Stocks & shares ISA limits

MrPetrolhead

 

Stocks and shares ISA advice please. If I receive a dividend of, for example, £1000 from a company whose shares I hold in my Stocks & Shares ISA can I then use that money to buy more shares in the same company, or a different company, in addition to my £20,000 allowance? The dividend would be paid as cash into my ISA, not withdrawn and all transactions would take place in the same tax year.

Similarly with the sale of shares. If I sold shares held in my shares ISA to the value of £1000 with the proceeds being paid into the ISA, and added £20000 cash could I then buy shares to the value of £21000?

Thanks for any help.

eskbanker

Yes, the annual £20K limit relates only to money you pay in from outside the ISA wrapper, anything happening with investments or cash within that wrapper is unrelated to that contribution limit.

jimjames

Your £20k could grow to £500k inside your ISA and it would still be tax free and you can still buy whatever shares you want with it.

Maynardkj

A similar question With Stock & Share ISA I take it that dividends are paid into that ISA, However If the shares you hold in your ISA are subject to a forced sell (such as a company or more likely Utility has been taken over) would the money received for the shares be paid into the ISA and would be treated as tax free and not capitals gains?

armistice

Maynardkj said:

A similar question With Stock & Share ISA I take it that dividends are paid into that ISA, However If the shares you hold in your ISA are subject to a forced sell (such as a company or more likely Utility has been taken over) would the money received for the shares be paid into the ISA and would be treated as tax free and not capitals gains?

Yes, the money received would be paid into the ISA. 
If you choose to withdraw it, its still tax free as the 'gain' was within an ISA.

Maynardkj

Having opened a Stokes & Shares ISA last April for the first time what happens at the end of the year? Am I correct in assuming unlike Cash ISA's there is not a maturity date and its interest rate devalued, that you move the ISA to another New ISA with best interest you can find. You also get 20k worth of ISA to open each tax year.

With the Stocks & Shares ISA I presume being sort of ring fenced they just carry on and receive the Dividend rates the Company decides as either Cash or Shares which is added to the individual Stock & Shares ISA Pot.

Am I correct in assuming you can then each tax year open a new Stocks and Shares ISA up to 20k.

gravel_2

Stocks and shares ISA do not earn interest and by their nature are not fixed term products and do not expire. It's just share ownership within a tax wrapper. You can add 20k per tax year. You can open another S&S ISA, but you could also just pay 20k into your existing one.

Eco_Miser

gravel_2 said:

Stocks and shares ISA do not earn interest and by their nature are not fixed term products and do not expire. It's just share ownership within a tax wrapper. You can add 20k per tax year. You can open another S&S ISA, but you could also just pay 20k into your existing one.

Stocks and shares ISAs can hold investments other than stocks or shares, some of which do pay interest, notably gilts, and company bonds.

Maynardkj said:

Am I correct in assuming unlike Cash ISA's there is not a maturity date

Most Cash ISAs don't have a maturity date either. Some do, known as fixed term, most just continue until you choose to close them.

Linton

Maynardkj said:

Having opened a Stokes & Shares ISA last April for the first time what happens at the end of the year? Am I correct in assuming unlike Cash ISA's there is not a maturity date and its interest rate devalued, that you move the ISA to another New ISA with best interest you can find. You also get 20k worth of ISA to open each tax year.

With the Stocks & Shares ISA I presume being sort of ring fenced they just carry on and receive the Dividend rates the Company decides as either Cash or Shares which is added to the individual Stock & Shares ISA Pot.

Am I correct in assuming you can then each tax year open a new Stocks and Shares ISA up to 20k.

With an S&S ISA you dont open a new one each year.  You simply add up to £20K to the existing one.