How to move shares from one broker to another?

tallac

I have about £43k of shares in one broker's fund and share account (i.e. it is not an ISA wrapper). I wish to move the shares into Trading 212 into their ISA wrapper.

What is the best way to do this without incurring tax liability? As I understand it (although I could be wrong), there is a certain yearly allowance of profit from selling shares which is tax free. So, over the course of some years, could I max out this allowance moving it into my ISA wrapper (which itself will also have a yearly allowance)?

El_Torro

Your annual Capital Gains allowance is £3,000. You can only move £20k per year into an ISA anyway, so if you want to keep the money in your name it will take a couple of years to put it all in an ISA. 

tallac

Wow, only £3k capital gains allowance per year? That's much less than I thought.

Is there any other way of doing it? Just out of interest, I don't want to change which companies I have shares for or the quantity, I just want to change the broker who manages this. Is there another way to do it?

EthicsGradient

tallac said:

Wow, only £3k capital gains allowance per year? That's much less than I thought.

Is there any other way of doing it? Just out of interest, I don't want to change which companies I have shares for or the quantity, I just want to change the broker who manages this. Is there another way to do it?

It used to be over £12k per year, but it was cut to £6k last year, and £3k from now on

You are not "just changing the broker", you are investing in an ISA, and that must be done in cash. So yes, you have to sell the shares outside the wrapper, calculating how much, if any, CGT that attracts, and then put the money into the ISA, and repurchase your shares.

Work out the total net capital gain the shares have now, and then work out an order to move them in (remembering that if some are sitting on a loss, that offsets a larger gain. So you can sell Share A with a gain of £5000, and Share B with a loss of £2000, and it fits your yearly allowance of £3000). On the whole, it's worth doing this early in a tax year, ie now. For instance, your £43k might have a current gain of £10k; but it may grow by another £2k before the end of this tax year, so get some of that sheltered in the ISA as soon as possible.

One other consideration might be any dividends you're receiving; from this year, the allowance for dividends before you pay tax on them (outside an ISA) is just £500. Above that, a basic rate taxpayer pays 8.75% tax on dividends, and a higher rate payer 33.75%. Which could make a complicated decision, balancing dividends, capital gains, and the ISA allowance.

gt94sss2

If you just wanted to transfer your shares to Trading 212 without selling them, you can do so for free within their app (T212 are gradually rolling out their "portfolio transfer" feature to their customs). Your existing broker may charge a exit/transfer fee.

However, HMRC rules state it's not possible to transfer shares directly into an ISA. You have to sell them and rebuy then within a ISA.

Beddie

tallac said:

Wow, only £3k capital gains allowance per year? That's much less than I thought.

Is there any other way of doing it? Just out of interest, I don't want to change which companies I have shares for or the quantity, I just want to change the broker who manages this. Is there another way to do it?

You can thank the so-called Conservative Chancellor Mr. Jeremy "Hunt" for the big cut to CGT allowances.