Learning about Isa stocks

ab713

Hi,

I understand my invesment can increase or decrease. Also, I understand we can have total of £20,000 invested in one year combined for all different types of Isa (Stocks isa, Cash isa, Lisa).

I don't have cash isa and Lisa. 

I downloaded Trading212 app as its seems very easy to use and no commission. Moreover, I can invest in the US stocks as well. (Happy to know your thoughts on some other app for stocks which is free , no commission and no annual fees). 

I would like to invest using stocks Isa and i am happy to invest 20,000 for this financial year. 
I would like to know the following:
1. Lets say I sell the stocks and buy it again like a day trader. How will the tax calculated for such scenario? 
2. Do i need to fill self assessment if my profit is less than standard allowance of £12,000 for this financial year? So lets assume, I invested £20,000  and by end of March my profit is £31,000. Will I still need to fill self assessement? 

NottinghamKnight

The whole point of investing in an isa is that there is no tax. However investing in individual shares is very risky and many small investors will lose money doing that, do some reading and stick to funds initially.

tacpot12

No CGT and no income tax if the shares are held in an ISA, so no need to start completing a self-assessment tax return. 
Note that with an ISA, you can only invest £20K per year, as long as all this money stays in the ISA, you can sell and buy shares as often as you like. What you can't do is take money out of the ISA and put it back into the ISA if this means you will have put more than £20K into the ISA in the tax year. 

Good advice from NottinghamKnight above.  

dunstonh

I downloaded Trading212 app as its seems very easy to use and no commission. Moreover, I can invest in the US stocks as well. (Happy to know your thoughts on some other app for stocks which is free , no commission and no annual fees). 

When you reached 17, did you go out and buy a formula one car to drive before you had even passed your test?

That is effectively what you are doing with investing.

1. Lets say I sell the stocks and buy it again like a day trader. How will the tax calculated for such scenario? 

ISAs are tax free.  However, you would need gains to pay tax if it was outside the ISA and if day trading is your plan, I wouldn't worry about gains.

ab713

tacpot12 said:

No CGT and no income tax if the shares are held in an ISA, so no need to start completing a self-assessment tax return. 
Note that with an ISA, you can only invest £20K per year, as long as all this money stays in the ISA, you can sell and buy shares as often as you like. What you can't do is take money out of the ISA and put it back into the ISA if this means you will have put more than £20K into the ISA in the tax year. 

Good advice from NottinghamKnight above.  

Ok. Thank you. One last question: lets say I invest £10,000 on 21st Oct and I make a gain of £500 by 31st Nov. I sell the stocks and now my isa account will have £10,500, 
1. Can I withdraw entire £10,500 from Isa account to current account? No tax and no self assessment?
2. In December, I decide to invest again in Isa stocks: so my remaining limit will be £9500 for this financial year?  Or remaining limit will be £10,000.

PS: just asking the question, not going to invest so soon. I am only researching for the moment. 

csgohan4

do some research and get a strategy, everyone on here has different opinions and therefore strategy, but we can generally guide 
https://monevator.com/category/investing/passive-investing-investing/

is a good start

Don't run before you can walk

Suggest a cheap global index tracker and leave it there for 10 years +, that is what true investing involves, if you were hoping to pop some cash in and get some returns in a few days/month, might as well put it on the horses. 

bowlhead99

ab713 said:

tacpot12 said:

No CGT and no income tax if the shares are held in an ISA, so no need to start completing a self-assessment tax return. 
Note that with an ISA, you can only invest £20K per year, as long as all this money stays in the ISA, you can sell and buy shares as often as you like. What you can't do is take money out of the ISA and put it back into the ISA if this means you will have put more than £20K into the ISA in the tax year. 

Good advice from NottinghamKnight above.  

Ok. Thank you. One last question: lets say I invest £10,000 on 21st Oct and I make a gain of £500 by 31st Nov. I sell the stocks and now my isa account will have £10,500, 
1. Can I withdraw entire £10,500 from Isa account to current account? No tax and no self assessment?

1. Correct

2. In December, I decide to invest again in Isa stocks: so my remaining limit will be £9500 for this financial year?  Or remaining limit will be £10,000.

2. As you have previously contributed £10,000 to an ISA out of the annual £20,000 limit, earlier in the tax year - your remaining limit is £10,000.

If you were likely to be investing a second time in the same tax year, it would have been smarter to not withdraw all the money from the ISA back to your bank account at step 1. Because, if the money was staying in the ISA, instead of being taken back to your bank account, you could have re-invested it into more investments within the ISA, without needing to contribute any money from your bank account back into your ISA and so you would not use up any further ISA subscription allowance. The subscription allowance is only moved up when money moves from your bank account outside an ISA, into an ISA.

AnotherJoe

ab713 said:

tacpot12 said:

No CGT and no income tax if the shares are held in an ISA, so no need to start completing a self-assessment tax return. 
Note that with an ISA, you can only invest £20K per year, as long as all this money stays in the ISA, you can sell and buy shares as often as you like. What you can't do is take money out of the ISA and put it back into the ISA if this means you will have put more than £20K into the ISA in the tax year. 

Good advice from NottinghamKnight above.  

Ok. Thank you. One last question: lets say I invest £10,000 on 21st Oct and I make a gain of £500 by 31st Nov. I sell the stocks and now my isa account will have £10,500, 
1. Can I withdraw entire £10,500 from Isa account to current account? No tax and no self assessment?
2. In December, I decide to invest again in Isa stocks: so my remaining limit will be £9500 for this financial year?  Or remaining limit will be £10,000.

PS: just asking the question, not going to invest so soon. I am only researching for the moment. 

Why would you do that???

These questions show that you shouldn't be contemplating trading yet, but to answer your Q, you can add in £20k to an ISA each FY year. What you take out is irrelevant and doesn't affect how much you can add in.

Old_Lifer

You  are focusing on profit and how much you can make   but what happens if the shares fall in value.   How would you feel if your investment of £20,000 suddenly fell in value  and  was worth only £10,000  or even less ?    How would you handle that ?   Would you panic or wait in hope  for a recovery ?   Would that happen in weeks, months, years  or never ?