Iweb Bed and ISA ?

metrobus

I intend to transfer £20k from my Iweb s&s account to my Iweb ISA account In April, selling Vanguard Lifestratergy 60 and re purchasing it into the ISA

Ive read its best to phone iweb to get this done, would the selling and buying price be the same or would the sale be done one day and the purchase the next?

I know I could deposit £20k in cash and instruct the sale and purchase myself.

What are the pros and cons and charges for each scenario please.

scoot65

Good post!

I'm thinking about doing the same for this next financial year and I'll be interested in seeing the replies.

Notepad_Phil

I'm not sure that you can actually use IWebs Bed and ISA phone option on funds - though you might want to check with them as it wouldn't be the first time that help text doesn't tell the full story, but I think that it's because the HMRC insist that you actually sell your investments and then repurchase them at some future date (even if only seconds), which can obviously be easily done with stocks but not with funds which are future priced and only bought/sold once per day.

The way I would Bed and ISA funds on iweb is to put the cash e.g. £5000 into the ISA and then at the same time sell £5000 of the non-ISA fund and buy £5000 of the same fund in the ISA account - this means (provided they have the same buy/sell price) that you'll get the same number of units. It gets more difficult if you were planning to sell the entirety of the fund as you don't know until the sale goes through on how much you'd need to buy in the ISA, so if you still try to do it then you hope that it's not a day when there's a big movement in prices.

jimjames

metrobus said:

I intend to transfer £20k from my Iweb s&s account to my Iweb ISA account In April, selling Vanguard Lifestratergy 60 and re purchasing it into the ISA

Ive read its best to phone iweb to get this done, would the selling and buying price be the same or would the sale be done one day and the purchase the next?

I know I could deposit £20k in cash and instruct the sale and purchase myself.

What are the pros and cons and charges for each scenario please.

Putting cash into ISA and buying - pros - you can sell and buy at the same time. Cons - you need an additional £20k to do it and settlement amount might be slightly different to the amount you put in ISA.

Selling first and transferring - pros - you don't need extra cash. Cons - you will be out of the market during the settlement and transfer period. 

AFAIK it's not a case of best to phone iWeb, I think you can only do it by phoning as there isn't a facility to move cash between accounts.

Notepad_Phil said:

I'm not sure that you can actually use the Bed and ISA option on funds. I think that it's because the HMRC insist that you actually sell your investments and then repurchase them at some future date (even if only seconds), which can obviously be easily done with stocks but not with funds which are future priced and only bought/sold once per day..

No issue with bed & ISA with funds, you have to sell, you cannot move shares/funds into an ISA, you can only add cash

Notepad_Phil

jimjames said:

AFAIK it's not a case of best to phone iWeb, I think you can only do it by phoning as there isn't a facility to move cash between accounts.

I'm not sure how long it's been there, but the help text does seem to indicate there's something now: go to: https://www.iweb-sharedealing.co.uk/help-and-guidance/existing-customer/managing-your-isa.html and search for Moving cash from a IWeb Share Dealing Account into a IWeb Stocks and Shares ISA for a form to request the movement.

jimjames said:

No issue with bed & ISA with funds, you have to sell, you cannot move shares/funds into an ISA, you can only add cash

A more general Bed and ISA certainly will work with funds, but it was the Bed and ISA phone option with IWeb that I was talking about in reply to the question, or are you saying that IWeb will do that phone option with funds as well

dales1

My ISA is with Halifax rather than iweb, but you'd expect a similar approach.

With Hx phone service you'd be out of the market for 2 working days and effectively pay 2 full dealing fees, see -

https://www.halifax.co.uk/investing/help-and-guidance/existing-customer/understanding-an-isa.html#moving

(They won't allow money to be transferred to the ISA until the proceeds arrive at T+2).

To avoid this, I fund my ISA with cash from savings (or withdraw from PBs for a month).

Then, on Hx Reduced Commission Day I can buy and sell in the ISA and the GIA respectively for 2 low fees plus a small spread.and avoid any time out of the market. Then repay myself out of the GIA sale proceeds.

It doesn't matter whether prices are high or low on RDC day, because it's almost neutral when both buying and selling.

Rollinghome

Of course, being out of the market for a few days doesn't always work to your disadvantage.  Long-term, markets do rise (we hope) but it's almost an even-chance that prices will work in your favour as often as against you, though it sometimes doesn't seem like that. 

I either take my luck as it comes, or treat the process as an ultra-short trade and try to time it as best I can to come out a few pennies ahead.  Some I win, some I lose, just as with the investments and switches I choose, but I don't lose sleep over either (mostly).

jimjames

Notepad_Phil said:

jimjames said:

No issue with bed & ISA with funds, you have to sell, you cannot move shares/funds into an ISA, you can only add cash

A more general Bed and ISA certainly will work with funds, but it was the Bed and ISA phone option with IWeb that I was talking about in reply to the question, or are you saying that IWeb will do that phone option with funds as well

I've not done it personally as I always pre-fund from savings but it should make no difference whether the proceeds have come from shares or funds

metrobus

I think I’ll pre fund, but not having £20k I’ll go £10k x 2 , yes It will cost me an extra £5 buying and selling fee but probably worth it not having to release funds from other investments to fund the buying .