Shares vs Stocks & Shares ISA + Capital Gains

wackojackouk

Evening folks. 

I inherited some shares when my mother passed away a few years back which are worth about 20k.

They currently sit with Eqi and we pay a quarterly fee (£17.49 I think) to look after them.

Recently been reading that the Capital Gains Tax is being cut to £6k next year and also some info that it might be better to have them in a stocks and shares ISA.

Just wondering if someone could give me some pointers as to the best solution of where to keep them as was thinking of selling some to pay towards a car and now a little concerned about Capital Gains tax

If we did go down the route of putting them into Stocks and Shares ISA what’s the best process for doing this and can we simply buy the same shares again? 

Thanks for reading 

eskbanker

wackojackouk said:

Just wondering if someone could give me some pointers as to the best solution of where to keep them as was thinking of selling some to pay towards a car and now a little concerned about Capital Gains tax

If we did go down the route of putting them into Stocks and Shares ISA what’s the best process for doing this and can we simply buy the same shares again?

The process of getting shares into an ISA is basically: sell them, move cash proceeds into the ISA and then repurchase the shares once in there, a process bundled together as 'Bed & ISA' by many providers if you hold both an ISA and a general investment account with them.  You can buy the same shares again if you wish, although unless this is purely for sentimental reasons you might wish to consider whether you'd buy those particular investments if you were starting with a pot of cash (as you effectively will be during the process) - holding £20K worth of an individual equity is pretty high risk unless it's a small part of an already well-diversified portfolio.

Liquidating the shares to go into the ISA would count as a disposal for CGT purposes, so you'd be liable for tax on their gains since you acquired them, less the annual allowance.

MX5huggy

Sell today so you can use the £12300 CGT allowance that runs out tomorrow. 

£17 per quarter is a very high fee. Try X-O (Jarvis) they would charge £6 to buy the shares in a GIA and nothing else. 

wmb194

What's your current gain? The reduction to £6k is literally this week... Sell today or tomorrow to take advantage of the 2022/23 £12.3k CGT allowance.

jaypers

MX5huggy said:

Sell today so you can use the £12300 CGT allowance that runs out tomorrow. 

£17 per quarter is a very high fee. Try X-O (Jarvis) they would charge £6 to buy the shares in a GIA and nothing else. 

Not sure about that as settlement date would be the 6th from today so probably too late to take advantage of this years CGT allowance. 

ColdIron

It's the date of disposal that counts, not the settlement date

https://community.hmrc.gov.uk/customerforums/cgt/a9d21cf7-f8be-ec11-bea1-00155d975227

wackojackouk

Morning guys, thanks for the advice. I am definitely leaned towards selling of some of the shares in that account.

CGT wise, I acquired them through inheritence (no tax IIRC) and they were worth around £12k at the time and now around £20k. Had a look at the gov site and a bit confused as to whether or not my gain is e.g £8k or 20k. I guess this influences what I sell.

Eqi (Equinity) charge £15.99 (might be £17.99 now) a quarter but if you sell or buy @£11.99 each - that is taken off the fee.

Would it make sense to do a Bed & ISA and just stay with Eqi (in the meantime) or sell the shares today and open a new Stocks and Shares ISA with Jarvis (or Trading212) and invest the money with those. Is it possible to do a Bed and ISA from Eqi to Jarvis for example?

Also if I wanted to keep a particular share holding (e.g Apple/Google etc) can you instruct them in the new provider to purchase THOSE shares?

Thanks so much for your advice so far - very helpful

steampowered

These days it is viewed as high risk to have a significant amount of money invested in a single share. A single company could do spectacularly well or it could become insolvent meaning you lose it all. Most people like to spread their risk by investing into a fund.

Personally I would do the following:

• Sell all of the shares.
• Open a new S&S ISA with a different provider (£17.99 a quarter is expensive).
• Invest the money into an investment fund which spreads your money across lots of different shares. Vanguard funds are a good starting point.

That way you'll be more diversified, face lower quarterly costs, and any gains you make in the ISA will be tax free.

With the reduced CGT allowance you could avoid CGT by selling shares up to your CGT allowance in one tax year, and the remainder in future tax years.

eskbanker

wackojackouk said:

CGT wise, I acquired them through inheritence (no tax IIRC) and they were worth around £12k at the time and now around £20k. Had a look at the gov site and a bit confused as to whether or not my gain is e.g £8k or 20k. I guess this influences what I sell.

As highlighted earlier:

eskbanker said:
Liquidating the shares to go into the ISA would count as a disposal for CGT purposes, so you'd be liable for tax on their gains since you acquired them, less the annual allowance.

i.e. if you acquired them when valued at £12K and they're now £20K, your gain is £8K.

wackojackouk said:

Would it make sense to do a Bed & ISA and just stay with Eqi (in the meantime) or sell the shares today and open a new Stocks and Shares ISA with Jarvis (or Trading212) and invest the money with those. Is it possible to do a Bed and ISA from Eqi to Jarvis for example?

It probably just makes sense to sell today - Bed & ISA is just a label but does only apply to selling and repurchasing the same holdings with the same provider, so if you just concentrate on selling for now, you can decide at your leisure how much you want to spend on the car, plus which platform you'd want to use in future for the ISA and which investments you'd buy.

wackojackouk said:

Also if I wanted to keep a particular share holding (e.g Apple/Google etc) can you instruct them in the new provider to purchase THOSE shares?

There are basically two alternatives:

1. Bed & ISA - as above, this involves the same provider selling and repurchasing exactly the same investments to get them within the ISA.
2. If you sell them on a standalone basis, you can then do what you like with the proceeds.

wmb194

Equiniti's rubbish, I would avoid it. Trading212 currently has a 1% cashback offer on new Isa accounts although note the cashback has a 12 month lock-up.

https://www.trading212.com/isa

bobthebleeper

Thanks to ColdIron for information that date of disposal, not settlement date, counts when assigning capital gains to this year's CGT allowance. I'm thinking of selling funds via interactive investor for this reason. Does anyone know when/how the date of disposal is calculated? There seem to be a few stages between clicking the order:

Day 0	Order submitted	Pending
Day 1	Order sent to and received by Fund Manager	Pending
Day 2	Detail received from fund Manager by ii and trade execution details updated	Executed
Day 5/6	Settlement date of trade - funds wil be debited (for a buy trade) or credited (for a sell trade) to account.	Executed