Moving GIA Investments to ISA

I currently have my whole portfolio invested into the GIA as FreeTrade had not yet introduced the ISA option when I signed up. I’m not yet at my limit for Capital Gains Tax but would hope to be within the next year or so meaning I’d pay tax. Obviously the ISA has £20k tax free so it would be much better to have my portfolio stashed away in that. Could you make it possible to transfer all our existing holdings into an ISA?

Hey Sam, welcome to the community.

It would be best if you pinged our team in-app or emailed them at hello@freetrade.io.

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I asked that same question in the app today and was told I’d need to sell to cash in the GIA, then contact the team in app again to tell them how much cash I wanted to move to the ISA. They could not move across the stocks.

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Yes, you need to sell you GIA investments to move the cash over. There is a limited number of circumstances where shares can be transferred directly into an ISA and holding them in a GIA isnt one of those.

You essentially want to manually bed and ISA your shares. Which is to sell them all off, transfer the money (request in app) and rebuy all the stocks.

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The feature you are looking for is called Bed & ISA and is a standard feature on most stock trading platforms.

It is not legally possible to transfer shares directly into an ISA (ISA contributions must be cash), so Bed & ISA involves selling the shares in the GIA and then immediately buying the same shares in the ISA. The risk of price changes in between the sale and the purchase is thus minimal.

Unfortunately Freetrade does not support Bed & ISA. I strongly suspect this is because the 0.9% they currently make from the two currency exchanges involved in doing it yourself (for US shares) is a financial disincentive for them to provide the normal Bed & ISA functionality.

Worse still, Freetrade will not transfer your cash from your GIA to your ISA until the cash has settled after the sale (~2-3 working days). I recently lost over £1500 transferring my Tesla shares to my ISA for this reason (the S&P inclusion was announced while I was waiting for the cash to settle… :sob:).

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Bed and ISA has the same fees, investment platforms don’t swallow them. The “Feature” is simply that the platform will take one instruction from you and sell all your shares (at the regular fees), transfer the cash and rebuy all your shares (at the regular fees) in as short a time as possible.

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Even if it was a FreeTrade Plus feature, my exact thoughts were what you’ve said yourself Caesar! I don’t want any risk of losing potential gains. I wouldn’t even mind paying a one time fee to undertake the swap

Sure, except that to Bed and ISA a US share there is absolutely no point in converting USD to GBP and back again. Better just to sell the share and then immediately use the USD raised to re-buy the stock in the ISA.
Though having said that, maybe it has to be converted to GBP to be able to be added to the ISA?

FYI there is already a request for Bed and ISA here.

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Correct, ISAs can only hold GBP unfortunately

Can these topics be merged?

Yh I’m hoping they implement this but at the moment my Plan is to purchase the Share within the ISA - confirm it been Purchase then sell the GIA ones afterwards

Probably a Long Progress but it should obmit missing any gains

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Yes that’s the safe way, if you have the spare cash.

If you don’t transfer within the app (I.e settled cash > ISA), aren’t the shares you sell from your GIA to reimburse what you purchased in your ISA still not be exposed to CGT?

Shares sold in a GIA are always subject to the CGT rules no matter where you put the proceeds of the sale.

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Right, so best to just start using the ISA account until allowance is reached vs trying to sell from GIA, and then ‘rebuying’ the shares in the ISA

If planning for the long term or a gain of over £12, 300 then yes, the ISA wrapper is best.

If you plan on using the money for something in six months, therefore taking it out of the ISA, that may mean you cannot put it back in if you had already used the £20k allowance up.

You also would take a 0.9% FX hit on selling and re-buying. This is why I’m just doing it gradually and only selling stocks in my GIA when I actually don’t intend to re-buy that specific stock immediately just my natural exit point. Then I will move the cash to my ISA.

I personally find it easiest to just withdraw cash from GIA to your bank and deposit into the ISA from your bank account. It’s a lot quicker than waiting for funds to settle and then asking FT team to move funds. (Obviously only if you have the available cash in your bank account).

To put a current timeline to this, I sold shares in my GIA last Monday 1st February at 0910. I contacted in app support on Wednesday morning about 10am as they shares hadn’t settled yet and I asked how best to move the money across to my ISA when it did settle.

The cleared funds turned up before noon on that same Wednesday, but I’ve had no response whatsoever from support, despite being a Plus member and tagging FT staff on here.

So, I’ve been out of the market for a full week and still have no clear idea when the money will be transferred from my GIA to my ISA.

The point of the post is to agree with Simran that if you have cash available in your bank account, it’s best to fund your ISA from there at the moment and pull the settled GIA cash back to your bank account, rather than transfer cleared cash from GIA to ISA. I appreciate not everyone will be able to do that.

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If you’re planning to use the funds in seize months then you wouldn’t be putting it in shares