A couple of ISA questions
Discussion
Afternoon PHers,
I am hoping to get some ISA advice from you as I do not 100% understand them. A couple of years ago I sold my car and invested the money in a few different shares. I've sold all but one now which I think may want to keep long term and reinvest the dividends. Now, I have never used an ISA and never really needed one until potentially now.
What I would like to know is:
1) Can you usually transfer existing shares into an ISA? Or will I need to sell and re-buy and incur the transaction costs?
2) Do those shares effectively remain wrapped in tax free status forever? i.e. if they are worth 5k now, and 50k in 10 years, I wont have to pay capital gains when I sell them in 10 years time?
3) If 2) is true, does this mean I could invest whatever the full ISA allowance is in different shares every year and never have to pay capital gains on those shares, whilst still owning the shares I have just now that I may keep for 10 years?
I think I am keen to get them in an ISA soon because I don't see myself investing any large sums in the next year or so as I will probably be saving for a house deposit, so I wont be bothered about using up my ISA allowance now.
Shares bought at 5k, now worth about 7.5k. Thanks for the info, excuse the ignorance.
Cheers
I am hoping to get some ISA advice from you as I do not 100% understand them. A couple of years ago I sold my car and invested the money in a few different shares. I've sold all but one now which I think may want to keep long term and reinvest the dividends. Now, I have never used an ISA and never really needed one until potentially now.
What I would like to know is:
1) Can you usually transfer existing shares into an ISA? Or will I need to sell and re-buy and incur the transaction costs?
2) Do those shares effectively remain wrapped in tax free status forever? i.e. if they are worth 5k now, and 50k in 10 years, I wont have to pay capital gains when I sell them in 10 years time?
3) If 2) is true, does this mean I could invest whatever the full ISA allowance is in different shares every year and never have to pay capital gains on those shares, whilst still owning the shares I have just now that I may keep for 10 years?
I think I am keen to get them in an ISA soon because I don't see myself investing any large sums in the next year or so as I will probably be saving for a house deposit, so I wont be bothered about using up my ISA allowance now.
Shares bought at 5k, now worth about 7.5k. Thanks for the info, excuse the ignorance.
Cheers
Newc said:
Cheers, good link, think that clears it all up. Shame you need to sell and re-buy to transfer existing shares.Only if the shares have been bought through an employee option/savings scheme. Failing that, you'd have to sell them, put the money into an ISA and then re-buy the shares within the ISA wrapper. This will incur costs, is it worth it? You probably won't breach your annual CGT allowance anyway so once you've done your sums, it might be better to leave 'as is'.
The taxation benefits of the ISA wrapper die with you, but until then, there is no CGT on investments held within it.
The taxation benefits of the ISA wrapper die with you, but until then, there is no CGT on investments held within it.
Rickeh said:
Afternoon PHers,
I am hoping to get some ISA advice from you as I do not 100% understand them. A couple of years ago I sold my car and invested the money in a few different shares. I've sold all but one now which I think may want to keep long term and reinvest the dividends. Now, I have never used an ISA and never really needed one until potentially now.
What I would like to know is:
1) Can you usually transfer existing shares into an ISA? Or will I need to sell and re-buy and incur the transaction costs?
2) Do those shares effectively remain wrapped in tax free status forever? i.e. if they are worth 5k now, and 50k in 10 years, I wont have to pay capital gains when I sell them in 10 years time?
3) If 2) is true, does this mean I could invest whatever the full ISA allowance is in different shares every year and never have to pay capital gains on those shares, whilst still owning the shares I have just now that I may keep for 10 years?
I think I am keen to get them in an ISA soon because I don't see myself investing any large sums in the next year or so as I will probably be saving for a house deposit, so I wont be bothered about using up my ISA allowance now.
Shares bought at 5k, now worth about 7.5k. Thanks for the info, excuse the ignorance.
Cheers
1)If you have existing shares, on a certificate or nominee account then you can get them into the wrapper by selling them and buying them back in the ISA wrapper (utilising you allowance plus any free cash on the ISA if you have it). You will lose a few shares on the spread but the market recognises this type of transaction as a 'put through' so the spread will be tighter than normal, if you are dealing with a stock that has a wider spread normally. FTSE100 stocks have a very tight spread most of the time anyway so it wouldn't really be an issue there. You will be charged a dealing charge on the sale, but not usually on the buy back- although you have to account for stamp duty at 0.5% if the stock is eligible.I am hoping to get some ISA advice from you as I do not 100% understand them. A couple of years ago I sold my car and invested the money in a few different shares. I've sold all but one now which I think may want to keep long term and reinvest the dividends. Now, I have never used an ISA and never really needed one until potentially now.
What I would like to know is:
1) Can you usually transfer existing shares into an ISA? Or will I need to sell and re-buy and incur the transaction costs?
2) Do those shares effectively remain wrapped in tax free status forever? i.e. if they are worth 5k now, and 50k in 10 years, I wont have to pay capital gains when I sell them in 10 years time?
3) If 2) is true, does this mean I could invest whatever the full ISA allowance is in different shares every year and never have to pay capital gains on those shares, whilst still owning the shares I have just now that I may keep for 10 years?
I think I am keen to get them in an ISA soon because I don't see myself investing any large sums in the next year or so as I will probably be saving for a house deposit, so I wont be bothered about using up my ISA allowance now.
Shares bought at 5k, now worth about 7.5k. Thanks for the info, excuse the ignorance.
Cheers
2) Yes
3) Yes
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