Next Years ISA

Nam3Unavailable

I currently have a vanguard ISA that I use to invest in ETF's as well as an account with eToro which I use to purchase individual shares. I don’t currently possess enough individual shares to be concerned with tax due when selling as I’m sure that his would fall within the allowances for CGT and Dividend allowance, however I’m considering using a new platform for the new tax year so that I can purchase both funds and single shares In the same ISA wrapper.  I don’t anticipate investing more than 20k next year so I think this is a sensible option, just wanted to check I’m not missing anything?

Alexland

If your Vanguard ISA is getting big enough it might be cheaper to transfer from a percentage based platform to a fixed charge platform such as iWeb (part of Halifax) who charge £5 per trade and offer lots of choice of funds and ETFs. However if you are going to do this act quickly as the opening fee is about to increase from £25 to £100 in the next a few days.

https://www.iweb-sharedealing.co.uk/

Personally I wouldn't trust eToro or take the higher risks associated with individual company shares. Try and think of your investments as a structured portfolio rather than a shedload of random bets.

Also consider if you are making the most of your Pension and Lifetime ISA options as appropriate and just to be sure you know the new tax year starts 6th April incase you are confusing it with the new year about to start.

jimjames

I use iWeb for my ISAs and have no issues at all with them. One thing to bear in mind for CGT is that you may have no issues with the current levels but if the allowance is cut or changed then that may impact. I've moved all my shares held outside an ISA into one to avoid that problem in future.

Nam3Unavailable

jimjames said:

I use iWeb for my ISAs and have no issues at all with them. One thing to bear in mind for CGT is that you may have no issues with the current levels but if the allowance is cut or changed then that may impact. I've moved all my shares held outside an ISA into one to avoid that problem in future.

So did you sell the shares and then re-buy within an ISA? (Assume at different prices?)

Nam3Unavailable

With regards to CGT, have I understood this correctly - CGT is only from the sale of assets, so the tax taken from my salary is different?

bowlhead99

Nam3Unavailable said:

jimjames said:

I use iWeb for my ISAs and have no issues at all with them. One thing to bear in mind for CGT is that you may have no issues with the current levels but if the allowance is cut or changed then that may impact. I've moved all my shares held outside an ISA into one to avoid that problem in future.

So did you sell the shares and then re-buy within an ISA? (Assume at different prices?)

Yes, you can't literally 'move' your shares from outside an ISA to inside an ISA so the process is to sell and then use the proceeds to re-buy inside the ISA where HMRC are not interested in any transactions you do or profits / income you make.

If you already loaded your ISA with cash from your bank account before doing your 'outside the ISA' sale, you could place the buy and sell orders at the same time and get more or less the same price (though there may be a small spread between buying and selling prices, and stamp duty if it's a UK company share) and then later top up your bank account with the sales proceeds when they come through.

If you need to wait for the sale proceeds to clear and then get back to your bank account before you can afford to fund the ISA to make the purchases, there is more likely to be a difference in price.  Some providers that offer both non-ISA and ISA accounts, if you have both types of account, offer a 'bed and ISA' service where you can ask them to execute a sale from one account, sweep the money to the ISA and do the repurchase there, all for one fee (i.e. no need to pay separate selling and buying fees). Just mentioned for completeness in case other readers are interested, but not really relevant to you selling at eToro and buying with a conventional ISA provider.

Nam3Unavailable said:

With regards to CGT, have I understood this correctly - CGT is only from the sale of assets, so the tax taken from my salary is different?

Yes, Captial Gains Tax on the profits between an asset sale price and the asset purchase cost is a separate regime from the Income Tax that you pay on your salary or dividends. 

It has a separate annual exempt amount (i.e. first £12300 of gains net of losses are exempt, which is different to the £12500 personal allowance you get on your income tax), and has its own tax rates if you do have anything taxable above the exemption.

jimjames

Nam3Unavailable said:

jimjames said:

I use iWeb for my ISAs and have no issues at all with them. One thing to bear in mind for CGT is that you may have no issues with the current levels but if the allowance is cut or changed then that may impact. I've moved all my shares held outside an ISA into one to avoid that problem in future.

So did you sell the shares and then re-buy within an ISA? (Assume at different prices?)

Yes I did. Reply from Bowlhead99 gives far more detail but depending on the share the difference between buy & sell price might be negligible or significant. For example with SMT it is 1217p/1219p so 2p on £12.17 share and under 0.2% spread. For IOG it is 12.5p/13.5p so 1p on 12.5p and nearly 10%

Nam3Unavailable

Thanks for all the responses so far, I have been looking at the various platforms and although I’m sure it will be frowned upon I am leaning towards opening an ISA account with a platform such as Trading 212. My reasons are that I won’t be putting a lot of money into this (possibly won’t even fill the isa allowance) and I will be mainly looking to purchase only 1 or 2 individual companies. I will keep my Vanguard ISA and hopefully fill it before this tax year ends (but I still need to find circa 13k to do that).

bowlhead99

Nam3Unavailable said:

Thanks for all the responses so far, I have been looking at the various platforms and although I’m sure it will be frowned upon I am leaning towards opening an ISA account with a platform such as Trading 212. My reasons are that I won’t be putting a lot of money into this (possibly won’t even fill the isa allowance) and I will be mainly looking to purchase only 1 or 2 individual companies. I will keep my Vanguard ISA and hopefully fill it before this tax year ends (but I still need to find circa 13k to do that).

If all you're doing is buying small amounts of a couple of individual companies there's probably no need to frown too much at T212. 

However as you noted in your OP, you were originally looking to invest in both funds and individual companies during the next tax year. T212 don't offer open-ended funds, and you can't contribute to more than one ISA in the same tax year, so you if you wanted to use collective fund-type investments over the next tax year you would be restricted to using whatever ETFs or investment trusts are available through T212, which is a smaller selection than you would find at the mainstream investment platforms which do carry open-ended funds.

Nam3Unavailable

bowlhead99 said:

However as you noted in your OP, you were originally looking to invest in both funds and individual companies during the next tax year. T212 don't offer open-ended funds, and you can't contribute to more than one ISA in the same tax year, so you if you wanted to use collective fund-type investments over the next tax year you would be restricted to using whatever ETFs or investment trusts are available through T212, which is a smaller selection than you would find at the mainstream investment platforms which do carry open-ended funds.

I’ve had a quick look and I think T212 offer the Vanguard range of funds that I’m interested in so hopefully that will give me the options I want for the next tax year.

Alexland

Nam3Unavailable said:

I’ve had a quick look and I think T212 offer the Vanguard range of funds that I’m interested in so hopefully that will give me the options I want for the next tax year.

They probably have some Vanguard ETFs but as above they don't offer traditional funds.