ISA account

I have only been investing since March and I’ve been reading and learning lots from this forum. I’ve been very lucky with my investments so far but that’s more due to covid and lucky timing…

I set up a basic freetrade account, I’ve currently invested just over 8k and made 30% on that so far. Moving forward I will just be drip feeding £200ish a month into my account. My question is, when should I think about moving things into an ISA account? Is it better to do earlier than later or wait till
I hit the tax limit? Any advice, in terms or tax I need to be aware of?

Hope this isn’t a totally stupid question and thanks for the help in advance.


The sooner the better.

You will lose money on the spread having to sell and rebuy in an ISA.


There is a tax-free allowance.
£2000 on dividends and £12300 capital gain

Is there any reason not to open an ISA? Just the allowance would suggest that below that limit, it might not be worth opening with £3 a month in fees

In a similar position to OP, so it would be great to hear from people

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That is my thinking, I won’t hit the allowance this tax year.

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I imagine that will be smaller than the charges I pay for having an ISA though, tell me if I’m completely wrong.

Could I switch over in late March of the year I suspect I will go over the government allowance? Potentially loosing some, selling and rebuying but saving paying for and ISA when I’m not likely to go over the allowance, I appreciate 3£/month isn’t much in the long run…

Also… after actually doing some reading :grimacing:, I would change my portfolio and put more into and ETF appose to stocks …


If you invest £200 a month for the next 10 months it’s £2000 invested. If you then have to sell it all and rebuy in the ISA it’s possible you will lose more than £30 on the spread.

Add to this - if your 8k goes up you are going up to 10k for example - you will have to pay the spread on the extra 2k vs doing it now.

I would do it now personally.

Plus - it isn’t impossible the gov change the tax free allowances to claw back some money to pay for Covid.


Very true,


Assuming a pretty generous 5% return on dividends. I still can’t see the point of an ISA till you get close to 40000 in size

I know people say there might be a lot of transfer fees, but nothing is stopping you not transferring the whole 40000 and just the amount to keep dividends under 2000

I accept the point that the tax-free amount is not guaranteed.


If you have 8k invested you need to sell for 20k+ in order to have to pay capital gains tax. Having said this, opening an ISA at this stage will offer you some peace of mind

The issue is you don’t know what capital gains you will have in future years.

Also, what if the gov reduce the ISA limit to 10k from 20k? Or reduce the CGT and dividend allowances?

I certainly think for the sake of £3 a month it’s a no brainer.


I would put it in an ISA as soon as possible. Its a lifetime tax wrapper no tax on interest or Capital Gains or tax on dividends. Ask FT to transfer it for you. I did, and it took a while

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Is that an option? How did you manager it?

From what I’ve read, people seem to sell and the re-buy in the ISA.

I prob won’t rebuy the same shares though, I initially bought without doing my reading.

In that case you can take a bit more time. Wait til you think some of your current stocks are strong and you spy one you want that’s in a dip (and will stay depressed for 3 working days :joy:) and just cash out and buy in.

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I went through this around 4 weeks ago through FT. I had to sell everything in my basic account and then transfer the money into my ISA. That process took 5 days. I then re-purchased all of the stocks.

I understand the Math around waiting until you have a certain amount invested but for me it made more sense to just get it all into the ISA and start building my portfolio without needing to worry about selling and rebuying etc.

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I would leave that money invested in the basic account and open another ISA for future investments. Honestly, if this investment earns you, say, 100% in the near future, then it’s already been worth it and you wouldn’t pay taxes.


It does not seem worth having an ISA at this stage.

A lot of companies are not paying dividends during covid, so you will not hit the £2k taxable amount.

You would have to make more than £12300 profit to pay any capital gains.

The way I looked at it is that this year I won’t go above that so in the short term not as useful but let’s say I use the 20k per year allowance every year for 10 years (presuming nothing changes etc) then I would have 200k in there. Let’s say the stocks go up an average of 10% and a 5% dividend across the board in year 10. That would be 20k capital gains (if I sold) and 10k dividends. That said I hope I can make better returns!

My understanding is if that 200k has all been invested through the S&S ISA then the CGT and Dividend will be tax free. If I purchased outside the S&S ISA then it won’t be and the only way to make it so would be to sell and rebuy my positions (but then only up to 20k per year otherwise would exceed annual allowance). You could also get really unlucky between selling and rebuying.

Given that its £36 per year, £360 for the decade, I felt it was worth the investment to get that guaranteed zero tax. Interested in others opinion on that thought process though… I took a few days to decide which way to go

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100% agree
The risks of selling, waiting for money to transfer & then rebuying could easily use up more than the £360 for having the ISA over 10 years (assuming cost of ISA doesn’t go up)

On the flip side however, you could even profit from selling, transfering money and buying again if stock prices are falling. Regardless, if you’re worried about prices changing, there’s nothing stopping you from selling in chunks and moving money over gradually, essentially dollar cost averaging your transfer.


I was hoping someone would make this point.

If you are doing a manual transfer, then you only transfer each stock over while it’s price is falling. This removes the risk of the spread causing you to own less shares after the transfer than before.
In fact there is a good chance you might improve your position in each stock during the process.

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