Freetrade - ISA v's Shares

spdavies

Hey all - I'm having an explore of the Freetrade app and wanted some advice on a few basics. (P.s. i'm only investing a few £100) so nothing major.

So i have two options when investing:

1) buy shares/stocks etc in a standard way at the price offered with no obvious fees

2) invest via a stocks ISA for a monthly fee of £3 per month.

My initial view was that I'll just buy a few hundred £ worth of shares to make a small gain (or loss) whilst i learn the ropes a little. My understanding is that i can earn up to 12.5k in gains and dividends before i have to worry about capital gains tax (do i have this right?) - I'm clearly way below that so my view was that there is little value in me paying the monthly £3 fee for the ISA.

Is my logic sound? or am i missing something obvious?

Go easy on me - I've still got my learner plates on here!!

(P.S - my only other savings to date are tied up in a company pension scheme, plus a company share scheme).

Regards,

masonic

Yes for those sums it is not worth paying the extra for an ISA, although remember that if you complete a tax return you will need to know and declare any dividends (capital gains only need to be declared if you exceed certain thresholds for disposals and gains, but you should keep records just in case). I don't know if Freetrade will produce a tax statement at the end of each tax year.

Trading212 is cheaper if you want an ISA (no ISA fee).

spdavies

Thanks Masonic. I do have to complete a tax return at the moment (although i'm hoping not for long as I've stopped claiming Child Benefit). My assumption was that i wouldn't need to declare anything as i'll be well below the 12,570 threshold - is that correct?

masonic

spdavies said:

Thanks Masonic. I do have to complete a tax return at the moment (although i'm hoping not for long as I've stopped claiming Child Benefit). My assumption was that i wouldn't need to declare anything as i'll be well below the 12,570 threshold - is that correct?

You won't need to declare capital gains if your gains and overall sales are below the respective thresholds (which they will be based on what you've stated)

You will need to declare any dividends you receive, since these are used in the calculation of your total income for the year (just as you do for interest on savings accounts, even if below the personal savings allowance).

spdavies

ok - i didn't know that thanks!