ISA mistake - opened a General Investment Account.

James19791

Nutmeg have told me that if I move funds into an ISA with them then that 'triggers a sell and buy' - I guess this means that the amount is then subject to CGT?  In this case I don't see any advantage in staying with Nutmeg and will go ahead and open an ISA with another provided.  

I've done a crash course in CGT.  If none of the CGT allowance is taken up by internal sales of funds within my portfolio (unlikely), then at current (35%) gain I am allowed to sell £8,571 worth to stay under the allowance.  If I sell £20k worth then the it will be around £930 CGT.  Obviously it will be a bit more if my allowance is taken up or exceeded.  I've asked Nutmeg for my current year figure.  

FrugaiMacDugal

You can't just transfer to a S&S Isa with a new provider, there will still need to be a Bed&Isa.

James19791

FrugaiMacDugal said:

You can't just transfer to a S&S Isa with a new provider, there will still need to be a Bed&Isa.

Sorry I meant to say withdraw the money from my Nutmeg GIA then open an ISA somewhere else and deposit the cash.  Since there seems to be no option to transfer that doesn't involve dispersal/sell and buy.  

James19791

From what I can see 'bed and ISA' (even if Nutmeg allow it) doesn't help me in my case as it involves disposal.  Is this correct? ColdIron said:

FrugaiMacDugal said:

Is Bed&Isa an option?

That would require a disposal

From what I can see 'bed and ISA' (even if Nutmeg allow it) doesn't help me in my case as it involves disposal. Is this correct? 

ColdIron

James19791 said:

From what I can see 'bed and ISA' (even if Nutmeg allow it) doesn't help me in my case as it involves disposal.  Is this correct? ColdIron said:

FrugaiMacDugal said:

Is Bed&Isa an option?

That would require a disposal

From what I can see 'bed and ISA' (even if Nutmeg allow it) doesn't help me in my case as it involves disposal. Is this correct? 

Yes. You can only put cash into an ISA so you would need to sell and face CGT. The only exceptions to this are SAYE schemes with employer shares but this isn't you

You would need to sell/dispose your investments to cash (with CGT implications), move that cash into an ISA and repurchase. Bed & ISA is just a marketing term to describe your platform joining all three steps together for you with a single instruction to save you a bit of hassle, it's a convenience to their customers. Some might give you a break on any transaction fees. It's not a magic wand and won't help you at all

FrugaiMacDugal

James19791 said:

FrugaiMacDugal said:

You can't just transfer to a S&S Isa with a new provider, there will still need to be a Bed&Isa.

Sorry I meant to say withdraw the money from my Nutmeg GIA then open an ISA somewhere else and deposit the cash.  Since there seems to be no option to transfer that doesn't involve dispersal/sell and buy.  

You've first got to sell before you can withdraw, and that will incur CGT.

James19791

FrugaiMacDugal said:

James19791 said:

FrugaiMacDugal said:

You can't just transfer to a S&S Isa with a new provider, there will still need to be a Bed&Isa.

Sorry I meant to say withdraw the money from my Nutmeg GIA then open an ISA somewhere else and deposit the cash.  Since there seems to be no option to transfer that doesn't involve dispersal/sell and buy.  

You've first got to sell before you can withdraw, and that will incur CGT.

I don't see any options to avoid CGT other than staying below the CGT allowance.  Depending on the capital gains from internal sales of funds (beyond my control) from within my set portfolio, this might not leave me with much (if any) remaining CGT allowance.  So unless I want it to stay forever in the non ISA account (subjecting to even more future CGT) I might a swell take a hit in terms of CGT now. 

I am making an assumption of continues portfolio growth which I know is not guaranteed.  I I knew that there would be A stock market crash next week of course I could wait for that.    

FrugaiMacDugal

What do you reckon your actual £££s gain is?

eskbanker

FrugaiMacDugal said:

What do you reckon your actual £££s gain is?

From OP:  

James19791 said:

In the 3 years I have contributed 55k and my investment stands at 74k so a 19k gain.

FrugaiMacDugal

Thanks, missed that.

Might save a bit to sell half this tax year and half next, though will it still be £3000 after autumn budget?