If I were to transfer £20K from my regular Freetrade account to the Freetrade ISA, maxing it out, to avoid CG, can I then go on to trade using those funds from within the ISA?
Say I bought a number of shares (all £20K worth) from within the ISA wrapper and they gained 20%, I then realise a £4000 gain by disposing of the shares and go on to re-invest in another set of shares - is this allowed? Would this not breach the £20K/yr ISA limit?
And I take it doing this wouldn’t incur any CG tax?
Yes that is correct. An extreme example being:
You put £20k in 20/21 financial year and leave it alone as cash.
You put another £20k in 21/22 financial year. You now have 40K you can trade with in this year.
I believe the £20k limit starts again each financial year with no rollover.
So if you only invest £15k this year, you don’t get £25k next year. It resets to £20k to invest that financial year.
I think that if you put 20K in the ISA account, and you use only 15k, the other 5K you can use them the follow year…beceause all the 20k are already in the ISAaccount
If you put £20k into the ISA, then you have put in the full limit. It is your choice once that £20k is in there how much of it you invest. So if you only invest £15k of it and leave the remaining as cash within the ISA I believe that is fine. You have put the full amount into the ISA.
What you CANNOT do is put £15k cash into the ISA, and then expect to put £25k into the ISA the following year.
If I were to transfer £20K from my regular Freetrade account to the Freetrade ISA…
You may transfer £20k of cash but you can’t transfer £20k of shares. You would need to sell them first (thus potentially triggering a CGT liability) and then transfer the cash.