Multiple providers for my Stocks & Shares ISA are allowed?

matamouros

Hi everyone,

Apologies if I missed something obvious, but I can't find it explicitly myself. I have opened a Nutmeg account and my first Shares & Stocks ISA there, so that one is going. But I would like to spread my investments, so other than the Nutmeg funds I would also like to buy some stocks myself, in something like AJ Bell or X-O. Can I essentially set different slices of my Stocks & Shares ISA yearly allowance between these providers? (obviously the sum total would have to stay under £20k)

This wouldn't make as much sense for a Cash ISA, but it makes a lot of sense for a S&S ISA.

Thanks,

Pedro.

eskbanker

No, you can only pay new money into one S&S ISA in any given tax year, so if you've paid into Nutmeg already then you can't pay into another one until April 2019.

Having said that, during this tax year, you could liquidate your Nutmeg investment(s) and transfer all of this year's contributions into another S&S ISA in order to benefit from the broader range elsewhere, or, if you qualify for a Lifetime ISA (and are happy to accept the access limitations/penalties), you could pay £4K into one of those, as it's deemed by HMRC to be a different type of ISA....

matamouros

Thanks very much, very helpful. Would be great that S&S ISAs could have their allowance spread over multiple providers. A Cash ISA makes sense that you stick with one single provider - the one which will provide the best rate for a particular scenario - but for S&S ISAs it just makes sense that you could spread your investments around, instead of having to put all your eggs in one provider basket...

eskbanker

This is exactly why it's usually recommended on here that people establish what they want to invest in before considering which platform will suit their needs best. Going for one or more of Nutmeg's proprietary selections and then wanting to dabble in individual stocks isn't generally a good idea as there are much better and more cost-effective ways of achieving diversification when starting out on the investment journey, but if you're wanting to stay within the ISA umbrella then your options are unfortunately constrained by your earlier decision, but it's not too late to sort out a cohesive strategy/plan and then migrate to it....

matamouros

Thanks very much eskbanker. Aware that I can always move my ISA to any other provider. Unfortunately I am indeed just starting this investment journey (a tad too late in my life, unfortunately), so I'm very conscious that I'm probably far from the optimal strategy for my situation. Nutmeg is essentially a good old fund management that has a modern web app in front and that I can change a few parameters to broadly signal my aversion to risk, pay in money, and generally more conveniently manage. On top of that I know a few stocks that I would like to bet and be exposed to more risk on, hence wanting to cherry pick a bit more granularly. But as soon as I find a better strategy and/or tools, I will change when I can for sure. Thanks very much!

bowlhead99

matamouros wrote: »

Thanks very much eskbanker. Aware that I can always move my ISA to any other provider. Unfortunately I am indeed just starting this investment journey (a tad too late in my life, unfortunately), so I'm very conscious that I'm probably far from the optimal strategy for my situation. Nutmeg is essentially a good old fund management that has a modern web app in front and that I can change a few parameters to broadly signal my aversion to risk, pay in money, and generally more conveniently manage. On top of that I know a few stocks that I would like to bet and be exposed to more risk on, hence wanting to cherry pick a bit more granularly. But as soon as I find a better strategy and/or tools, I will change when I can for sure. Thanks very much!

If you have a few more specific stocks you'd like to bet on - and presumably you're not talking about many tens of thousands of pounds for this, as you were imagining fitting it in your ISA allowance - perhaps a key thing to realise is that you don't necessarily have to fit it in an ISA because you would not necessarily be paying much tax anyway.

For example, if you sell shares thia tax year for £15000 that you'd bought for £10,000, your gain is £5000. But each tax year you have an exemption for the first £11,700 of gains that you cash in. It's a use it or lose it exemption that doesn't carry forward, but you get a new one every year. So when you're dabbling with bits of play money here and there in direct shareholdings, there may not actually be any gains in excess of the exemption. Especially when you consider you'll probably have some losses here and there which can be offset against gains.

Likewise, say you have a portfolio of £20,000 of shares in companies, outside an ISA and they pay you £1200 of dividends (an ambitious 6% yield, nearly all companies pay less). You have an annual dividends allowance of £2000 and the amount above that is only taxed at 7.5% for a basic rate taxpayer. So unless you work for yourself through a personal service company, extracting most of your 'salary' by way of dividend, you would be unlikely to be close to the limit of your allowance and actually need to pay tax on the dividend income you get from your play money.

You mentioned that you are pretty far from the optimum strategy already. Fair comment, it's to late to fix the past. But that's not necessarily an excuse to split your money between a semi-robo-advised solution and a mixed bag of tips and hunches that you self selected. It might be more sensible to stick it all in the "sensible" ISA you've set up. Or transfer to an ISA with broader options; eg use an ISA platform that allows you to hold a managed fund at a predetermined risk level that you like, which you add to over the course of the year in the amounts you want; and then also buy your shares in xyz plc in the same place.

Something else to bear in mind is, although you can't contribute new money to more than one S&S ISA in a tax year (because current year S&S ISA money must stay together), once you get to a new tax year you are free to open an S&S iSA elsewhere. You can have multiple S&S ISAs, you just can't have your current year S&S ISA money split in two different places.

So, you could fill your Nutmeg account to the brim for this year, while doing your self select investing elsewhere, outside an ISA wrapper. Then next year set up an ISA with a traditional S&S broker or broad investment platform, and rebuy your individual holdings in that; while continuing to invest at nutmeg (but in a general investment account, non ISA version)... then the following year, sell out of the unwrapped Nutmeg stuff to fund more Nutmeg ISA, while starting to do your self select stuff unwrapped again... In that way, you'd have two different S&S Isaac "on the go", though only adding money to one of them in any one tax year, and you would be periodically doing sales to make use of your CGT exemptions.

Sounds needlessly complicated - but Eskbanker already had the simple solution