Hey guys Iam new to all this so please be patient. I have had an account with freetrade for about 1 month now. I currently own 30 dividend paying stocks. My goals is to retire off the dividends in the next 15-20 years. Now would you guys recommend me moving all my money and stocks to a freetrade ISA account with the same strategy. Iāve heard itās tax free? Iam aware I would only be allowed Ā£20000 per year max to invest. But with the strategy Iāve explained is it a no brainer to use an isa instead? Whatās the pros and cons? Thanks in advance. Remember Iam a noob so explain like your explaining to a 4 year old 
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An ISA is a no brainer - provided you donāt want to invest more than Ā£20k a year in to this or a savings ISA. All those divis and profit on shares will be 100% tax free, even when you eventually draw it out.
If you leave it in a standard account then you will be liable for tax on any divis and any profits you make when you sell a stock. Although these might be well below the payment threshold now, as your portfolio grows it wonāt take long before you are liable 
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+1 for no brainer. If you are able to, fill up to your max of Ā£20k first and then the rest in a standard investment account.
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Edit: please ignore this post. I made a confusion with SIPPās as Sendu noted
In addition to what @scudulike said, please also have under consideration ISAās tax wrap are currently capped at around Ā£1M. Meaning youāre liable to pay taxes after you get there. Itās still a no brainer. I hope you get to the point you have to worry about it 
Are you thinking of pensions (SIPPs)? Thereās no limit on the amount that is tax free in an ISA.
When my portfolio gets to Ā£1m I will happily pay tax on the excess 
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Maybe I misread. Let me check
Itās not quite a no-brainer in terms of timing. For it to be worth the Ā£36 ISA account fee, you need to be earning enough dividends for your tax on those dividends to be more than Ā£36.
The dividend allowance is Ā£2000, on which you pay 0% tax. If youāre in the lowest income tax bracket, youāll pay 7.5% tax on anything above that amount.
So when youāre earning over Ā£2,480 in dividends a year, itās definitely time to switch to the ISA.
You might consider switching earlier if you total holdings are approaching Ā£20k in value, so you can easily stuff it all in to an ISA in one go and not worry about exceeding your limit in the future due to transferring everything in your GIA to the ISA.
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I think the more important benefit here is that all assets within an ISA are exempt from capital gains tax, so if youāre investing any substantial amount (e.g. more than say Ā£1k) itās a no brainer!
Brilliant thanks guys so I think the ISA route is the way forward for me. I did open an investment isa with Moneybox about 3 months ago then closed the account. When can I open the freetrade new ISA?? Also can I not have the two accounts running at the same time? I went on freetrade ISA and it noted that I had to sell everything first before opening an isa.
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Amount still affects if itās a no-brainer.
CGT allowance is Ā£11,700.
Dividend stocks arenāt really known for their growth. Letās be incredibly generous and say your whole high-dividend paying portfolio managed to also grow 7% in 1 year.
Your current portfolio value would have to be in the region of Ā£167,000 before youād start paying capital gains tax. This is 2 orders of magnitude more than Ā£1k!
You really donāt need to worry about an ISA for a long time unless youāre very rich. If you want to throw away Ā£36/yr when youāre just starting out with small amounts of investment just for convenience, thatās up to you.
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Iām afraid this seems to lean on a bit of a common misconception.
Your capital gain isnāt measured by how much your portfolio gained within a year, it measures the whole amount your investments grew from purchase to sale. Thatās really important. If you buy an investment in 2010 and sell it in 2019 and it grew by Ā£30,000 over that time, but only Ā£5000 from 2018-2019, you still have a capital gain of Ā£30k. Youāll be taxed on that minus the around Ā£11k allowance.
Plus you canāt necessarily transfer your portfolio into an ISA when itās convenient for you. Firstly, you can only put in a max Ā£20k/year and secondly you have to put it in as cash.
Even using a special non-ISA to ISA transfer service, your broker still sells your investments and then re-buys them. So you still are liable for capital gains tax in that scenario.
If you waited until youād built up to Ā£100k portfolio before ISA wrapping, firstly youād need several years to put it into the ISA. And every time you sold the investments to move the money into the ISA, youād incur capital gains tax on the sale. And if that was a portfolio youād started a long time ago, the capital gain could be very big.
Finally, the ISA is even more relevant for dividend investors as all your dividend income will be UK tax-free. If you get dividends outside an ISA, your threshold before you start paying income tax on them is only Ā£2000.
To sum up, ISAs are definitely not just relevant to the very rich - theyāre a relevant consideration to almost everyone investing for the long-term.
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Thanks for clarifying; I did indeed oversimplify with a 1 year example.
If you were doing really well with index investing, you could be looking at 150% growth over 5 years. So an initial investment of just Ā£8,000 could take you over the CGT limit.
The longer the timeline, or the better you do, the less youād need to initially invest.
But you can just check every year to see where you are. If your growth looks like itās going to take you over the limit, thatās the time to switch. As I mentioned, for convenience you could switch when your current value is approaching Ā£20k, so you can do a single-year switch.
My point remains that thereās no point wasting money on the ISA until itās worth doing the switch.
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Thanks Toby. This is really valuable.
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So in a nutshell until my dividend 15% TAXES reaches Ā£36 per month thereās no rush to switch because Iād be wasting Ā£36 per month on the ISA monthly fee.
Per year, not per month
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15%? See Tax on dividends: How dividends are taxed - GOV.UK for the tax percentage youād pay on dividends over Ā£2000/yr. Itās either 7.5%, 32.5% or 38.1%.
If you donāt want to worry about tax percentages and keep things simple, just switch when you start to approach Ā£2000/yr in dividends.
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Iām not sure our discussion is helpful in clarifying things for the OP. Let me try to summariseā¦
In a nutshell, people generally think that itās a good idea to start using an ISA when you start investing for the long-term. However, if youāre really careful and diligent, you can theoretically save on the ISA fees by waiting until your capital approaches Ā£20k.
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You need to consider other sources of income here too e.g. selling a second property could take you over the capital gains threshold. Thereās more details here: Capital Gains Tax: what you pay it on, rates and allowances: Capital Gains Tax rates - GOV.UK.
HMRC gives some useful information more generally about the pros & cons of Stocks & Shares ISAs here: Personal tax: Tax on savings and investments - detailed information - GOV.UK.
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