ISA transfers are here ❤️

We’ve just started rolling out the first version of our ISA transfer service.

Now almost everyone with an ISA can move it over to Freetrade and grow their long-term investments with way fewer fees.

A reminder of the bumper benefits of an ISA:

  • You pay no UK capital gains tax on your investments
  • You pay no UK income tax on your dividends*
  • You can put in and invest up to £20,000 each year

It’s one of the best, most tax-efficient ways to build investments over the long-term.

*You do still pay US tax on US dividends, but these are deducted at source with zero hassle

Let’s dive into transfers!

What can I transfer?

You can currently transfer:

  • An existing stocks and shares ISA with another provider
  • A cash ISA with another provider
  • An innovative finance ISA with another provider

You can’t transfer junior ISAs or lifetime ISAs (yet).

How do I transfer?

Simply enter your email into the form here to express your interest in a transfer. Within two weeks, our ops team will be in touch to kick off the process.

There will be a bit of physical paperwork to change hands since virtually all ISA providers demand paper forms to action transfers, but our saintly ops team will guide you through. :innocent:

We’re currently targeting four weeks from the time we contact you to complete the transfer. The timing might vary based on demand.

You can transfer an ISA to us whether or not you already have a Freetrade ISA. If you have a Freetrade ISA already, the transferred ISA will be merged into it. If not, your transferred ISA will start a new, better life as a Freetrade ISA. :heart:

Why should I transfer?

You’ll be able to make Freetrade your main, sole ISA.

So firstly, that means commission-free investing. You’ll be able to invest new contributions and re-allocate your current investments with no commissions or fees.

Unlike many ISA providers, we don’t charge any annual percentage fee on the investments you hold in our ISA. We only charge a flat £3 per month (starting late 2019 — right now the ISA is totally free). Why is that good for your ISA?

If you’re building your ISA over the long-term, a percentage-based fee would grow as the value of your ISA does. Even a relatively small 0.1% annual charge would result in £100 yearly fees on a £100,000 ISA.

But £100,000 sounds like a lot, right? Over 20–30 years of saving and investing, it’s actually not.

If you managed a 7% average investing growth per year, started with £5000 and added £3000 each year, you’d hit £100,000 in year 19.

With a Freetrade ISA, your fee will be the same, small flat amount forever. £3 — about the price of a coffee a month (depending on how fancy your coffee is).

We won’t have any more work administering your huge ISA in, say, 20 years time than your current one. So why should you pay more?

We also don’t charge any entry or exit fees to transfer in or out. If you want to go, we’ll miss you, but we’ll never try to stop you with a charge. Maybe a song. But no charge.

Finally, you’ll be able to fully manage your ISA in a beautiful mobile app. :sparkles:

Although the transfer service is open to everyone, it’s still very much an early feature, effectively in testing mode. Over time, we’re going to enhance and automate the process and ultimately bring it into the app.

We’re really excited to give everyone the opportunity to make Freetrade their single, central ISA.

Freedom!


Freetrade does not provide investment advice and individual investors should make their own decisions or seek independent advice. The value of investments can go up as well as down and you may receive back less than your original investment. Tax laws are subject to change and may vary in how they apply depending on the circumstances.

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:eyes:

All very exciting.

Ooooooooooh. Is it “in specie” or are the assets liquidated and transferred over as cash to be put into the ISA account?

So LISA’s maybe in the future. That’s interesting.

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I have FTSE100 companies in my Halifax ISA which aren’t available on FT yet - how would that work? Would I have to liquidate them?

The original post isn’t clear on this but I assume it will be a cash transfer. Worth noting that in this scenario your money will be out the market for a period of time ( this could be good or bad … )

Great news. Unfortunately, as much as I’d like to transfer my Isa, Freetrade’s poll tax-style pricing model – which favours the rich over the poor – would cost me about 1,000% more than my current provider.

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If the stocks aren’t on Freetrade at time of transfer, you’ll have to sell them beforehand and move the value as cash (still in an ISA wrapper).

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I guessed as much. That means timing will be everything, as they are high divi stocks. Also most of them are fractional shares, so they will need rounding off too. With Halifax charging £12.50 a trade this may end up being a fruitless exercise.

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So does this mean lifetime isa’s are definitely planned sometime soon…???

Some confirmation of this, one way or the other, would really be appreciated please!

I have one cash and another S&S isa, excited :clap:

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I always wanted to get in to stocks and shares, about 5 years or so back. But this was the reason why I never did. £12.50 for a trade wipes off an insane amount of profit, if any. By the time you buy and sell a stock or share that’s £25 gone. I always used to find it ludicrous. It certainly used to be catered for the wealthy

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Oh how I’ve been longing for this day!

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What would happen if you tried to initiate transfer of an ISA that contains holdings not available through Freetrade?

Would they get sold as part of the transfer process with the proceeds transferred to Freetrade as cash, or would those holdings just get left at the old platform with only the compatible holdings transferred over?

I believe old holdings that are not available within freetrade have to be sold and the cash will be transferred still within the tax wrapper into your freetrade isa.

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My question is whether that will happen automatically as part of the transfer?

They wouldn’t. As part of our transfer process we’d take a look at what lines of stock we can transfer and remind you that we can’t move over any stock we don’t have that you don’t sell to cash.

Once initiated how long does it take for a transfer?

Too many factors. Impossible to say with certainty. I once did a transfer from HL same day - almost instant. That was because of the transfer service and systems in place in that particular instance. That said I one did a transfer from a less big provider and it took weeks. Ouch!

Boring tax question time - I opened my stocks ISA with my bank this tax year (before I found out about FT :confounded:). Can I still transfer my ISA in FT this tax year or do I need to wait for the next? A bit unclear as rules say we can only open 1ISA account per annum