[Feature Request 🔧] Internal GIA to ISA transfers (Bed and ISA)

Original request from March 2019 has been edited to clarify what is required and at the same time to help people who want to make a transfer before the functionality requested is implemented:

  • According to present HMRC rules governing ISAs, shares can be directly transferred into an ISA if they have been acquired from a schedule 3 SAYE option scheme or a schedule 2 SIP.
  • It is not possible to directly transfer shares from a GIA to a ISA in any other circumstance.
  • So if you want to move any shares from a GIA to a ISA you must sell them. Then move the proceeds to an ISA and re-buy them there.
  • This request is for Freetrade to have an automatic sell in a GIA and repurchase in a ISA facility. Such a share exchange facility is commonly known as a Bed and ISA.
  • You can already manually sell, and then request support to transfer the proceeds to an ISA see [Feature Request 🔧] Internal GIA to ISA transfers (Bed and ISA) - #5 by Nicola
    *When you sell shares in a GIA to rebuy them in an ISA there is always the possibility that you will lose money when you move the cash between the two accounts because the buy price in the ISA is much higher than the sell price in the GIA. This might be exacerbated by the length of time you are “out of the market”.
  • Sale of shares in the GIA constitute a crystallisation event for capital gains gains and losses. So be mindful of the annual CGT allowance when you make the sell/purchase request.
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Or perhaps the ability to do this for free? What would happen if a free sell was queued in the GIA, and a free buy was queued in the ISA? Would it fail if the GIA sell didn’t get actioned first, so there was no money in the ISA account?

I supposed right now it’s impossible, since you can’t place a buy without money in the account.

As Freetrade provides ISA with 3 £/month i see no point using isa if I less that 12K £ portfolio ( assuming 0.3% ) platform fee. For a small scale investor who is planning to save 200£/month it will take another 2-3 year ( assuming I increase contribution in near future ) to get to that point.

My question is hence is it possible to transfer my general investment account to ISA one i have reached that threshold without selling my portfolio ? or do i need to sell and then open ISA and buy back everything again ?

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Right now you’d have to sell everything open an Isa and buy back everything. Who knows in a couple of years it could be a lot more seemless.

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As Ben explained, you would have to sell all your holding and buy again.

Nicola, from Freetrade Ops Team, has explained the rationale behind it:

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Even if the app made it a one-touch operation, under the hood I’d expect a sell and buy to be occurring.

HMRC is not going to let you treat your GIA as tax free just because you transfer it to an ISA :unamused:

I thought there would be a way to just say the following assets has been transferred. They would just calculate the portfolio value and deduct it from ISA allowance. AFAIK, we can transfer ISA account from one provider to another. ( I have never done that till now )

To follow on from what Nicola mentioned, the tax office wants to make sure that you pay any capital gains tax that you might owe on your investments before you move them to an ISA. That’s why you can only open an ISA by making a cash contribution or by transferring stocks from another ISA.

I’ve just moved this conversation over to this thread, to keep all of the info about this in one place.

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I have to say I have received my first disappointment after joining Freetrade.

I sold my trades in my GIA and waited for the money to settle (minus Debenhams). Asked yesterday for the settled money to transfer to my ISA with the intention of rebuying my sold stocks and it still hadn’t occurred by today.

Upon speaking to Customer Services, apparently this takes days and is not quick as I expected. Okay, they have a bit of a backlog at the start of the tax year, but how hard can it be to move settled money from one account to another?

Moral of the story - if you rely on buying at the share price you sold at, be wary of going down this route right now.

Hey guys just wondering how long it take the freetrade guys to move over my funds from basic account to isa account? All my funds are settled cash too.

Took just a day or two for me, just message them in app and they’ll get it done.

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Hi Kevyn, sorry for the delay here :sweat:. Following a higher than normal volume of deposits for our team to process manually, we are experiencing some delays with cash transfer requests. We hope to make this quicker again soon.

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Are there plans to automate the cash transfer requests?

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I’d second that with are there any plans to automate general deposit processing? As it doesn’t seem scalable to process manually & just seems odd for a high tech company to process like this. Also, I know there’s Apple & Google Pay in the works but these are limited to lifetime £1000 top ups.

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Yes, we want to automate as many of our stock broking operations as possible, to make this a seamless experience in the app.

Our investment platform, which we’re building at the moment, will enable us to automate these transfers.

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Would you agree that this mysterious investment platform deserves a blog post with more details about this functions and capabilities? :wink:

So far I quite often see that it is a solution to many existing problems, I’m sure the community will like to hear more.

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We’re keen to share more about the platform too :grin:

In case anyone missed it, we revealed more details about our plans for the platform in our latest blog post about our upcoming crowdfunding round -

The product’s out, time to scale

We will grow our engineering team and enhance our platform.

This will allow us to speed up important features like fractional shares, a stock universe in the thousands and new account types. It’ll support our upcoming analytics, which will give our customers unique ways to understand their portfolios and improve their performance all from the app.

If you’ve looked at our roadmap recently, you’ll also have noticed one prominent item is our own investment platform. This is a unique technological and operational project. It will bring a huge amount of the intricate, decentralised processes and data streams of stock market investing into one modern, in-house platform.

As well as aiding many of the features above, this will dramatically drive down our costs and give us way more adaptability and freedom as a business.

but we’ll share lots more as we get closer to switching over to the new platform.

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:eyes::popcorn: Day 3 and still waiting. Has yours moved @Emina1?

Thank you @Gemhappe for your reply. I understand businesses have pressures from time to time but this was not communicated at the start and my expectations were based on the earlier post by @Nicola which made it sound like it was the same day. Having almost £2,000 lay around without an ETA when it will move doesn’t give good impression especially when I could have probably withdrawn it in the timescales.

Hi mate last week I sold everything ready to transfer, then I had to wait until funds settled which happened Tuesday afternoon Andy finally today about 3pm it was transferred over to the isa. I was gutted too because I wanted to spend a lot on Qualcomm but my funds weren’t ready and they shot up like 20%. Sods law.

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When Vanguard have issues that mean a buy or sell fails or is delayed, they’ll make sure you haven’t lost out by giving you the expected price (but always in your favour).

Since the expectation here was same-day turn-around (before your trade has even settled), I think Freetrade should do the right thing and also make up for your loss by giving you 20% more of those shares (or whatever the appropriate math on that is).