Stocks & Shares ISA for small investments?

I am studying tax and never heard of that :grimacing:

Did some reading just now here

From 6 April 2008 taper relief was abolished, and indexation allowance was also removed completely from the CGT computations of individuals and trustees.

From Corporation Tax: removal of capital gains indexation allowance from 1 January 2018 - GOV.UK

Corporation Tax: removal of capital gains indexation allowance from 1 January 2018

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Regarding the Stocks & Shares ISA. Will they be automatically renewed each tax year or are we going to get the option on whether we would like to renew or not?


It sounds like my investing amounts are going to be so small in the first few years that I’d be better off sticking with a basic account and considering the ISA down the line. I think at this point the monthly cost of the ISA would wipe out any earnings.

Thanks for the info.


Hi @Fulforce,

When you apply for our ISA you complete an application form which includes the following statement

“I apply to subscribe to a stocks and shares ISA for the tax year 2018/19 and each subsequent tax year until further notice.”

So it will be a rolling application. There are a couple of things to note on this:

  1. You need to subscribe each tax year for it to roll over and apply in the next tax year without having to complete a new application form again. There is an exception to this, which is the first year (so in the example above 2018/19), if you make an application but do not subscribe in the first tax year your application will remain valid for a subscription in the next tax year.

  2. If your ISA is open with a position we will still charge the £3 a month fee.


A post was merged into an existing topic: ISAs are out :boom: let us know your thoughts here

I’m new to trading so please be patient.

If I take a Freetrade ISA I know I would not pay corporation tax or tax on dividends. But I get a tax allowance on these anyway which I can’t see being exceeded. To go over the tax allowance you need a large ISA achieved over many years.

The only benefit I can see to the ISA is if you plan to use the ISA 20k allowance for say the next ten years, or perhaps you have a large cash ISA you will move.

As I don’t expect to put £20k into a shares ISA for the next ten years there is no need to get the ISA and so save the £3/month fee.

Am I missing something?

If you get some big winners or are in this for the long term, you will probably look back and kick yourself for not paying £3/month. Just the ease of not having to keep track of dividends, capital gains etc., not having to file related taxes …


Totally agree but would stress even more, the first and worst mistake you can make being in the UK with buying stocks is to NOT buy a ISA account!!! NO TAX - some of the very best words to ever hit someones ears, the words “NO TAX”.


What you are saying and your concerns are all valid.
I think it’s important to understand what investment scale we are talking about since you mentioned that you will not fill the £20k quota.

So, you’ll pay £36 per year for the Freetrade ISA.
If you have £1000 invested then this is effectively equivalent to a 3.6% fee which should ring alarm bells - this is higher than any fee you should ever be happy to pay when investing, especially since on top of this you might have FX fees, stamp duty, fund fees etc.

However, if you have £10.000 invested your fee all of a sudden drops to 0.36% - very reasonable even taking into account the other fees on top you are likely to encounter.

This is very basic, it doesn’t take into account how much you add to your fund next year, the year after etc.

Only you know which ballpark you will be operating in - if you take the above principle you should be able to make a basic assessment as to whether or not the ISA is for you.

You could always start with a basic account and if your investments are doing well enough / your pot grows you can switch that to an ISA.

As a general comment seek to fill the ISA as much as you can each year. We all pay taxes on taxes on taxes. Make use of the one tax break that’s out there - no one knows when this might change.

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Can I check something…

You could always start with a basic account and if your investments are doing well enough / your pot grows you can switch that to an ISA.

You can’t just switch your shares from a GIA to an ISA account without selling and buying back? I’m asking here.

@GoAt Yes, you are correct. HMRC rules stipulate that only cash^ may go into an ISA (that is the way the HMRC monitors the £20K limit). Hence shares owned outside an ISA need to be sold** and bought again inside an ISA (This sell and buy is termed as a “Share exchange” or a “Bed and ISA”).

^ Not strictly true - a direct transfer is allowed where the shares were issued to the investor under a schedule 3 SAYE option scheme or some other schemes that are related to employee perks.
**And naturally the sale of the original investment is a disposal for capital gains purposes.


Thank you everyone for the range of views. I agree Koni, the £3 fee is not excessive. My main feeling is I won’t break the capital gains limit for several years, but as others stated if I hold an ISA for a few years there is a chance I will.

I have about a 5 year time scale in mind having had cash ISAs for many years. I have to do a tax self assessment form each year so the reporting to the tax office is something I’m used to.

I guess the decision is around holding a portfolio for several years and it’s growth. At some point I see you will exceed the allowance and there was a good point that the tax situation could change for future assessments. So maybe as a new shares investor growing my portfolio slowly I leave it for a year to gain more experience.

Happy New Year everyone.

@bitflip answered this better than I could have so just my two cents on top:
You are correct, that’s what I did in the past.

Example - I filled my £20k ISA allowance, then invested any spare capital in the GIA.
Once the new tax year started I sold all my shares in the GIA and immediately rebought in the ISA.

Again, being wary of fees here is very important of course and this has a bigger/smaller impact depending on what you are investing in (etfs, US stocks etc.).
In reality the tax advantage of the ISA normally dwarfs these sell & rebuy fees.


Another important factor is if you want the plus universe at some point then the ISA is free :+1: To me the Plus makes it a great deal especially with SIPP combined.

If you have stocks that may/could “go to the moon” then it is a no brainer to get an ISA but if you have safe ETFs or stocks that won’t rocket then maybe a GIA and then sell and rebuy when you have enough built up.

Dividend allowance is only 2K. if you have a dividend portfolio averaging 5% yield you only need £40K to hit that allowance.

I’ve put £60K in my ISA, I’m Making more than the 2K dividend allowance, and if I sold the lot in one year I would be over the capital gains allowance as well. you don’t need 10 years of maxing it out to hit those limits


If you plan to be a long term investor, I’d recommend considering either Freetrades ISA or any other providers ISA if the £3 fee isn’t to your taste.

No capital gains or dividend income needs to be declared to the HMRC and the only taxes you will pay is stamp duty on UK listed shares (not CDI shares, nor ETFs) and dividend witholding tax on foreign shares including from the US market shares.

Of course how you choose to proceed is up to you :wink:


Thank you Dave, I could see the dividend tax allowance can get exceeded. I would also invest enough to max out the ISA each year. Getting 5% return, if I do things correct, does sound very encouraging. I hope in 3 years I get your level of sucess.

Thank you also Samantha. I think I’m looking at 5 years minimum so I guess that’s a midterm investment.

I can see there is strong advise from you all to get an ISA.

I can’t do it until April as I’ve maxed my cash ISA in a fixed account this year so I have a little time to at least start gaining some experience in new type of investment.

I can also see getting a Plus account and leaving £4k in cash earning 3% with then no ISA fee almost makes if a great deal IE £80 interest after tax vs paying £119.88 for Plus.

Hopefully FT doesn’t change its terms and then I guess I need to jump in come April. So decisions, decisions.


I consider myself a small investor. I tend to throw anything between £30-£100 a month into my account depending on outgoings etc. I have however done this since Sep 2019. I was in my late 40’s then and had never had any previous direct exposure to investing in the markets.

I commented on a much earlier thread regarding the Plus account as it was introduced and how I didn’t need what I believed at the time were gimmicks and non necessary features for someone who only invested small amounts . A couple of years on and I’m a fully paid up PLUS account and ISA holder.

One of my very first buys was Sirius minerals (SXX), only held a fairly small amount at around 1.5p per share as I was convinced the UK gov would bail them out of the hole they were in at the time. Didn’t happen, but when it was sold to AA I got around 5.5p for each share and made a profit. That money then went into Greatland Gold at 1.7p and Eurasia Mining at 3.6p (pre Plus days) in my GIA. Both exploded during 2020 and that’s when I explored the use of the Freetrade ISA which I then opened in Jan 21.

I’m not suggesting an ISA is the right thing for everyone but for the price you pay weighed against the potential future costs of Dividend Tax or CGT I consider it a very small price to pay. I now hold 20 AIM stocks in my ISA including around 5k Eurasia and 3k Greatland shares (I did sell GGP at 30p from my GIA but rebought in my Isa at 18p and am still adding at 15/16p) but I’m safe in the knowledge that should any of my other holdings explode at any point in the future , any gains I make are currently out of the reach of Boris and his chums at HMRC.

I try to keep my GIA holdings to a minimum nowadays (although I do still have around 2k EUA shares which could potentially cause a headache if an asset sale or takeover does ever occur) and just tend to use it for the odd speculative punt which in all honesty proved much more difficult to find in 2021 than in 2020 when pretty much everything I looked at turned to gold!!

It is definitely possible to find yourself with tax concerns even when investing small amounts regularly if things move favourably or quickly but in my view by paying for the ISA I have now minimised those concerns.

Hope everyone had as enjoyable Xmas and NY as possible and here’s to a fruitful 2022 for all. :crossed_fingers:

PS I am in no way associated with Freetrade other than an r5/6 investor and user just in case I sound like a salesman :joy:


My view on the ISA fee (as someone nowhere near the CGT limit) is that the ISA represents something on which there is political consensus - I don’t see the goalposts changing for money currently sitting within ISAs.

With things such as the capital gains limit in a GIA I don’t feel that you can necessarily say that - if times are really tough economically and fiscally, is the CGT allowance immune from being slashed? I don’t think so. Far from it, if taxes need to be raised under a future Prime Minister (be that a Conservative successor to Boris, or a future Labour PM, the politics are irrelevant here) it seems a softer target than income tax, VAT or NI.

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