[Feature Request 🔧] Bed & ISA

It is currently possible to transfer cash from your Freetrade GIA to your ISA (by contacting support, and in the future this will be a function in the app).

Other platforms implement effective transfer of shares with “Bed & ISA”. You call them up, and then they sell the shares in your GIA and immediately buy them back in your ISA. The idea is you won’t lose much if the share price is fluctuating.

If they charge for trades, they typically only charge you once, eg. for the sell.

Would be great if Freetrade implemented something similar, but without the requirement to call them (or use in-app support), and by charging the instant trade fee only once, so £1 for the whole operation.

Not sure if this is the right category to post, but maybe it’s a good idea as recent comments have suggested. Move if appropriate.

ISA rules enforce cash GBP upon entry into ISA wrapper.

Some brokers offer “bed & ISA” where they charge same or reduce fees to sell shares, and repurchase them inside ISA. But ultimately one is still realising capital gains/losses, getting taxed on that, then moving cash into ISA.

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Didn’t realise this. What a pain.

I guess the ISA is less appealing to me now.
Almost like starting the portfolio again ;/

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I have just opened a Freetrade ISA and in doing this found that I couldn’t transfer the shares I have in my basic account into my ISA account without selling and re-buying them, I’m really pleased with my shares as they are in the green…
Can we start voting to get the Freetrade team to look into enabling this?
If this thread has already been made let me know?!

This is more a regulatory question.
But selling everything and buying it again has almost zero effects except that it’s no longer green if you’re below the 12000£ capital gains threshold and markets don’t move too much.

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Has one quite important difference - you lose the spread between buying & selling which can be quite a lot in the variable market. With the way the buys and sells work within Ft its also impossible to see the spread up front until after selling & buying again so you have no idea how much you will lose until it happens.

Its a legitimate request - competitors are also adding it to roadmap, I see no reason Ft shouldnt as well.

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Yeah, that is valid. But covered under my ‘almost’ for liquid stocks. But since the broker has to buy and sell, it would just be shifting these costs from the user to the broker.

Possibly worth doing to encourage a monthly income from the user instead of just the free offering but a fair point - I hadnt thought about that

As all the shares are actually registered under FreeTrade as our nominee, transferring wouldn’t involve going to the market at all. If you are transferring from one account to another, this is a simple ledger task in the background for FreeTrade. This is a very solvable issue.

The only obstacle is the ISA regulation stating that entry into the ISA envelope has to be in GBP cash.
So the shares would technically need to be sold to GBP and then repurchased, but this could all be done on the FT ledger without actually going to the Stock Market.
FT buys the shares from your normal account and sells them back to you at the same price, into your ISA account.

FCA rules enforce trading on the market too. I.e. freetrade cannot selftrade with themselves when doing a sale & repurchase. (I.e. just a ledger accounting entries).

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I was not aware of that. That’s a real pain.

Perhaps best to leave everything in the basic account and just start funding your isa. When income comes in to the basic then transfer that over and when you’re ready to sell particular shares in the future you can just move the cash over at that point.

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Wulfy, this is what I’m going to do in the mean time
Didn’t realize it’ll be as hard as everyone is making out, I thought seen as the shares are still under the same name and account it wouldn’t be a big feat to just move them between basic and ISA

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My own intention (partially resulting from the conversation here) is to leave the purchases in the basic account as they are and as others have said transfer dividends over infrequently. When the shares reach the point of encroaching on CGT I’ll sell them then buy in the ISA.

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Note future ISA / tax rules can change. In the current climate If you think you’ll be making 12k profit I’d think about ISAing them asap.

FYI, if you want Freetrade to transfer the cash from your basic account to your ISA, it takes 3-5 business days (at least in my case). The alternative is to withdraw the money to your bank account and then send it back to Freetrade with a different payment reference.

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Wow that long!?

I was planning on selling a lot today and buying all back today in the ISA. Guess that’s not possible?

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No, you can’t do it that quickly.

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