Vanguard to iWeb complications

Aylesbury_Duck

After some good advice on here, I decided to transfer the majority of my Vanguard ISA funds to iWeb, to save platform fees. I opened the iWeb account and completed the transfer instruction, stating that I want to transfer all previous years' ISA investments to iWeb but leave the 2019-20 funds live with Vanguard so I can keep my monthly contributions going in this tax year.

I've hit a complication in that Vanguard seem incapable of calculating how much of my funds are 2019-20 investments. I had some funds in VLS80 and VLS40 and a few months ago I did some consolidating and switched into VLS60. They appear to be counting funds I bought as part of that switching process as 2019-20 investments, even though the cash was put in in 2018-19 or earlier. I've corrected that but they're still having trouble calculating the correct amounts. This has been going on for over a month now.

I can see plenty of detail on the transactions page. To me, it seems quite simple: add up the units I have bought each month this tax year and subtract that from the total units. However, I wonder whether my switching in-year has made that impossible to 'unwind' because for example, buying 100 units of VLS80 in August has since become 90 units of VLS60 as a result of fund switching (made up figures for illustration).

Is it advisable to cancel the transfer and move the whole amount across to iWeb in April and just continue to fund my Vanguard account monthly 'clean' in 2020-21? My previous years' investments are worth c.£42k so the potential platform fee saving (from now until April) is shrinking as time goes by anyway.

bowlhead99

Aylesbury_Duck wrote: »

After some good advice on here, I decided to transfer the majority of my Vanguard ISA funds to iWeb, to save platform fees. I opened the iWeb account and completed the transfer instruction, stating that I want to transfer all previous years' ISA investments to iWeb but leave the 2019-20 funds live with Vanguard so I can keep my monthly contributions going in this tax year.

I've hit a complication in that Vanguard seem incapable of calculating how much of my funds are 2019-20 investments. I had some funds in VLS80 and VLS40 and a few months ago I did some consolidating and switched into VLS60. They appear to be counting funds I bought as part of that switching process as 2019-20 investments, even though the cash was put in in 2018-19 or earlier. I've corrected that but they're still having trouble calculating the correct amounts. This has been going on for over a month now.

I can see plenty of detail on the transactions page. To me, it seems quite simple: add up the units I have bought each month this tax year and subtract that from the total units. However, I wonder whether my switching in-year has made that impossible to 'unwind' because for example, buying 100 units of VLS80 in August has since become 90 units of VLS60 as a result of fund switching (made up figures for illustration).

Is it advisable to cancel the transfer and move the whole amount across to iWeb in April and just continue to fund my Vanguard account monthly 'clean' in 2020-21? My previous years' investments are worth c.£42k so the potential platform fee saving (from now until April) is shrinking as time goes by anyway.

The previous year investments of c.42k are costing you about a fiver a month to hold on Vanguard's platform. So it costs you £15 to leave the transfer until January, February and March are completed using Vanguard's platform to fund the rest of this tax year's contributions.

Meanwhile you have £unknown of current year contributions which are costing you £unknown per month (but less than the fiver a month).

So let's say it would cost you ~£20 to use the Vanguard service until the end of the year.

If you're getting frustrated, why not just cancel the 'partial transfer' or modify your request and just do a full transfer to IWeb right now? You won't need to spend more than about £20 on trading costs at IWeb to get you through the rest of the year because trades only cost £5 a pop and there are only three months left, and you are not some daytrader who needs lots of trades.

If you have the intention to make purchases on, say, 4 funds by the end of the tax year, you could do one purchase on each at IWeb before the end of the tax year for £20. And you probably don't even have that intention to be buying 4 separate funds on the platform, given VLS60 contains 18 funds itself? If you have only one or two or three funds, and enough cash saving to pay for 4 trades, you could do multiple trades in at least one of them.

As £20 is only 0.05% of £40,000 and markets can move the value of your investments by twenty or forty times that in a single day (1-2%), you are probably overthinking it.

EthicsGradient

Aylesbury_Duck wrote: »

I've hit a complication in that Vanguard seem incapable of calculating how much of my funds are 2019-20 investments. I had some funds in VLS80 and VLS40 and a few months ago I did some consolidating and switched into VLS60. They appear to be counting funds I bought as part of that switching process as 2019-20 investments, even though the cash was put in in 2018-19 or earlier. I've corrected that but they're still having trouble calculating the correct amounts. This has been going on for over a month now.

I can see plenty of detail on the transactions page. To me, it seems quite simple: add up the units I have bought each month this tax year and subtract that from the total units. However, I wonder whether my switching in-year has made that impossible to 'unwind' because for example, buying 100 units of VLS80 in August has since become 90 units of VLS60 as a result of fund switching (made up figures for illustration).

Is it advisable to cancel the transfer and move the whole amount across to iWeb in April and just continue to fund my Vanguard account monthly 'clean' in 2020-21? My previous years' investments are worth c.£42k so the potential platform fee saving (from now until April) is shrinking as time goes by anyway.

Yes, I'd agree it's impossible to distinguish between units bought with this year's cash contribution, and units bought with money that was proceeds, this year, of sales in the ISA. I'm surprised Vanguard has even attempted to. If HMRC saw this, I bet they'd object. The only difference between them is your 'intention' that one set of purchases was from this year's contribution, and another from earlier investments.

For the sake of definitely staying within the rules, I'd say leave it until the new tax year. Or, if you have the spare cash, make the rest of this tax year's contribution early, and then you'll be able to say "transfer all years, and I'm not contributing more to iWeb this year".

HCIMbtw

It would seem simpler to tell them the value you want transferred!and which funds you want the money to be sold from

Aylesbury_Duck

Thank you both, that's really helpful and bowlhead, you're right that I'm overthinking things for the sake of an immaterial amount of money!

I've got a couple of regular savers about to mature which will give me the £9k cash available I need to complete this tax year's £20k contribution, so I think I'll dump that straight into Vanguard and do a complete transfer, then recommence monthly subscriptions into Vanguard from April.