ii Bed & ISA

Stoodles

Can anyone talk me through the actual process to do this online?

In April I want to move investments from my Trading Account to my ISA. A few weeks ago I tried to check I was ready to do this, and I'm vanishing down a rabbit hole of secure messages. On the Cash and Transfer tab there is a Bed & ISA link, which tells me my accounts need to be linked. I can see them both on the same login, so I think they are linked, but when I enquired I was told they aren't and I can't apply by secure message for this. When I looked online, I found ii instruct you to apply by secure message, even providing a button to click to create said message.

Now I've been told I need to use the missed tax year link to revivify my ISA account if I missed a year, but my first subscription was in July 2020, and the Account Upgrades page I'm directed to is blank.

I wonder if I just need to wait for the new tax year? Could their software recognise that I have already fully subscribed for this year?

underground99

Stoodles said:

I wonder if I just need to wait for the new tax year? Could their software recognise that I have already fully subscribed for this year?

Most ISA platforms recognise how much you have subscribed for the current tax year.  If you have indeed fully subscribed for the tax year because you maxed it out last July or some point since, you are not going to be able to sell shares outside the ISA, move the proceeds of sale into the ISA, and then buy the shares back within the ISA... because the process in the middle - of 'move the proceeds of sale into the ISA' - would cause you to exceed your subscription limit for the year.

On the website, they have a pretty diagram illustrating:

How to Bed and ISA your investments

- We sell your investment holdings in your Trading Account

- We use the money to buy back the same investments within your ISA

They can't use 'the money' from the sale to buy back the same investments in the ISA if getting 'the money' into your ISA would cause you to breach the annual subscription limit of what can be put into a tax protected ISA account during a year.

If you already have spare money in your ISA doing nothing, you could use that different, spare money to buy the shares within your ISA at the same time as you sold the shares and got cash outside the ISA.  But you couldn't actually move the cash currently outside the ISA into the ISA until you have new enough allowance to do it.

If subscription allowance is the limiting factor you could wait until the new tax year on 6 April. However if you do that, and you hold off on selling the shares this tax year and leave it to next year, you won't be able to use this year's CGT exemption on any capital gains you made on the sale.  If that is likely to be a factor in your planning (i.e. because a gain on shares sold on 6 April will start to eat up the 2021/22 CGT exemption allowance which you might have preferred to preserve), you might find it useful to sell outside the ISA on 5 April and buy inside the ISA the next tax year, so it is not an exact same day bed&ISA but achieves what you need.

Stoodles

AS I said in my OP, I plan to do this in April. I was simply trying to ensure I understood the process and had everything set up as I have both a house move and surgery in the next few weeks.