Fractional shares ISA and HMRC

masonic

The guts of the argument from HMRC, if I understand correctly, is the following:

Qualifying investments can be found in Regulation 7 of the ISA Regulations 1998: https://www.legislation.gov.uk/uksi/1998/1870/regulation/7

Shares issued by a company are only eligible if they have been admitted for trading on a recognised stock exchange. See paragraph (2) (a) (ii). An investor cannot trade fractional shares on such an exchange, so they are in effect being traded on a private exchange run by the firm offering the ISA.

Investment trusts are excluded from (2) (a), but covered in (2) (d) with the same qualification around trading on a recognised exchange.

Units or shares in UCITS funds and other retail investment schemes are ISA eligible without the same qualification. See paragraphs (2) (f) and (g).

scoot65

My S&S ISA is largely made up of HSBC Global Strategy (balanced) Acc and small portion of Vanguard Life Strategy 60 (Acc).  Would I be affected by any new fractional shares tax legislation?   

refluxer

Damien Talks Money (YouTube) has just done a video on the subject.

https://youtu.be/ZRympCaiOJ4?si=L39swAglMFhrtS7u

masonic

scoot65 said:

My S&S ISA is largely made up of HSBC Global Strategy (balanced) Acc and small portion of Vanguard Life Strategy 60 (Acc).  Would I be affected by any new fractional shares tax legislation?   

No, because neither of those are exchange traded shares.

scoot65

masonic said:

scoot65 said:

My S&S ISA is largely made up of HSBC Global Strategy (balanced) Acc and small portion of Vanguard Life Strategy 60 (Acc).  Would I be affected by any new fractional shares tax legislation?   

No, because neither of those are exchange traded shares.

Many thanks for the reply, masonic. Much appreciated! 

kuratowski

If anyone wants to read what a tax lawyer makes of it all, some very detailed discussion posted today here

Fractional shares and ISAs – HMRC are probably wrong – Tax Policy Associates Ltd

Beddie

Of course, HMRC could look at this rule, realise it's unhelpful and pointless, then get it changed.

what planet am I on?