ISA - Individual Savings Account for tax free saving


(Kenny Grant) #1

Since we don’t have a topic for ISAs to vote on (that I could find at least), here is my vote for that.

IMO this should be the top priority for Freetrade, after launching, and is essential to rapid growth in the UK. Almost everyone is going to want an ISA and it will become the primary account type very quickly, so I think will require a rethink of the app UI.

When the roadmap comes out, it’d be great to have a firm timeline for this so that people can plan their financial year. I’m hoping to open an ISA next April with Freetrade. :pray:


#2

Totally agree. I only want to have an ISA, not a general account, so the wait for me is even worse than most people!

Offering the ISA was one of the big selling points of Freetrade for me. I wouldn’t use Freetrade without it.


(Dave Smith) #3

to be fair you need quite a lot in your account before ISA even makes a difference, you won’t pay tax on dividends until they reach £5000 per year, and you wn’t pay CGT unless you have some pretty big wins

Edit, having read Alex’s link looks like they dropped the dividend allowance from 5K to 2K this year

Obviously an ISA is better, but I wouldn’t not use it just because it isn’t an ISA


(Alex Sherwood) #4

We’ve shared some more information about when ISAs might be useful here -


#5

As you say, the lower dividend tax allowance will (hopefully!) affect me eventually so best to build up the ISA as much as possible now. It also avoids any CGT exposure. I don’t want to have to start with with a general investment account now and then have to sell and transfer to the isa


(Kenny Grant) #6

to be fair you need quite a lot in your account before ISA even makes a difference, you won’t pay tax on dividends until they reach £5000 per year, and you wn’t pay CGT unless you have some pretty big wins. Obviously an ISA is better, but I wouldn’t not use it just because it isn’t an ISA

It depends.

Many people have other things going on in a given year (e.g. selling a house, receiving dividends) which impact their allowances. The dividend allowance is really low now too. I think one of they key advantages to ISAs is that they remove all worry about tax, particularly if you save lots. Otherwise you really do have to pay attention to trades, and if you build any significant sum, you must declare it and track trades etc which is really painful.

Easier just to save in an ISA and not worry about tax, that’s why they’re so popular.


(Jim) #7

With a generous yearly limit (20k) I would certainly try and fill an ISA ( Cash / Stocks / Innovative / LISA ) before using any other account type.

Disclaimer : Future tax regimes may change…


(Dave Smith) #8

We could do with ISA is in place before the start of next tax year, anyone who has already put money in another stocks and shares ISA wouldn’t be able to add to one this year anyway. But next years allowance could be going in Freetrade


(Alex Sherwood) #9

That sounds like a plan :thinking:


(Chris) #10


(Gareth) #11

I’m also holding out for the Android + ISA, but if ISA’s come a long way after the Android app then I might go for a GIA to start. If you do invest within a GIA but stay within the 10k CGT and 2k Dividend allowance, do you have to do any tax stuff for HMRC? I really don’t want to have to do self assessment.


(Jim) #12

As ever depends… Not for those two income thresholds alone, but other factors may hook you in ( Child Benefit with 50k+ salary for example )


(Denislav) #13

I do agree here, it does sound like the best plan. I mean at least for it to be a goal but if it does not work by then…


(Gareth) #14

Hmm, thanks for the think. I think I should be OK then just with a GIA.

@alexs Just in case, does the app include tax information if I do end up going over the limits? Or do I have to keep track of my investments to know how much tax I owe?


(Vladislav Kozub) #15

He is now @alex.s :slight_smile:


(Alex Sherwood) #16

Thanks Vlad, sorry for the confusion Gareth.

We give you all of the information you need but you’ll need to keep track of how close to this limits you are at the moment - obviously once we offer ISAs (& SIPPs), that’ll make life a lot more simple for you :soon:


(Gareth) #17

Ok thanks @alex.s , how long do you estimate before you’ll be able to issue an updated road map with timelines for Android and ISAs? As others have said, knowing if it will be before the next tax year will be super useful.
Cheers also @Vlad


(Jim) #18

@alex.s @Viktor Out of interest what’s the main blocker to Freetrade offering an ISA?


(Gareth) #19

There isn’t a blocker per se, Freetrade has already been approved by HMRC to offer ISA’s: https://freetrade.io/blog/we-are-approved-to-provide-isas/
I believe they currently want to focus on getting the App release, then they’ll switch their focus.


(Viktor) #20

Main blocker? We are a super small team! I’m very proud of what we shipped with basically a handful of people.

Our team is growing quite quickly though. :point_down:

If you’re an engineer, product designer, or customer ops expert, there’s never been a better time to join: https://freetrade.io/jobs

As @Gaz92 says, HMRC approved us to provide ISAs. And we definitely plan to have ISA as soon as possible.

Open roadmap is coming soon. :+1: