Funds and ISAs

CameronRiley

HI all.  I have a question (or three) I could do with some help with.
This year and for the next two years i am likely to comfortably max out my ISA allowance.  On the understanding that the increase in fund values is taxed as capital rather than income would I be better off to put the funds in an unsheltered trading account to take advantage of my CGT allowance and leave room in my ISA for shares (mostly div paying). 
Secondly, If I sell units and realise a gain st some point in the future, how is the gain calculated?  Is it the gain from the date of purchase or from  the start of the current tax year (ie the gain resets to zero on April 6 every year?  Finally, what would be the most CGT efficient way of withdrawing cash from the trading account?   Sorry for seeming a bit dumb but I worked in Jersey until a few years ago (no CGT, no ISAs).
TIA
Cam

Keep_pedalling

There is no tax to pay on funds within an ISA, no income tax, no dividend tax and no CGT, so the answer to your question is no.

Alexland

I'm a bit confused by your question. Are you saying you will have spare income even after making the most of your ISA allowance each tax year? If so are you making good use of contributing into pension(s) to reduce your tax liability? Unsheltered trading accounts are usually a last resort after exhausting all the other places you could efficiently stash money.

eskbanker

CameronRiley said:

This year and for the next two years i am likely to comfortably max out my ISA allowance.  On the understanding that the increase in fund values is taxed as capital rather than income would I be better off to put the funds in an unsheltered trading account to take advantage of my CGT allowance and leave room in my ISA for shares (mostly div paying). 
There's no significant difference between shares and funds in this regard, i.e. both dividend income and capital growth from each are subject to taxation if held outside an ISA.

Secondly, If I sell units and realise a gain st some point in the future, how is the gain calculated?  Is it the gain from the date of purchase or from  the start of the current tax year (ie the gain resets to zero on April 6 every year?
The former, there's no annual reset for gains.

Finally, what would be the most CGT efficient way of withdrawing cash from the trading account?
Withdrawing cash from a trading account is unrelated to CGT, which is triggered by the sale of the assets rather than withdrawal of the proceeds.  If you're trying to minimise CGT liabilities, sell enough every year to realise your annual CGT allowance....

Hopefully this answers your questions....

MX5huggy

Remember you have a £500 divided allowance so you may want to hold some assets that pay dividends to take advantage of this. https://www.gov.uk/tax-on-dividends