete value of the investment. Thus you can measure performance the same way you would with any other share investment, by its share price

Sorry, I don't really understand. When you say 'measure the performance', what do mean? Measure against what?

You will know how much the value has increased and can compare say the VLS 100% against its benchmark (IA Global) or you could compare say the VLS 60% with other funds carrying a similar % of shares & bonds.

Is that what you mean?

rangers_fc

Sorry, I don't really understand. When you say 'measure the performance', what do mean? Measure against what? You will know how much the value has increased and can compare say the VLS 100% against its benchmark (IA Global) or you could compare say the VLS 60% with other funds carrying a similar % of shares & bonds.

Is that what you mean?[/QUOTE]

Yes sorry what I mean is witha normal investment rather than a mixed allocation fund you follow the share price this usually indicates how your investment is preforming. Never having held a fund before I have not grasped how you measure its preformance relative to other funds or the FTSE etc. I suppose what I mean do these funds have a share price that rises and falls with the stock market

Alexland

Yes on funds they have a unit value that reflects the net asset value of the contents. You can see the unit value - and the total value of your units change daily.

ETFs and Investment trusts are more complex as they are traded.

badger09

rangers_fc wrote: »

Sorry, I don't really understand. When you say 'measure the performance', what do mean? Measure against what? You will know how much the value has increased and can compare say the VLS 100% against its benchmark (IA Global) or you could compare say the VLS 60% with other funds carrying a similar % of shares & bonds.

Is that what you mean?

Yes sorry what I mean is witha normal investment rather than a mixed allocation fund you follow the share price this usually indicates how your investment is preforming. Never having held a fund before I have not grasped how you measure its preformance relative to other funds or the FTSE etc. I suppose what I mean do these funds have a share price that rises and falls with the stock market[/QUOTE]

Like this?

https://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=ACFDQ&univ=O&pageType=performance

rangers_fc

badger09 wrote: »

Or you could do as you suggest and open a non ISA Share Dealing Account, then on 6th April open a S&S ISA and sell & rebuy (up to £20k) inside the ISA. I don't see any advantage in opening the ISA now if you're not going to use it.

The reason I was considering opening a ISA account initially and not funding it was the initial £25 fee to set up a account, is it £25 to set up a ISA account & £25 to set up a share dealing account with IWEB? Looking on the web site it mentions £25 to set up a ISA account with a standard share dealing account being set up in tandem for one £25 fee. However how does it work if you initially set up a share dealing account then later set up ISA account is that one or two times £25?

rangers_fc

Trading on IWEB platform. When you make a payment into youre account,
How long from making a buy order from active to the investment proceeding to executed.
How long does a trade take from Pending to Executed?
Is it dependant on the volume of trades IWEB has in a Fund?

badger09

rangers_fc wrote: »

Trading on IWEB platform. When you make a payment into youre account,
How long from making a buy order from active to the investment proceeding to executed.
How long does a trade take from Pending to Executed?
Is it dependant on the volume of trades IWEB has in a Fund?

Depends on what you're buying. Shares & ETFs should be immediate, though I haven't actually bought any on IWEB (only on HL).

Funds however take around 3 - 4 days, depending on what time of day you commit to buy. Someone has posted an explanation of the process somewhere, but it might take some finding:o Suffice it to say, the time will be similar whichever platform you're using, because the buy orders have to go to the fund house (possibly once a day), then it takes a couple of days for the stock to appear in your IWEB account.

From memory of my most recent 'buys', if I buy say on Monday, the stock will appear online by Thursday, usually having been bought on Tuesday or Wednesday. I don't bother checking the progress from 'active' to 'executed'. IWEB always email once the trade has been executed though.

HTH