Anyone done a Bed and ISA?
Discussion
Morning all,
A question for the wise people of PH please...
I've recently discovered something called "Bed and ISA" which I believe means you can sell your existing shares and buy them back straight away in an ISA. Meaning that in future, any gains will be exempt from tax.
Back in 2000, I bought about £6000 worth of various unit trusts, and now they are worth about £3K-4K in total.
So would I be able to simply "move" them all into a single new ISA (this year, I haven't invested in any ISAs)? Is there any catch? I'm hoping that because they have fallen in value, there won't be any CGT where they are sold\bought.
Also, a lot of companies charge an admin fee for this. Is this avoidable?
Has anyone had any experience of doing this, good or bad, and can recommend a company to use?
Many thanks,
Tescor
A question for the wise people of PH please...
I've recently discovered something called "Bed and ISA" which I believe means you can sell your existing shares and buy them back straight away in an ISA. Meaning that in future, any gains will be exempt from tax.
Back in 2000, I bought about £6000 worth of various unit trusts, and now they are worth about £3K-4K in total.
So would I be able to simply "move" them all into a single new ISA (this year, I haven't invested in any ISAs)? Is there any catch? I'm hoping that because they have fallen in value, there won't be any CGT where they are sold\bought.
Also, a lot of companies charge an admin fee for this. Is this avoidable?
Has anyone had any experience of doing this, good or bad, and can recommend a company to use?
Many thanks,
Tescor
Tiggsy said:
CGT...on £4k? Your allowance for 2009 is £10k ish anyway.....it's why people with modest shares and UT holdings dont pay much if any tax (and you wont get the 10% div credit back in an ISA either)
spot on.It depends where you are currently holding your current stocks and shares. If you are using a investment platform then ie a nominee account some firms can allow for in-specie transfers which simple means the shares are reregistered into the receiveing schemes name and you dont have to buy or sell the funds thus incur no charges or fees for buying and selling but are likely to pay initial charges to set up the isa account.#
dave
Essentially, the bed and ISA things should minimise the time you are ‘out of the market’, but it’s not necessarily the best or cheapest, just the easiest.
The main thing to watch out for is the purchase fee on the unit trusts, which can be as high as 5% within the offer price. Your best bet might be to create an ISA with a fund supermarket that can get a discount on that fee and then sell the shares separately (eg. via the fund manager).
Before you do that, make sure the funds can be sold without an exit penalty (unlikely) and there are no purchase restrictions on the share when you buy (again, unlikely).
I don’t believe it’s possible to transfer shares into an ISA. You have to buy them within the ISA wrapper. Don't forget to look at the broker and custody charges as well.
The main thing to watch out for is the purchase fee on the unit trusts, which can be as high as 5% within the offer price. Your best bet might be to create an ISA with a fund supermarket that can get a discount on that fee and then sell the shares separately (eg. via the fund manager).
Before you do that, make sure the funds can be sold without an exit penalty (unlikely) and there are no purchase restrictions on the share when you buy (again, unlikely).
I don’t believe it’s possible to transfer shares into an ISA. You have to buy them within the ISA wrapper. Don't forget to look at the broker and custody charges as well.
^
agreed.
Knowing more about how the OP holds his existing shares would be useful. The fund supermarkets/platforms do have significant advantages in terms of cost savings for buying and selling and because they deal with all the administration involved with the buying/selling process plus dividend/income payments. Some do allow a in-specie transfer to a ISA but there is usually a charge for doing this which can vary from platform to platform.
have a look on Platforum for a comparision of some of the platforms currently available. It is essential though you get professional advice before making your decisions. Note some advisers have a favourite platform and the largest platforms arent always the best as they have limited fund choices and dont always get the same discounts/commission terms as some of the more nieche platforms do!!
agreed.
Knowing more about how the OP holds his existing shares would be useful. The fund supermarkets/platforms do have significant advantages in terms of cost savings for buying and selling and because they deal with all the administration involved with the buying/selling process plus dividend/income payments. Some do allow a in-specie transfer to a ISA but there is usually a charge for doing this which can vary from platform to platform.
have a look on Platforum for a comparision of some of the platforms currently available. It is essential though you get professional advice before making your decisions. Note some advisers have a favourite platform and the largest platforms arent always the best as they have limited fund choices and dont always get the same discounts/commission terms as some of the more nieche platforms do!!
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