I’d like to start a portfolio for my two little boys, putting pocket money into the likes of Sea Ltd, Alibaba, Tencent & NIO. Is a general investment account my only option. Wanted to keep everything in an ISA but doesn’t look like this is possible. Are GIA’s a good idea with the tax issue?
It’s not really the type of instrument (shares/DRs) that determine what is ISA-eligible, instead what matters is if the underlying asset is listed on a recognised exchange.
For example you can hold ASML ADRs in an ISA (and you can hold the underlying shares as well) because ASML is listed on the AMS.
The ISA isn’t the only option, other tax efficient wrappers (such as SIPPs) don’t have the same requirements as ISAs.
The only easy way to invest for kids that circumvents the £100 HMRC rule are JISAs.
There are trust options but they are more onerous and costly.
Most of the stocks you mention are not ISA eligible.
Trust me. It’s not easy.
I have Alibaba and Nio in GIA due to non isa compatibility. Not really a problem for me as not higher amounts and even if dividends commenced I doubt I would exceed the threshold for capital gains tax.
Have a read up on capital gains tax but from what you have put I think it may not apply to you either under present rules. Good luck.
It’s almost impossible you don’t invest in companies like Alibaba, Tecent or Nio, that’s why I also keep my GIA opened. However, I maintain a small amount of money on it.
I have NIO in a LISA… because AJ Bell are inept.
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Also consider opening a SIPP for both of them. You get tax relief on any contributions, and gains are tax free (till they retire).
They really should use the FinKi autoISA API… if anyone from AJBell is reading this… hello@finki.io
And also refund all my charges to date and send me a fruit basket to apologise.
Just looked on Interactive Investor which suggests NIO, Alibaba, JD.Com, Sea Ltd all available in a SIPP. Is that your understanding too, I.e rules are different to an ISA?
Yeah that’s what I meant by SIPPs having more relaxed requirements, you can have lots of things that can’t go in an ISA (FX, derivatives, synthetics, property etc…)
Because I’m treating both ISA/SIPP very similarly at this point I’ll just be using my SIPP for anything that I can’t wrap in an ISA (mainly ADRs for TSMC and JD in my case).
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