If I want to "bed and ISA", is it sensible to use the same platform provider?

Snakey

I have a stocks and shares ISA with Halifax.

I now find myself with a bit of surplus income, and was thinking of dropping it in to a normal share dealing account and then decanting £20k of it once a year into the ISA. The shares would mirror the ISA holdings, with some small differences due to the ISA options being slightly more limited.

I'm thinking I'll put in an initial £10k and then £2k a month thereafter, so there would hopefully be a balance building up in the non-ISA account over time despite the £20k a year coming back out.

Before I go platform-hunting, I was hoping to freeload from the experience of those of you who've done lots of buying and selling of shares: Is there a significant admin/simplicity advantage of using the same provider (for ISA and non-ISA, knowing there will be transfers between the two) that I should to take into account when deciding, rather than just the cost?

barginfinder

the decanting as you put it will involve dealing costs so maybe not the best way if you are planning on having lots of different shares - I would put 20K a year straight into the ISA and then any left over into the non ISA wrapper - any reason why you want shares instead of funds, trusts, eft etc?

Snakey

I see what you're saying. The ISA is already maxed out so the idea was to put next year's allowance in on 6 April out of this year's savings and get the maximum amount sheltered from tax as soon as possible.

Perhaps I won't... it was partly for tax-free dividends* but also I had this idea that I'd use my CGT allowance, but really it's doubtful that this would be an issue for a while yet (can't see me making £11k gains on a £20k investment in less than a year, unless sterling really does hit the floor).

Maybe the thing to do, then, is stuff the ISA for the first half of the year and then the non-ISA for the second half, rather than running the two in parallel which was my initial thought-without-having-really-thought. Fewer dealing fees, no sale costs, and no decanting necessary unless/until the gains get big.


*My income falls within the personal allowance claw-back band, so even the "tax-free" non-ISA amount is effectively taxed at 20%. And anything above that amount would be at 52.5%!


[ETA: your question about "why shares?" comes back to my original idea of mirroring the ISA portfolio outside the ISA. No other reason really. I already have some EIS, if that matters.]

Heedtheadvice

Just a few thoughts for you:

1. Make sure you have done all the other advisable things before investing -you may already have done so (sort debts, emergency fund, pension etc,)
2 Ensure you know what your goal is and if it has a timespan of less than ten years review if you should be investing at all....or you might just be thinking of trading?
3 If investing do it to meet your goals and risk capacity. Any stand alone Stocks and shares need not, and probably should not, mirror what is in your ISA. It should form part of your whole strategy and for small investors collective funds/trusts are often best!
4 If you are Bed and ISAing your 'share' investment providers/stockbrokers often give a 'discount' when they do all the work. Nevertheless there is a cost to do so.
So, 5, minimise the need for those transactions, max your ISA, and ensure your choice of provider/stockbroker can do transactions as close together as possible to reduce risk of losses due to share/fund price changes.

Lastly I was interested to hear you have limited options within your ISA. For many small investors good providers will be able to hold all you need within their ISA -unless you are into more specialist types of investment and I always wonder why a small investors decide those are for them!

enthusiasticsaver

I use Halifax and did bed and isa this year and will do so next year after April. We have just invested again unwrapped due to us already using our allowances for 2017. It is certainly easier to use the same platform and as Halifax is fixed fee surely cheaper too.

cloud_dog

Snakey wrote: »

I have a stocks and shares ISA with Halifax.
.....

Before I go platform-hunting, I was hoping to freeload from the experience of those of you who've done lots of buying and selling of shares: Is there a significant admin/simplicity advantage of using the same provider (for ISA and non-ISA, knowing there will be transfers between the two) that I should to take into account when deciding, rather than just the cost?

Assuming you are now brought round to funding your ISA first and then the remaining months money for the year goes into the dealing account then the primary bed 'n' ISA consideration is of a lesser / lower importance. Having said that from your positions it would probably make sense to undertake this activity (ISA account and dealing account) with the same provide for simplicity / ease of B&B if you ever needed to.

As you are already with Halifax and depending on your trading (buy/sell) activity you may want to consider opening an account with iWeb. They use the same Halifax platform but other than an initial account opening fee (£25) they only charge £5 per trade so you may (depending on buy/sell activity) make a savings overall with iWeb.