Investment ISA Questions - Please help

ng247

Hi all, I want to open an investment ISA and choose the stocks myself but I am struggling to find any platform that allows me to do it. 
I'm not planning on doing many trades but I also have a few questions that I am struggling to find an answer for so any help would be hugely appreciated.
I know that if I setup an investment ISA with, say, £10k in it, that I can then buy shares or invest in funds and then any gains will be cap gains exempt and dividends earned will be interest free.

1. What if I invested in stocks with £5k of the 10k, do I have to invest the remainnig £5k before the end of this tax year?
2. Also, if I sell shares in this tax year, can I take some or just the gain out still tax free?  Are there any penalties at all to taking money out, be it in the current year or future years?
3. If the gains were crazy high and the £10k became £25k, say, would I have to take out the additional £5k due to the £20k limit? I don't think I would have to.
4. After the tax year ends, can I still change the trades and buy stocks etc with the 2020/21 investment ISA?  I believe I can still do what I want with it, no matter how high the fund gets.

Just trying to get my head around how this works as I cannot believe I haven't used one of these yet and none of my friends etc have told me that they are.
Thanks in advance for your help.

badger09

ng247 said:

Hi all, I want to open an investment ISA and choose the stocks myself but I am struggling to find any platform that allows me to do it. 
I'm not planning on doing many trades but I also have a few questions that I am struggling to find an answer for so any help would be hugely appreciated.
I know that if I setup an investment ISA with, say, £10k in it, that I can then buy shares or invest in funds and then any gains will be cap gains exempt and dividends earned will be interest free.

1. What if I invested in stocks with £5k of the 10k, do I have to invest the remainnig £5k before the end of this tax year?
2. Also, if I sell shares in this tax year, can I take some or just the gain out still tax free?  Are there any penalties at all to taking money out, be it in the current year or future years?
3. If the gains were crazy high and the £10k became £25k, say, would I have to take out the additional £5k due to the £20k limit? I don't think I would have to.
4. After the tax year ends, can I still change the trades and buy stocks etc with the 2020/21 investment ISA?  I believe I can still do what I want with it, no matter how high the fund gets.

Just trying to get my head around how this works as I cannot believe I haven't used one of these yet and none of my friends etc have told me that they are.
Thanks in advance for your help.

1) Most platforms will allow you to hold uninvested cash inside your S&S ISA. However, you will earn very little/no interest on it

2) You can take as much or as little cash out of your S&S ISA. There is no tax penalty whether you withdraw just the gain, or the gain plus some/all of the capital. 

3) No. The £20k limit applies only to the amount of new money you can pay into your ISA each year. Once in there, any gains are tax free

4) Once the tax year ends you can add another £20k to your S&S ISA. You can buy what you want with that £20k and also buy/sell investments bought in previous tax years. 

colsten

1. Once you deposited cash into your investment ISA, you can invest it at your leisure. As you typically don't get any interest on cash in investment ISAs, it would be in your interest to invest sooner rather than later.

2. You can remove however much you like from your ISA, whenever you like. Once the money has been withdrawn, it loses its tax exemption. What happens whilst your money is in the ISA is of no interest to the taxman.

3. the £20,000 annual limit is for deposits of new money, not the balance of your ISA.

4. You can continue to make additional deposits, within the annual ISA deposit limit (£20k atm), for as long as you like, and for as long as ISAs exist as tax-free vehicles. You can also trade (sell / buy) as you see fit. As above: what happens whilst your money is in the ISA is of no interest to the taxman.

83705628

MSE article about stocks & shares ISAs https://www.moneysavingexpert.com/savings/stocks-shares-isas/

Don't rush, chill.Why do you want to buy your own shares? You should only do that if you understand securities analysis, otherwise IMHO stick with index funds (someone's gonna criticise me for saying that). Don't do something just because your mates are and you feel like you need to catch up to the stage in life they're at. They could be in miserable loveless marriages for all you know, I don't want to catch up with that.

1. No. You can put £10k into a S&S ISA or IFISA and leave it uninvested as cash. It still keeps the ISA status. But if you're going to do that you may as well keep in a savings account. You can put £10k in, invest 5 in (whatever you want) and leave 5 as cash. Whatever you want. If you want some money to be in an ISA

 by the end of the tax year them you have to put it in an ISA, you don't need to use it to buy an investment by the end of the tax year.

2. It's all tax free. Say you bought a Tesla share on 6th April and sold on Friday (roughly, it would have cost £400 you would have sold at £1200, made £800 profit), that's all tax free in you do that within an ISA. But if you then withdraw that £1200 you sold it for from the ISA, that £1200 is no longer ISA money it's normal money and if you put it back in the ISA, it counts as part of that tax years ISA allowance.
The only exception is some cash ISAs are "flexible" but I don't think any investment ISAs, either S&S or IFISAs offer that (am I wrong here?)

3 No. You can put in £20k a year and whatever happens, happens and HMRC can't touch it. Say you bought £5k of Tesla shares on 6th April, they would roughly have tripled to £15k today, it doesn't make a difference. The £20k limit is a limit on how much money you can put into ISAs every year. If the investments you buy within your ISA account do well, it doesn't make a difference to how much you can put in.

4. Yes. Say you had bought £5k TSLA shares before this tax year, you can sell them, buy more, whatever you want this year. You aren't locked in to whatever you bought last year. It's your account, you're in control of it.

I'm just using Tesla as an example of what happens when you get crazy gains to try and answer your questions. Tesla is a very volatile stock and there's a whole thread about it in the forum. Don't buy Tesla just because some internet stranger used it to explain how ISAs work.

https://www.moneysavingexpert.com/savings/isa-guide-savings-without-tax/
https://www.gov.uk/individual-savings-accounts

coyrls

How are you struggling to find a platform?  What you want to do is standard for virtually any platform offering S&S ISAs.

83705628

coyrls said:

How are you struggling to find a platform?  What you want to do is standard for virtually any platform offering S&S ISAs.

/
I did when investing was new to me, and we a have to start somewhere 🤷‍♂️

ng247

Thanks all
Really appreciate the help

Albermarle

coyrls said:

How are you struggling to find a platform?  What you want to do is standard for virtually any platform offering S&S ISAs.

Here are a few to choose from 
https://monevator.com/compare-uk-cheapest-online-brokers/

drphila

tcallaghan93 said:

some cash ISAs are "flexible" but I don't think any investment ISAs, either S&S or IFISAs offer that (am I wrong here?)

Ratesetter's IFISA is flexible but I think the less said about that the moment,the better

grumiofoundation

A number of stocks and shares ISAs are flexible. Vanguard and Charles Stanley that I know of.

https://www.vanguardinvestor.co.uk/need-help/answer/do-you-offer-a-flexible-isa