Bed and ISA

[disney332]

Originally Posted by FamilyGWales

Thank you!

It sounds a bit as though you are suggesting that doing the bed and ISA process wouldn't be worth it? Or if not suggesting that, are certainly making sure I know that there may be better alternatives. 🙂

I have a cash ISA maxxed, and had thought if I did the bed and ISA process I could just continue to invest within that ISA envelope too.

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The question as to whether an ISA is best for you cannot be answered on a forum, but by a financial advisor after he is fully aware of your personal circumstances.

The facts are the Capital Gains Tax exemption of £12,000 in the 2019/20 tax year is available to us all, and the dividend exemption of £2,000 also avl to us all, before any isa is considered, plus the ability to split shares 50/50 with your spouce.

Disney332

[Guest]

Originally Posted by Labboy

160 a quarter well worth keeping imo but keep a check on value and dividend,

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Yes, they seem.to be reasonable rate of return. I wasn't anticipating selling them outright just transferring them into an SnS ISA. But the reading I have done is frustrating me because it seems to need digital certificates.

[Labboy]

Steady income at 160 so why change to an isa, keep as you are, as long as the shares are in your name, tax free income imo

[tspill]

If these are single shares then that is VERY high risk. If you want to be inn equities, sell then and purchase a fund that diversifies your investment. This is the number one rule of investments.

[Guest]

Yes, single shares.

[sam_b]

It appears to me that isa wrapping this would be a good idea if you want to hold the investment - if they grow in value, and in later years you sell, they may exceed CGT threshold and cause you some issues.
In order to bed and isa, you need to sell them and buy them back under an isa wrap. Two points:-

1) selling paper based certificate shares always costs more so first I would transfer them to electronic first - should be a simple CREST form.
2) I would consider if you really want to buy single stock back - it’s a big risk with all eggs in one basket - so it may be better to have an isa wrapped investment fund which will spread the risk.

I assume that you haven’t already used your isa allowance this year? You only have 20k that you can protect regardless of whether you invest shares or cash...

[disney332]

Originally Posted by sam_b

It appears to me that isa wrapping this would be a good idea if you want to hold the investment - if they grow in value, and in later years you sell, they may exceed CGT threshold and cause you some issues.
In order to bed and isa, you need to sell them and buy them back under an isa wrap. Two points:-

1) selling paper based certificate shares always costs more so first I would transfer them to electronic first - should be a simple CREST form.
2) I would consider if you really want to buy single stock back - it’s a big risk with all eggs in one basket - so it may be better to have an isa wrapped investment fund which will spread the risk.

I assume that you haven’t already used your isa allowance this year? You only have 20k that you can protect regardless of whether you invest shares or cash...

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The shares are 10k in value.

The cgt calculation upon sale is anything in excess of £12k gain

OP has the ability to transfer 50% to wife without tax implication.

Shares need to reach £34k (existing value plus 24k) before tax is a problem. Ie over treble in value.

The divs are tax free up to 2k per annum

I consider it unnecessary... period.

Disney332

[sam_b]

Originally Posted by disney332

The shares are 10k in value.

The cgt calculation upon sale is anything in excess of £12k gain

OP has the ability to transfer 50% to wife without tax implication.

Shares need to reach £34k (existing value plus 24k) before tax is a problem. Ie over treble in value.

The divs are tax free up to 2k per annum

I consider it unnecessary... period.

Disney332

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Whilst I tend to agree I have multiple personal examples of shares tripling in value... my former company sharesave shares have increased 5 fold in 9 years ... also 10k in a single stock is still not good practice unless this is part of a much bigger portfolio ...

[disney332]

Originally Posted by sam_b

Whilst I tend to agree I have multiple personal examples of shares tripling in value... my former company sharesave shares have increased 5 fold in 9 years ... also 10k in a single stock is still not good practice unless this is part of a much bigger portfolio ...

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Totally agree, but you need to consider length of hold and potential of the company to grow.

Both unknowns in the context of this thread, but 9 times out of 10 a tax liability would not arise.

Disney332