Stock & Shares ISA


(Nick Slade) #1

Hey all!

I know Freetrade offer and Investment ISA for £3 a month, but many of you seem to have them with other banks and companies.

Where else other than freetrade do you have one? What are you charged and how does it compare to freetrade?


(Ben) #2

Unless you have substantial earnings why use an ISA? you can get 2,000 divs a year and make 11,700 in capital gains without any tax liability. So those using an ISA are either hoping for a super duper capital gain or have a large ISA balance.


#3

ISA was with Vanguard. Have withdrawn funds now that are sitting in a Freetrade GIA waiting until the new tax year when I will open a Freetrade ISA.
I don’t want to juggle the figures and worry about tax now or in the future so it’s ISA all the way.
Fees wise I will be better off with Freetrade over the long haul as Vanguard charge a percentage.


(Kenny Grant) #4

Or receive dividends or capital gains from other sources.


#5

At any point the government can change tax allowances for dividends and cgt, they could do the same with isa’s but my guess it would be alot harder. My preference is to cover the what ifs if you can and it doesn’t cost much more than alternative accounts elsewhere (or cheaper depending on holdings)


(Rob N) #6

It’s £30 a year if you pay in advance…


(Dave Smith) #7

You can only put a limited amount per year in an ISA, If you save a large pot up first it could take multiple years to transfer it. so if you believe that at any time in the future you might be making 2000+ in dividends or making large capital gains you need to start putting money in now

Think Positive!


(Ben) #8

Absolutely but many investors wont have 20k a year to invest. Most young people will also want a home one day and unless your isa returns beats your mortgage interest it’ll likely be a small portfolio many people will have


(Alex Sherwood) #9

There’s other reasons to use ISAs even if you’re not investing 20k in a year, we’ve explained those here -


(Jeff puckering) #10

What are the other benefits in the article as I just re-read, are you referring to the simple tax admin? If your investments and dividends are below the threshold do they still need to be declared? The 19/20 financial year will be the first time I need to do a tax return so genuine question as I wasn’t intending to get the ISA for a few years as I’m only investing £50 ish a month, so will take a while for me to reach the thresholds…


(Vladislav Kozub) #11

The HMRC website says you only need to declare if your taxable gains exceed your Annual Exemption Allowance (currently £11,700). However, you will also have to declare the proceeds regardless of whether you made a profit or not if you satisfy two conditions:

  • the total amount you sold the assets for was more than 4 times your allowance
  • you’re registered for Self Assessment

Unless you sold assets and gained more than £46,800 gross (2018/2019), you would not need to report it.


(Jeff puckering) #12

Thanks @Vlad helpful as always! @alex.s I guess I’m still non-the-wiser as to why a new investor saving less that £100 a month would need an ISA for a good few years (unless they had some incredible skills/luck)


#13

Another way to think about it is, if a ISA account doesn’t create any extra work, or pose any issues then you might as well use a ISA account?

The other thing about the £11,700 capitals gains allowance is you can easily exceed this if you dispose of a large asset. In which case you would either have to wait another year before you can dispose of your shares, or pay the CGT. While on the other hand if you have the shares in a ISA then you are fine.


#14

If it was that simple, of course it would be a no-brainer. But the ISA costs money; the GIA does not. At low levels of investment, £36 could completely wipe out any gains you make in the market, defeating the point. (Or more likely, it would reduce your % gains by a noticeable amount.)


#15

I say if your circumstances allow let’s all get Freetrade ISA’s and support Freetrade in this awesome app / product they are developing and help them grow and our Freetrade ISA portfolios grow long term (TAX FREE in our ISA’s) ! :boom::freetrade:


#16

A new investor saving so little should not, at least not with Freetrade.

If you just want to keep things simple and not worry about tax issues and are dead-set on starting out with an ISA, you’d get one with a platform that charged a low % platform fee instead of a fixed cost. I’d recommend Vanguard as the lowest cost.


(Jeff puckering) #17

This exactly, if I stick to my average of £50 a month the £36 fee is 6% :grimacing: which is why I was pretty certain I wouldn’t have use of an ISA for a good few years. Until I started to read this thread anyway!


#18

For my sins I’ve an ISA with Hargreaves Lansdown who charge 0.45%.

Why? I wanted to buy into Fundsmith. But going direct with them was £100pm minimum which at the time was too much (HL minimum is £25pm). The Fundsmith charge is 1.05% direct or 0.95% via I class shares which are available through platforms like HL. But since the fees are taken from income it’s hard to notice.

But I also prefer open ended funds like this to ETFs, which you can’t do with Freetrade.

But now I don’t want to transfer out because that’s expensive, for now at least.


#19

I totally see where your coming from Jeff. You know what’s best for you.
6% will be on a sliding scale downwards as your portfolio grows.


#20

I probably missed some context, as I thought it was a general question about ISA accounts. Of course only Jeff knows best whether to go for a GIA or ISA.

To further complicate matters, longer term investors are better with ISAs as the allowance is only for the year and the fees will be less impactful as the portfolio grows. But completely get your point of view.