Self select Shares ISA not worth it?

[RichF]

Over the last year I've dipped my toe in the water with a small amount in shares (~1k) to see if it is something I can 'do', and it's been successful overall. I only went in planning to get a better return on bank interest rates (which was pretty easy, considering interest rates!)

I want to set things up correctly as this is something I plan to continue over the next 10+ years and can't quite work out if using a select select share ISA is worth it? I use halifax for trading, and they have an ISA with a charge of £12.50 per annum.

However, if I'm only going to have probably a max of 3k's worth of shares right now, (but maybe adding more each year) it seems unlikely that I'll be wanting to sell over the CGT threshold in the near future?

So is that £12.50 pointless when I can just put them in the normal trading account, or should I be looking at this on the longer term view when they will hopefully be over the threshold and I end up wanting to sell to buy a house/extension etc?

Hmm, writing this question has got it down on screen and made me think the ISA is the way to go about after all, but would be glad to hear your thoughts! I'm not planning on becoming some monster day trader, only a handful of well thought out trades each year.

[Newc]

Tax free divis* and coupons too.

• less the 10% government theft before you even see it

[bogie]

long term its worth it because you only get one chance per year to shelter your investment from the taxman

in 10 years when you have £40-50K and might be fortunate to start to pay CGT you can rush and fit it into an ISA....the ISA tax allowance is lost each year, so it should be a priority to fill it first

[trashbat]

Depends what growth you expect.

You could hope to see 10x your investment on a wise or lucky AIM pick, which could easily carry you over the ~£11k CGT threshold, and thus be forced to either pay tax to access your money, or keep more of it volatile in the share until the next FY boundary.

Shop around. Beaufort do a Share ISA with no charges. I have one but haven't used it yet, so can't comment.

[hornet]

Rather than share pick, could you not just put a regular investment into a few funds? Granted, not as sexy as dipping in and out of AIM shares, but a handful of decent funds should see you beat cash returns on average. Maybe look to build up a core holding with say 75% of your yearly budget, then use the other 25% to play with? I've dabbled in individual shares in the past, but have concluded a) I don't have the time to do proper research and b) I don't want to be stressing about markets every day, so I've shifted more towards a "set and forget" approach.

[RichF]

Thanks everyone, like I thought writing it down made it make more sense to use the ISA route. Trashbat - I hadn't come across Beaufort so I've signed up with them and will see how it goes, thanks for pointing it out.

I might top up the rest of the ISA with fund investments, that's not a bad idea as I can still enjoy the managing of the individual shares that I come across. The shares I've chosen so far aren't something I need to worry about every minute of every day and that's how I plan to keep going!

[ringram]

Deffo forget the share pick.
low cost index tracker and just keep dumping spare cash in. Consider it a one way trip and forget about it for a few years.

[trashbat]

RichF said:

Trashbat - I hadn't come across Beaufort so I've signed up with them and will see how it goes, thanks for pointing it out

No probs - if you use it before I do, let us know how you get on. From a brief play I was concerned whether it would give you live prices rather than just letting you set limit orders, but since I had no money in it, couldn't tell for sure. Not a major disaster either way.

[Ginge R]

This Beaufort?

http://www.beaufortsecurities.com/img/pdfs/advisor...

That's not to say it's bad - but it does charge.

trashbat said:

Shop around. Beaufort do a Share ISA with no charges. I have one but haven't used it yet, so can't comment.

[trashbat]

Ginge R said:

stuff

That's Beaufort, but you're looking at their managed accounts.

http://www.beaufortsharedealing.com/index.php/our-...

Edit: I meant no annual charges, not a complete lack of dealing commissions etc. - sorry if that wasn't clear. You're still looking at the wrong rate card; self-managed is £8 flat rate per-trade commission (plus stamp duty etc).

Edited by trashbat on Tuesday 12th November 20:37

[Ginge R]

Rog.

Looking at that, it's a cheap and cheerful service that (probably) inspires enthusiasm, 'hands on', activity and not huge portfolios. If you have a modest amount with them, then £8 per trade might add up - try and establish what the Reduction in Yield is after a few months - if you save money by going somewhere where individual trades are cheaper for more activity (or vice versa, if thats the kind of investor you are) then consider your options. But if/when you want to leave, and if you have a varied portfolio with fingers in lots of pies, then £16 per line tyransfer might administer a stinging coup de grace too. The 10% divi charge won't help along the way either.

trashbat said:

hat's Beaufort, but you're looking at their managed accounts.

http://www.beaufortsharedealing.com/index.php/our-...

Edit: I meant no annual charges, not a complete lack of dealing commissions etc. - sorry if that wasn't clear. You're still looking at the wrong rate card; self-managed is £8 flat rate per-trade commission (plus stamp duty etc).

Edited by trashbat on Tuesday 12th November 20:37

[trashbat]

Ginge R said:

Rog.

Looking at that, it's a cheap and cheerful service that (probably) inspires enthusiasm, 'hands on', activity and not huge portfolios. If you have a modest amount with them, then £8 per trade might add up - try and establish what the Reduction in Yield is after a few months - if you save money by going somewhere where individual trades are cheaper for more activity (or vice versa, if thats the kind of investor you are) then consider your options. But if/when you want to leave, and if you have a varied portfolio with fingers in lots of pies, then £16 per line tyransfer might administer a stinging coup de grace too. The 10% divi charge won't help along the way either

All good points - some back:

-- with the exception of frequent trades at about £6 a pop, they're pretty cheap amongst those I've found

-- £16 a transfer isn't great but note that a lot of places (e.g. Share Centre) will pay these costs for you when transferring to them

Personally I use The Share Centre at the mo, but not their ISA, which has higher maintenance fees than I'm happy with. They're good for what I've been doing, but when I next deal, I may use Beaufort instead.

[Ginge R]

Nice one.

It's also about engaging with and enjoying the process too, and it's good that you're doing that.

[trashbat]

Also this is a handy summary of products, and how I found Beaufort - I think this was tipped by someone on PH actually:

http://www.investorschronicle.co.uk/rf/Pdf_fmt/FT%... (PDF)