Is it worth withdrawing existing investment accounts and reinvesting into ISAs?

DhwERbf689

In the last few years I set up a few different investment accounts on different platforms and invested a relatively small amount into each...

• A Nutmeg Stocks & Share account.
• LoanPad P2P Lending account.
• Kufflink P2P Lending account.
• Crowdproperty P2P Lending account.

But even though all these platforms offer ISA account options I just invested money into regular / non ISA pots.

I'm thinking now I would be better to have them in ISAs in order to get the tax free benefit.

None seem to offer the ability to just instantly transfer from the regular accounts into an ISA so I'd have to cash them all out, withdraw the money to my bank, put the money back into each platform and re-invest it into their ISA accounts which will result in some fees, taxes on gains potentially, and in some cases there may be "early" cash out fees on the P2P lending platforms as they are fixed terms and I'd be terminating early.

Two questions...

1) Obviously without knowing all the fees etc it's hard to advise to my specific situation BUT in general would I be better getting these out of the regular investment pots and into ISA accounts at some point ASAP?

2) Due to the new ISA rules I could have an ISA account on all 3 of the P2P lending platforms as long as the overall amount among all ISA accounts (P2P and Stocks & Shares) is under the £20k limit, right?

Love to know your thoughts please....

Thanks

badger09

DhwERbf689 said:

In the last few years I set up a few different investment accounts on different platforms and invested a relatively small amount into each...

• A Nutmeg Stocks & Share account.
• LoanPad P2P Lending account.
• Kufflink P2P Lending account.
• Crowdproperty P2P Lending account.

But even though all these platforms offer ISA account options I just invested money into regular / non ISA pots.

I'm thinking now I would be better to have them in ISAs in order to get the tax free benefit.

None seem to offer the ability to just instantly transfer from the regular accounts into an ISA so I'd have to cash them all out, withdraw the money to my bank, put the money back into each platform and re-invest it into their ISA accounts which will result in some fees, taxes on gains potentially, and in some cases there may be "early" cash out fees on the P2P lending platforms as they are fixed terms and I'd be terminating early.

Two questions...

1) Obviously without knowing all the fees etc it's hard to advise to my specific situation BUT in general would I be better getting these out of the regular investment pots and into ISA accounts at some point ASAP?

2) Due to the new ISA rules I could have an ISA account on all 3 of the P2P lending platforms as long as the overall amount among all ISA accounts (P2P and Stocks & Shares) is under the £20k limit, right?

Love to know your thoughts please....

Thanks

Is your interest from the 3 P2P accounts, when added to any other non ISA interest, likely to exceed your PSA? 

How much, approx, do you have invested in the P2P accounts?

Under the new rules (from 6/4/24) you could have an ISA on each of the 3 P2P platforms and pay into all 3 this year. You can pay up to £20k in total, this tax year, into all your ISAs. 

eskbanker

DhwERbf689 said:

None seem to offer the ability to just instantly transfer from the regular accounts into an ISA so I'd have to cash them all out, withdraw the money to my bank, put the money back into each platform and re-invest it into their ISA accounts which will result in some fees, taxes on gains potentially, and in some cases there may be "early" cash out fees on the P2P lending platforms as they are fixed terms and I'd be terminating early.

Outside of maturing sharesave schemes, you can only move cash into an ISA so yes, doing so would entail liquidating these assets, and therefore you'd need to quantify the financial consequences, in terms of CGT, early termination fees, etc, and compare these with any benefits from using ISAs, in terms of eliminating subsequent taxation.  In other words, it doesn't make sense for anyone to consider whether such a move is sensible "in general", as it's inherently dependent on the numbers....

boingy

In general, yes, get it all in an ISA. No need to use more than one provider unless you particularly want to. For more specific advice, give us the numbers.

One thing you might want to do is open an IWeb account before their free offer ends at the end of June , even if you don't use it. No ongoing fees for ISAs, just £5 each time you trade. If you plan to buy and hold it's a great account. Not so good if you want to drip feed money into it.

Sea_Shell

I'm pretty sure with Loanpad, that they will transfer up to £20k into an ISA for you if you ring them.   Even if you're in the 60 day notice account.  

AIUI, yes, you can now have as many ISA accounts as you want, of any type, but you need to ensure that you don't go over your £20k limit.

Albermarle

boingy said:

In general, yes, get it all in an ISA. No need to use more than one provider unless you particularly want to. For more specific advice, give us the numbers.

One thing you might want to do is open an IWeb account before their free offer ends at the end of June , even if you don't use it. No ongoing fees for ISAs, just £5 each time you trade. If you plan to buy and hold it's a great account. Not so good if you want to drip feed money into it.

Their S&S investments could go into an S&S ISA ( obviously) but the others can only go into IFISAs.
Also these will be mainly tied up in illiquid loans to property developers, so will be difficult to cash in before a transfer.

DhwERbf689

badger09 said:

DhwERbf689 said:

In the last few years I set up a few different investment accounts on different platforms and invested a relatively small amount into each...

• A Nutmeg Stocks & Share account.
• LoanPad P2P Lending account.
• Kufflink P2P Lending account.
• Crowdproperty P2P Lending account.

But even though all these platforms offer ISA account options I just invested money into regular / non ISA pots.

I'm thinking now I would be better to have them in ISAs in order to get the tax free benefit.

None seem to offer the ability to just instantly transfer from the regular accounts into an ISA so I'd have to cash them all out, withdraw the money to my bank, put the money back into each platform and re-invest it into their ISA accounts which will result in some fees, taxes on gains potentially, and in some cases there may be "early" cash out fees on the P2P lending platforms as they are fixed terms and I'd be terminating early.

Two questions...

1) Obviously without knowing all the fees etc it's hard to advise to my specific situation BUT in general would I be better getting these out of the regular investment pots and into ISA accounts at some point ASAP?

2) Due to the new ISA rules I could have an ISA account on all 3 of the P2P lending platforms as long as the overall amount among all ISA accounts (P2P and Stocks & Shares) is under the £20k limit, right?

Love to know your thoughts please....

Thanks

Is your interest from the 3 P2P accounts, when added to any other non ISA interest, likely to exceed your PSA? 

How much, approx, do you have invested in the P2P accounts?

Under the new rules (from 6/4/24) you could have an ISA on each of the 3 P2P platforms and pay into all 3 this year. You can pay up to £20k in total, this tax year, into all your ISAs. 

No, the interest will not exceed the personal allowance. I only have about £1,600 to £1,700 in each of the P2P platforms.

And about £6k in the Nutmeg Stocks & Shares pot. 

DhwERbf689

Albermarle said:

boingy said:

In general, yes, get it all in an ISA. No need to use more than one provider unless you particularly want to. For more specific advice, give us the numbers.

One thing you might want to do is open an IWeb account before their free offer ends at the end of June , even if you don't use it. No ongoing fees for ISAs, just £5 each time you trade. If you plan to buy and hold it's a great account. Not so good if you want to drip feed money into it.

Their S&S investments could go into an S&S ISA ( obviously) but the others can only go into IFISAs.
Also these will be mainly tied up in illiquid loans to property developers, so will be difficult to cash in before a transfer.

Yeah, the P2P loans are probably tied in for the most part until a specific loan end period. I think there is the option for instant cash out on a couple of the platforms but with fees or restrictions obviously.

But it just feels like over the long term (I plan to leave all these investments in for years to come) they would be better in an ISA over the longer term than a general post, no? 

badger09

DhwERbf689 said:

badger09 said:

DhwERbf689 said:

In the last few years I set up a few different investment accounts on different platforms and invested a relatively small amount into each...

• A Nutmeg Stocks & Share account.
• LoanPad P2P Lending account.
• Kufflink P2P Lending account.
• Crowdproperty P2P Lending account.

But even though all these platforms offer ISA account options I just invested money into regular / non ISA pots.

I'm thinking now I would be better to have them in ISAs in order to get the tax free benefit.

None seem to offer the ability to just instantly transfer from the regular accounts into an ISA so I'd have to cash them all out, withdraw the money to my bank, put the money back into each platform and re-invest it into their ISA accounts which will result in some fees, taxes on gains potentially, and in some cases there may be "early" cash out fees on the P2P lending platforms as they are fixed terms and I'd be terminating early.

Two questions...

1) Obviously without knowing all the fees etc it's hard to advise to my specific situation BUT in general would I be better getting these out of the regular investment pots and into ISA accounts at some point ASAP?

2) Due to the new ISA rules I could have an ISA account on all 3 of the P2P lending platforms as long as the overall amount among all ISA accounts (P2P and Stocks & Shares) is under the £20k limit, right?

Love to know your thoughts please....

Thanks

Is your interest from the 3 P2P accounts, when added to any other non ISA interest, likely to exceed your PSA? 

How much, approx, do you have invested in the P2P accounts?

Under the new rules (from 6/4/24) you could have an ISA on each of the 3 P2P platforms and pay into all 3 this year. You can pay up to £20k in total, this tax year, into all your ISAs. 

No, the interest will not exceed the personal allowance. I only have about £1,600 to £1,700 in each of the P2P platforms.

And about £6k in the Nutmeg Stocks & Shares pot. 

At your current level of investment in P2P platforms, I suspect any early cash out fee would outweigh any potential benefit of using ISAs. If you intend to invest more money, you could use ISA & let his current loans runs down. 

For your S&S ISA with Nutmeg, you would have to sell your investments & rebuy inside an ISA. I don’t know anything about Nutmeg charging structure but again, it might be worth using an ISA for future investment.