S&S to S&S ISA question

motinter

I currently have three accounts with Hargreaves Lansdown; a LISA (currently topped up and invested), a S&S account (currently investing) and a newly set up S&S ISA (with no money in it yet).

I have just learnt about the tax benefits of the S&S ISA (new to all of this).

My question(s):

1. If I plan of disposing of these shares and then reinvesting, should I sell my holding in the S&S account and rebuy my holding in the S&S ISA - at a loss, due to spreads (and potentially the share price increasing in the time it takes to move the money across the accounts?)
2. If I plan of disposing of these shares and just taking my profit, should I just leave it be? 

eskbanker

I think you should fundamentally decide whether or not you want to hold or sell these shares before choosing where, i.e. if holding long-term then Bed & ISA into the ISA is likely to be beneficial, but if selling then doing so once would seem more obvious.

Aspects like CGT liability and ISA allowances could come into play though - what's the current value of the holding and what did you pay for it?

motinter

I think I've answered my own question.  Right now, there is no CG on my profit after looking on a CG calculator.  I'm just worried that the time it takes to sell the shares and make the money available/ move it across, the share price will have moved enough to have worked against me enough.

I guess it's a case of balancing what I plan to do with the profit should it increase, and the cost of re-investing.

Cheese1990

Why sell you should be able to just transfer the holdings across to the isa account? 

motinter

Cheese1990 said:

Why sell you should be able to just transfer the holdings across to the isa account? 

• In your Fund and Share Account, sell the shares that you’d like to move. It will take 2-4 days for the money to be ready after your trade
• Move the money to your ISA
• Use the money to buy back the shares in your ISA

eskbanker

Cheese1990 said:

Why sell you should be able to just transfer the holdings across to the isa account? 

You can't directly transfer shares from outside an ISA to inside one (except certain maturing sharesave schemes), so it has to be a sale and repurchase, which does entail being out of the market for a short time.

masonic

motinter said:

• In your Fund and Share Account, sell the shares that you’d like to move. It will take 2-4 days for the money to be ready after your trade

For Bed & ISA transactions, most providers do not make you wait for settlement before subscribing the money to the ISA and repurchasing. The transactions will normally be done in quick succession so as to minimise time out of the market. I would assume HL is not lacking in this respect.

JGB1955

masonic said:

motinter said:

• In your Fund and Share Account, sell the shares that you’d like to move. It will take 2-4 days for the money to be ready after your trade

For Bed & ISA transactions, most providers do not make you wait for settlement before subscribing the money to the ISA and repurchasing. The transactions will normally be done in quick succession so as to minimise time out of the market. I would assume HL is not lacking in this respect.

I'm certainly hoping that that's the stance Ii take in April!

masonic

JGB1955 said:

masonic said:

motinter said:

• In your Fund and Share Account, sell the shares that you’d like to move. It will take 2-4 days for the money to be ready after your trade

For Bed & ISA transactions, most providers do not make you wait for settlement before subscribing the money to the ISA and repurchasing. The transactions will normally be done in quick succession so as to minimise time out of the market. I would assume HL is not lacking in this respect.

I'm certainly hoping that that's the stance Ii take in April!

I'm surprised how vague they are about the timescales in their Bed & ISA page. Interactive Investor are the only ISA provider I know that insist on waiting the full cheque clearing cycle before crediting funds transferred from another ISA provider, but hopefully their stance on this is different!

eskbanker

masonic said:

motinter said:

• In your Fund and Share Account, sell the shares that you’d like to move. It will take 2-4 days for the money to be ready after your trade

For Bed & ISA transactions, most providers do not make you wait for settlement before subscribing the money to the ISA and repurchasing. The transactions will normally be done in quick succession so as to minimise time out of the market. I would assume HL is not lacking in this respect.

They are at the moment!

https://www.hl.co.uk/investment-services/isa/bed-isa-sipp

You can use investments from your Fund and Share Account to open or top up an ISA or SIPP. This is sometimes called a Bed and ISA or Bed and SIPP.

Due to our COVID-19 service changes, we are not currently able to do this for you. Instead you can sell investments in your Fund and Share account online, and move the money to your ISA or SIPP. You can then reinvest the cash.

GeoffTF

motinter said:

Cheese1990 said:

Why sell you should be able to just transfer the holdings across to the isa account? 

• In your Fund and Share Account, sell the shares that you’d like to move. It will take 2-4 days for the money to be ready after your trade
• Move the money to your ISA
• Use the money to buy back the shares in your ISA

If you can put fresh money in the ISA, you can sell in your dealing account and buy in the ISA at almost the same time. You can then use the proceeds of the sale to further fund the ISA and repeat... That will cost more in commission, unless you can do it in one go, but you will not be out of the market for long.