Invest before or after 5th April?

Eco_Miser

whatstheplan said:

Thanks for the replies.  Can I do this?

1. Put up to £20k into a cash ISA by 5th April (this tax year.)
2. Transfer that £20k into a stocks and shares from 6th April  (next tax year.)
3. Invest up to £20k of additional money into the stocks and shares ISA next tax year?

So purely as an example can I do this?

30/03/2021: Put £20k into cash ISA.
08/04/2021: Transfer that £20k into a stocks and shares ISA.
08/08/2021: Invest additional £20k into the stocks and shares ISA (i.e. £40k in total but £20k is transferred from the previous tax year.)

Assumes the ISAs are flexible.

yes, and as listed does not require ISAs to be flexible.

The second £20k can go in, in a lump or in bits, any time between the 6th April 2021 and 5th April 2022 inclusive.

The transfer from cash to S&S can happen any time (it takes weeks to do the transfer), but there's no need to use a cash ISA at all, and opening an S&S ISA is likely to be easier, they expect a rush at this time of year. Just Open and Fund an S&S ISA now, and do the investment after Easter.

TheAble

I don't see the point of putting it into a cash ISA now and then transferring later. Why not just put it into s&s ISA now?

colsten

whatstheplan said:

Thanks for the replies.  Can I do this?

1. Put up to £20k into a cash ISA by 5th April (this tax year.)
2. Transfer that £20k into a stocks and shares from 6th April  (next tax year.)
3. Invest up to £20k of additional money into the stocks and shares ISA next tax year?

So purely as an example can I do this?

30/03/2021: Put £20k into cash ISA.
08/04/2021: Transfer that £20k into a stocks and shares ISA.
08/08/2021: Invest additional £20k into the stocks and shares ISA (i.e. £40k in total but £20k is transferred from the previous tax year.)

Assumes the ISAs are flexible.

Yes you can do this but put your skates on if you want to have the first deposit processed by the 5th, for reasons already stated.

Your ISAs do not have to be flexible for your plan. A flexible ISA is one that lets you, in the same tax year,  make deposits withdrawals as well as re-deposits. This is not what your plan is.

What you do want is that the S&S ISA you open will allow transfers in. I don't know of any S&S ISA that doesn't, but just make doubly sure that it does.

Also, you must not make the transfer from the cash ISA to the S&S ISA yourself. If you did it yourself, you'd destroy your plan as your money from the cash ISA would have lost the ISA wrapper. Ask the S&S ISA provider to make the transfer.

whatstheplan

TheAble said:

I don't see the point of putting it into a cash ISA now and then transferring later. Why not just put it into s&s ISA now?

Tbh that's what I've done.  My investment journey has begun ... well ... sort of!  I've put £20k into a S&S ISA so will be able to add more as of next week.  I'm sticking with Vanguard at least for now.

Alexland

whatstheplan said:

Tbh that's what I've done.  My investment journey has begun ... well ... sort of!  I've put £20k into a S&S ISA so will be able to add more as of next week.  I'm sticking with Vanguard at least for now.

Yes at the current valuation Vanguard Investor at 0.15% is OK but if you are going to keep doing large lump sums you might decide it is worth stumping up the £100 setup fee to open an iWeb account and paying just £5/trade even if you continue investing in Vanguard funds (preferably accumulating ones to avoid dividend reinvestment trades).

whatstheplan

Alexland said:

whatstheplan said:

Tbh that's what I've done.  My investment journey has begun ... well ... sort of!  I've put £20k into a S&S ISA so will be able to add more as of next week.  I'm sticking with Vanguard at least for now.

Yes at the current valuation Vanguard Investor at 0.15% is OK but if you are going to keep doing large lump sums you might decide it is worth stumping up the £100 setup fee to open an iWeb account and paying just £5/trade even if you continue investing in Vanguard funds (preferably accumulating ones to avoid dividend reinvestment trades).

Tbh my financial ability to invest is limited.  I've put the £20k in now, later this year another £20k will be invested and that might be it, at least for 2-3 years.

jimjames

TheAble said:

I don't see the point of putting it into a cash ISA now and then transferring later. Why not just put it into s&s ISA now?

Maybe the OP doesn't know which provider to use as they've not chosen investments yet. I was working on the basis that having the allowance used for the year was worthwhile. 
If the OP knows which platform they are going with then yes I agree just use S&S ISA now.