Share Dealing Discussion Area

Aegis

King_Weasel wrote: »

I find that brokers seem to charge annual fees for ISAs where they don't for ordinary accounts. So I wonder whether it's worth it, though when I raised this issue here others disagreed with me.

Depends on how much tax you will save in the long run. if you're wanting to hold on to these shares for 20 years or so, then eventually you'll probably be looking at a monster CGT bill, which would be reduced to 0 if you've been buying in to an ISA.

King_Weasel

Aegis wrote: »

if you're wanting to hold on to these shares for 20 years or so, then eventually you'll probably be looking at a monster CGT bill

I should be so lucky!

tonyhamm

Well I am thinking of opening a share dealing account and have gathered the following based on an account with 6 trades per year and half the year inactive. If anyone thinks they know a better broker then please post.

Ordinary Share Dealing online

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(1) Hoodless Brennon - £8 per trade (1-10 trades, £6.50 for 20+ trades)
inactivity fee £5 per quarter - so £20 per year if no trades.
= £8 x 6 = £48 + £10 (inactive) = £58 per year.

(2) Self Trade - £12.50 per trade, no inactivity fee
= £12.50 x 6 = £75 per year

Shares ISA (based on 6 trades per year)

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(1) £8 per trade and £50 per year management fee = £98 per year (*)
(2) £12.50 per trade and £25 per year management fee = £100 per year

(*) Requires sharedealing general account to also be opened.

Since you get a referral bonus with (2) there is not that much between them for the first year, I guess over a three year view assuming the charge difference exists you would be better off with (1).

Are these shares ISAs worth it for the long term?

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Running a spreadsheet, if your portfolio grew with the economy at 4% inflation + 2% real, i.e. a 6% nominal growth rate, in line wth most portfolios, over 10 years of plugging away with your shares ISA, Your incremental drip fed £70,000 investment would be worth about £95,600, tracking (staying ahead of) inflation and giving a small return (because the investment is 7k per year fed in drips).

With a 7% nominal growth rate, you get £101,150. and in the tenth year your return is about £6,617 - well under CGT of 9.6k, plus, since you cannot carry forwards your inevitable losses in an ISA against profits I do not see what the advantage is for the basic rate taxpayer.

Each year you lose about 2% in fees and stamp duty on your 7k principle (assuming 6 trades per year), before you actually invest a bean. Without this -2% you would be looking at 103,400 at nominal 7% return, and around 98k at nominal 6% return at the end of the decade.

You would need annual, nominal gains of 10%, perhaps easily achiveable because inflation is rising, compounded per year on your ISA over a 10 year period to before it makes sense (assuming the CGT is not raised in line with inflation in a decades time). Still, a shares ISA is hardly a compelling investment as far as i can see.

tsmiggy

This probably as been posted before,but i shall ask again.I have shares with both Alliance Leicester,and Friends Provident,both these shares were given when these institutions became banks,so they in a way cost nothing.If i now wanted to add extra shares,then how would i go about it.I have seen share dealing sites,but they are ont always clear.I am aware i will pay commission,but would that vary with the amount of shares purchased.Would i have to buy a large amount of shares for this to be worthwhile.Any help would be appreciated,if its only to tell me to leave shares alone

Cheers

tonyhamm

As an update to my above post iii now do a shares isa with no fees and £10 dealing charge. I believe the downside may be that the tradespreads are wider

THE_AMATUER

Can someone help me please? I have £1000 in Halifax (HBOS) shares that I bought years ago. I now need the money and want to sell. Do I have to use the Halifax to sell them or are there cheaper options? I've never had any dealings with selling shares so any help would be useful. Also would I get my original investment back or do you get back whatever the shares are now worth?

thanks.

Rainyday

To echo a previous poster

"I would really like to know what the cheapest option is for an execution only service over the web for 1 or 2 trades a year. Any idea?"

I live abroad - do any of the online sharedeal services acept credit card payments or does it have to be a direct bank transfer?

Thanks

kah22

Hope I'm in the right board.

My introduction to Share dealing was about ten years ago when myself and a few Open University friends formed a Share Club. It's gone now but it was a good place to learn a little about dealing - and we did make a few pound.

Since the club folded I've bought a few shares myself and I've stuck with two firms Vodafone and Loyds TSB, I reinvest the dividend believing in the power of compound interest. I never buy shares with money that I'm reasonably sure I'll not need for at least five years.

Recently I came into a windfall and I'm thinking seriously about buying some more shares with it. I'm treating it as a long term investment, minimum five years. It strikes me that with Shares dropping at the moment now could be a good time to buy and certainly where Blue Chip companies are concerned.

Given that we are entering into an uncertain economic future what's members view of buying Shares at this point in time. I appreciate that there are other safer forms of investments: ISA's, fixed term accounts etc but it has always been my belief that chosen well Shares will, over a period, outperform these type of investments - and as I said above I' going with Blue Chip companies.

I appreciate that shares can fall as well as rise.

Phew - big post!!

Kevin

tradetime

tsmiggy wrote: »

This probably as been posted before,but i shall ask again.I have shares with both Alliance Leicester,and Friends Provident,both these shares were given when these institutions became banks,so they in a way cost nothing.If i now wanted to add extra shares,then how would i go about it.I have seen share dealing sites,but they are ont always clear.I am aware i will pay commission,but would that vary with the amount of shares purchased.Would i have to buy a large amount of shares for this to be worthwhile.Any help would be appreciated,if its only to tell me to leave shares alone

Cheers

Most, but not all, share dealing sites charge a per ticket fee, that is a flat rate for a purchase or sale of shares, on top of that, for UK shares, there will be stamp duty payable at something like 0.5% (don't quote me on the exact % as I don't trade UK shares, but you get the idea) I think the stamp duty is only payable on one side of the transaction, but I could be wrong. Probably not hugely informative but since no-one else has replied I thought I'd try and give you some idea. This info should be on all broker sites.

tradetime

THE_AMATUER wrote: »

Can someone help me please? I have £1000 in Halifax (HBOS) shares that I bought years ago. I now need the money and want to sell. Do I have to use the Halifax to sell them or are there cheaper options? I've never had any dealings with selling shares so any help would be useful. Also would I get my original investment back or do you get back whatever the shares are now worth?

thanks.

There probably are cheaper options generally (don't know what H'fax charge), but for a one off sale they likely wouldn't be worth it.
The point of buying and selling shares is that you don't get your original investment back, the general idea is that you get more back, that's the whole point, of course this brings the risk that you may get less. When you sell you will get current market price less comms