Purchasing shares within an ISA

Grenage

While I don't have a lot invested, the overwhelming majority is in managed funds; they've done well so no complaints.  I've recently enjoyed purchasing shares within my ISA but there are no non-FTSE offerings.

I am assuming that you can't wrap shares traded on foreign exchanges within an ISA.  Is that correct?

steampowered

You can hold foreign shares in an ISA so long as they are on a "recognised investment exchange". I've certainly held NASDAQ and S&P shares in my S&S ISA in the past.

However, not all providers will offer the full selection of markets, if your provider doesn't offer the share you want, you may need to move to another provider.

george4064

Which platform are you using?

NorthernJoe

If they offer an "ISA" then the shares that are available to purchase on that section of your platform will be within your ISA wrapper including "foreign shares". Many of your funds will probably have foreign holdings. 

It's proving to be an increasingly popular option for retail "investors" and many platforms make it very easy, possibly too easy.

A simple app on a smartphone, click, swipe & you've suddenly bought shares in a recently bankrupt car rental company that seems to be doing very well over the previous week. 

bowlhead99

Grenage said:

While I don't have a lot invested, the overwhelming majority is in managed funds; they've done well so no complaints.  I've recently enjoyed purchasing shares within my ISA but there are no non-FTSE offerings.

I am assuming that you can't wrap shares traded on foreign exchanges within an ISA.  Is that correct?

It's not correct - as mentioned by steampowered you can hold foreign shares as long as they're officially listed on any recognised stock exchange or admitted to trading on a recognised EEA stock exchange.  You can also hold depositary interests (eg CDIs) or depositary shares / receipts (e.g. US ADRs) as long as the underlying share that they represent does itself meet the listed / admitted to trading criteria on a recognised stock exchanges. 

https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#qualifying-investments-for-stocks-and-shares-isas

If you're not seeing any offerings from outside the FTSE it may just be that your ISA manager (stockbroker or investment platform) doesn't offer trading on other exchanges - but it's not because HMRC don't let them, it's just because they think their customers won't give them enough extra business to justify the cost of offering it. It's cheaper for them to only deal with the London stockmarket. One of my larger holdings in individual companies is Tencent, bought on the HK exchange but held in both my ISA and SIPP.

george4064

bowlhead99 said:

Grenage said:

While I don't have a lot invested, the overwhelming majority is in managed funds; they've done well so no complaints.  I've recently enjoyed purchasing shares within my ISA but there are no non-FTSE offerings.

I am assuming that you can't wrap shares traded on foreign exchanges within an ISA.  Is that correct?

It's not correct - as mentioned by steampowered you can hold foreign shares as long as they're officially listed on any recognised stock exchange or admitted to trading on a recognised EEA stock exchange.  You can also hold depositary interests (eg CDIs) or depositary shares / receipts (e.g. US ADRs) as long as the underlying share that they represent does itself meet the listed / admitted to trading criteria on a recognised stock exchanges. 

https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#qualifying-investments-for-stocks-and-shares-isas

If you're not seeing any offerings from outside the FTSE it may just be that your ISA manager (stockbroker or investment platform) doesn't offer trading on other exchanges - but it's not because HMRC don't let them, it's just because they think their customers won't give them enough extra business to justify the cost of offering it. It's cheaper for them to only deal with the London stockmarket. One of my larger holdings in individual companies is Tencent, bought on the HK exchange but held in both my ISA and SIPP.

With regard to Tencent, do you actually hold HK listed shares or do you hold ADRs/ADSs listed on NYSE?

Grenage

Thanks guys, so it is possible.  I'm currently using a Cavendish ISA through the Fidelity platform.

As my investing level is below the ISA cap it would seem to make sense to use the wrapper.  Do you have any suggested providers I might look into?

bowlhead99

george4064 said:

bowlhead99 said:

Grenage said:

While I don't have a lot invested, the overwhelming majority is in managed funds; they've done well so no complaints.  I've recently enjoyed purchasing shares within my ISA but there are no non-FTSE offerings.

I am assuming that you can't wrap shares traded on foreign exchanges within an ISA.  Is that correct?

It's not correct - as mentioned by steampowered you can hold foreign shares as long as they're officially listed on any recognised stock exchange or admitted to trading on a recognised EEA stock exchange.  You can also hold depositary interests (eg CDIs) or depositary shares / receipts (e.g. US ADRs) as long as the underlying share that they represent does itself meet the listed / admitted to trading criteria on a recognised stock exchanges. 

https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#qualifying-investments-for-stocks-and-shares-isas

If you're not seeing any offerings from outside the FTSE it may just be that your ISA manager (stockbroker or investment platform) doesn't offer trading on other exchanges - but it's not because HMRC don't let them, it's just because they think their customers won't give them enough extra business to justify the cost of offering it. It's cheaper for them to only deal with the London stockmarket. One of my larger holdings in individual companies is Tencent, bought on the HK exchange but held in both my ISA and SIPP.

With regard to Tencent, do you actually hold HK listed shares or do you hold ADRs/ADSs listed on NYSE?

I have the HK shares (ticker 0700), a few hundred in each of an ISA and SIPP.  Both of those accounts are with AJ Bell Youinvest. 

Grenage said:

As my investing level is below the ISA cap it would seem to make sense to use the wrapper.  Do you have any suggested providers I might look into?

Youinvest have generally been fine, I've had a pension with them about 8 years since they were branded Sippdeal. Their fee structure has changed a couple of times over the period but it works ok for my mix of holdings.

Before I moved the ISA to Youinvest it was with TD Direct (formerly TD Waterhouse) which got absorbed into Interactive Investor. They also allow trading in HK, most of Europe, US/Canada etc.

A good feature of II when trading on foreign markets is that if you're using non-ISA accounts they let you hold spare cash in foreign currencies to save exchanging back and forward between GBP on every purchase and sale. However, they can't offer that for ISA accounts because foreign currency cash isn't a permitted investment for ISAs. A few years ago I ended up not having much in my non-ISA account anyway, so just gave up using TD/II after their fee structure changed for the worse after the merger, and moved it to AJ Bell.

IG.com have a decent platform and competitive fees for share dealing including some foreign markets(and offer an ISA), but don't offer open-ended funds (OEICs / Unit Trusts). So I haven't tried IG's share dealing services as I prefer to have greater flexibility in what I can hold - but I do use them for spreadbets from time to time and the service is decent.

Grenage

Thank you for such an in-depth reply; I will take a look!  It's a shame you can't pay into multiple ISAs a year but stay under the cap.  It would be less faff than moving.

Albermarle

This facility is 'coming soon' with Fidelity 

CREST Depository Interests (CDIs) – these are UK securities, issued by CREST, which are designed to represent a company share traded on an overseas stock market. They offer a way for you to buy and sell a number of non-UK stocks in sterling.

Grenage

Ah thank you; perhaps I'll leave transferring until I'm ready to invest in foreign shares.  Perhaps they will have implemented CDIs by then.

I've been reading up but there's a lot to pick up, so that might be further off than I anticipate.