Moving to an isa from a basic account

Hi all.

Started investing in January this year (and what a time to get involved!)

To my mind, it seems that while I’m way off the £12k capital gains tax allowance, there is absolutely no point paying for an isa. Correct?

If (when) I start to make some decent returns I could transfer all my shares over to a freetrade isa without any hassle or cost. Is that the case?

Also is there any reason why I might want to look at isa’s in other places instead of freetrade?

Many thanks

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From what others have posted, they have had to sell all their positions in their normal account and buy them back in the ISA account. I don’t think it can be done automatically.

This man is correct.

You will have to sell all your holdings, open an isa, transfer your cash from your normal account to your isa (3-5 days), and buy them again in there.

Bummer. In that case I suppose now is the best time to come out of the market for a week.

Is it as good an isa as anywhere else?

I guess this move will affect dividends too?

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An stocks and shares ISA is an stocks and shares ISA, as far as I am aware. But I am not a financial advisor. What makes it is, is what you stick in it.

Market volatility seems to lag for some time, or so I’d imagine. You may as well cash out and sit in the side line until you’re comfortable getting back in. When I transferred cash from my normal to my isa account, it took 2 days - faster than I expected.

What do you mean by that? Taxes won’t be withheld in a basic account either, so dividends should be the same.

Sorry, wasn’t clear.

As far as dividends go I’d have thought your payout would be made on condition that your money has been in the pot for the duration of the time. Otherwise, I’d stick everything into a high div payer for a week before they distribute , collect and rebalance my portfolio till next time.

So if I have to sell all my shares to move them over to an isa I assume I’ll waive my right to this round of dividends?

Even with an initial small portfolio I would always invest in an ISA. Growth and compounding dividends will grow your pot along with any regular contributions you make.
I personally would throw my marker down in an ISA with the expectation my portfolio will grow and grow.
Sleep like a dream without all the potential tax headaches :blush:

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I understand, but as far as holdings I already have, and will collect dividends on as it stands, if I have to sell my entire portfolio, currently in a basic account in order to move them to an isa, and therefore being out of the market for a few days before buying back in from the isa, should I expect to receive dividends from a companies next release or will I have to wait to hold for an entire quarter (or whatever time span between dividend issues that a company makes)?

It’s frustrating that I have to pay stamp duty again AND risk the market turning and therefore selling low and buying back high, without also losing out on the next issue of dividends from my holdings, because my portfolio took a proverbial fag break. Am I right in assuming these will all be the cost to me for switching to an isa? Knowing this will help me time the transfer to limit the damage.

Had I known better when I started, I’d have had an isa from the beginning. But that’s learning I suppose.

This is not advice. Personally, regardless of the dividend dates I would sell and get my investments into an ISA now and get my long term investment strategy to work in a tax protected account.
You could start adding new money within the ISA and move anything else when you feel comfortable.

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That’s not quite how it works. What you want to be looking for is the ex-dividend date. Providing you sell and buy within that date you’ll still get your dividend. Also if that date has passed, but the dividend is not paid, you can sell your stock and still get the payment.

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That’s probably good “not advice”.

Regardless, I’m still interested in how the dividend payment works. ITV have announced 8p divs on a share currently costing 98p. That’s pretty good…so sell everything, buy 100%itv, collect the dividends and sell back within the space of a few days… I’d be dreaming, right? You need to hold for an entire payout period and only on stocks you hold for that period will you get a payout? Am I correct?

Thanks for your responses everyone.

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Again that’s not quite how it works.

Ex-dividend simply means the day the stock trades excluding its dividend (hence the name!). This generally means the stock loses the value of the dividend from its’ share price upon reopening.

So if you were to do this, you would probably end up with what you put in.

See: https://investinganswers.com/dictionary/e/ex-dividend-date

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No you would not be dreaming. That is exactly how it works. You only need to hold the shares on the ex dividend date. The issue however is that your itv shares should drop by 8p on this day ± market sentiment.

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I am in exactly the same predicament!

I started investing using Freetrade basic account back in February, the new tax year started and I opened the Freetrade ISA not knowing I couldn’t just transfer all my shares to my ISA…

I have had a chat with the Freetrade team who have clarified this, you’d need to sell everything in your basic account and re-buy in the ISA account.
To which I said surly you come across this on a daily basis? They hinted it could be something that’ll be offered in the near future…

How can we start a vote on here??

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“Hinted” may be different to reality, I’m not sure how it all works, however I’d be up for this as I have a few stocks that would benefit from being transferred in the manner you so speak. Perhaps apply this question to a new “vote” request in the forum.

Maybe if this thread gets enough comments and we tag the dev in this might become more clear

I’ve added a vote thread, please utilise :wink: