Transfer shares from non-ISA to ISA sharedealing account

RMurphy195

With the changes in dividend allowance in mind (down to £1k this year, £500 next year as I recollect) I'd ideally like to transfer shares from my non-ISA sharedealing account to my Stocks and Shares ISA (Both with the same share dealing service).

However the rules are that I can't do this, I have to sell from the one, then buy in the other - I've read that this is so that HMRC can keep track of cash deposits into ISA's so you don't go over the 20k limit.

This does mean of course selling fees, buying fees, stamp duty and a loss of the sale/purchase due to price differences (and possible share price movement), which would cancel out some of the tax saving. "Bed and Breakfasting" I think is the term?

Anyone know a way around this? (Apart from buying using other savings, then hanging on until share prices go up!)

Ayr_Rage

You've hit the nail squarely on the head.

There is no way around it. 

housebuyer143

As above, this is how it's done. You will be liable for capital gains when they sell them and then rebuy them. No way around it unfortunately.

Vortigern

If your ISA provider offers a "Bed & ISA" service this should reduce the buy/sell fee and minimise the time out of market.

You would still be liable for CGT if over your allowance.

RMurphy195

Vortigern said:

If your ISA provider offers a "Bed & ISA" service this should reduce the buy/sell fee and minimise the time out of market.

You would still be liable for CGT if over your allowance.

Thanks for the tip - they do, indeed, provide such a service and waive the fee on the purchase, so I'm trying it out on one of my holdings to see the impact of not topping-up with the amount of fees (sale + stamp duty) to maintain the shareholding. Thanks again - Richard

pochisoldi

Going off at a slight tangent, I wanted to do the same move (non-ISA account with iWeb to iWeb ISA) for the same reasons. The problem I had was that I already have a S&S ISA with "current year's" money,  However I did have a cash ISA with "old" money in it, so I transferred funds from the cash ISA to the iWeb ISA. I then sold the non-ISA shares, and repurchased within the ISA using the funds that were there.

A combination of iWeb's low transaction fees, and a small drop in price in the two minutes between selling and buying meant the transaction was done at virtually zero cost.

sentiers3

Is it better to transfer shares into a stocks and shares ISA or into a cash ISA. My holding is less than 20K. I know there are always charges/fees and probably tax but which way is cheapest please. I have no experience in this market as shares were inherited.

eskbanker

sentiers3 said:

Is it better to transfer shares into a stocks and shares ISA or into a cash ISA. My holding is less than 20K. I know there are always charges/fees and probably tax but which way is cheapest please. I have no experience in this market as shares were inherited.

You'd first need to decide what you're trying to achieve, i.e. is the end game owning the shares again or do you just want the cash?

jimjames

sentiers3 said:

Is it better to transfer shares into a stocks and shares ISA or into a cash ISA. 

You can't transfer shares into an ISA especially a cash ISA, you can only transfer cash into them.