Hi both,
Just to provide a bit of context on our position that may or may not be accurately reflected in that report.
We strongly believe fractional shares make investing more accessible for savers, especially those just getting started. It aligns directly with our mission to Get Everyone Investing. Fractional shares offer investors materially the same benefits and protections that they receive when investing in whole shares. For this reason we began offering fractional shares in our ISA product in 2020.
We believe Fractionals are permitted by the rules and we have received well reasoned legal advice that supports our position. Other providers also offer fractional shares in their ISAs and have received similar supportive legal advice. We have been in discussion with HMRC on this matter for some time. Nothing raised by HMRC so far changes our informed position.
We are committed to resolving this directly HMRC as required. We want to reassure customers that Freetrade would be responsible for settling any tax liabilities due on fractional shares in our customers’ ISAs. However, we will resist such an action by HMRC, as we believe that collecting tax on these amounts would be unfair on us and our customers, and unsupported by the ISA rules and wider policy considerations.
We feel it’s important that we robustly defend our interpretation of the rules because of the real benefits that fractional shares offer ordinary investors. It is very clear to us that fractional shares make investing more accessible and make it easier for investors to be able to effectively build a diversified portfolio. While fractions benefit investors of all sizes, banning them from ISAs would create barriers to entry for those investors with more modest amounts. This runs counter to our mission and our beliefs as a company. We are committed to protecting the interests of our customers and everyday investors at large in fighting for and securing a positive outcome.