Is it possible to have more than one ISA?

First Time Investing šŸ£
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Hi All. I am brand new to investing. I signed up to Plum to start a bit of passive saving and then heard the investments were going to be launching soon which they did. I have invested in 3 different ā€œthemesā€ called Growth, Tech and Emerging Markets. I opened up a stocks and shares ISA through Plum for this. Since then I looked into investing and found Vanguard which I quite like. The Growth theme is actually the Vanguard Lifestrategy 80 Fund. Iā€™m paying a tiny bit more for Plum to manage it and in return I donā€™t need to put in the minimum Ā£100 a month. But now I would like to try my hands at actively investing with Freetrade. From what I understand I can only have 1 ISA open at a time. To actively invest would I be able to open a general account and invest a bit but this would be taxable wouldnā€™t it?

Iā€™m hoping to learn alot more through you guys the community and excited to get trading!

Thanks

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Hey Shae, you are right - you can only open and utilise one ISA account of each type (Cash, S&S, etc.) in a single financial year.

You could invest actively but will only be exposed to CGT (Capital Gains Tax) if your annual return exceeds Ā£11,700. This is the actual ā€œprofitā€ you make. For example, if you invested Ā£20,000 in GIA, sold for Ā£35,000 in a few years, your taxable gain is Ā£15,000. Assuming the allowance remains as it is now, that is Ā£3,300 taxable (Ā£15,000 - Ā£11,700) at 20%. So your hypothetical Ā£20k to Ā£35k would be taxable at Ā£660 in GIA.

Only bear in mind that whilst the allowance is annual, it does not roll over to the next year. So if you keep accumulating capital for a few years and then crystallise (read: sell) all in one year, you are more likely to be exposed to taxes.

If you plan to invest in small chunks, it is unlikely that CGT will be an issue in the short term and by then Freetrade will most likely be offering an S&S ISA so you could protect yourself against CGT and Dividend Tax completely :slightly_smiling_face:

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Might be wrong but I also read somewhere you can only pay into 1 Cash ISA per/year. So if you have 3 Cash ISAs, you are only able to pay into 1.

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How many ISAs can I have?

ISA comment from @freetrade_cal (Freetrade Compliance staff)

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You can transfer mid year - but all your contributions from that year need to be transferred across.

ETA : in terms of the tax question posed by the OP in addition to the CGT issues well illustrated by @Vlad unless you expect dividends > Ā£2000 / year then there should be no tax implications ( as things stand ) to a General Investment ( non ISA ) FreeTrade account.

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That is right, I have double-checked and realised that I got my facts confused :no_mouth:

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From the offical government website:
"Every tax year you can put money into one of each kind of ISA. The tax year runs from 6 April to 5 April.

You can save up to Ā£20,000 in one type of account or split the allowance across some or all of the other types."

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This Freetrade blog is also a good starting point to help answer this question:
https://freetrade.io/blog/the-totally-not-complicated-investment-tax-post/

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Weā€™re going to be posting a lot about ISAs before and as we roll out the feature.

But for now I think the essentials to know are:

  • You can open or pay into 1 of each type of ISA a tax year

  • ISA types include cash, stocks and shares and a couple others (Lifetime, innovative finance)

  • You have a total annual limit of Ā£20k to pay into ISA(s) - but you can split that 20k between different types eg 10k into a cash, 10k into a stocks and shares

  • You can have multiple ISAs open and active year-to-year. This means you can have a stocks and shares ISA with one broker and open a second one with another as long as the second one is the first that tax year.

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