We need your help! Fractional Shares in ISAs

Freetrade Chat đŸ”„
244

Was the any news in this budget regarding fractional shares and ISA’s.

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245

The only thing in the budget was a brief mention that the Government are working to put in place legislation by the end of summer.

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246

That is too long for my liking. I should have brought more US stocks last year, before I played it safe and brought all the fractionals into full shares.

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247

Hi all,

Really dissapointed to find out today having updated the app that we can no longer buy fractional shares in our ISA. The emails go to my wifes account so seems we missed all this ( no notifications in the app unless I missed them!?) Wasnt obvious!!

Would someone be able to clarify exactly what the situation is for existing fractional shares? Rounding up would be preferred as some are in the red and would be easier ( and closer) to round up than down but it seems only possible to round down. Do we NEED to do this before the new Tax year or is it just that we can no longer buy more?

Am i really looking at rounding down $1k shares sat at .9, paying an FX charge and then paying another FX charge to buy 1.0 share again
? Can Ft not give some sort of FX charge amnsety for affected customers as a gesture given the situation?

Thanks,

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248

Technically you dont need to do anything,
but since they removed the ability to buy fractionals your only option is to sell down the fractions and buy whole shares back. Otherwise FT will probably force sell or move them to GIA come April

Zero chance this updated legislation from HMRC before new tax yr imo.

Doubt FT will offer to waive the fx fees. you can ask.

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249

This is scaremongering at its finest, what information do you have to even consider this is what FT are planning?

250

per FTs email:

If the ISA rules are not updated before the start of the new tax year in April, we may need to take further steps to remove fractions in ISAs. If we need to do this we will contact you with further information soon.

251

So it doesn’t say the only option would be to ‘force sell’ Users may be offered the opportunity to move up one whole share as a first alternative.

You can’t move shares from an ISA to a GIA also.

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252

Not what I said.

I said they will probably offer users a transfer to GIA or sell (so the cash stays in ISA). This is logical from the email. Doubt they will offer round up. I think FT have already mentioned here that it is tricky to implement due to price movement.

FT have offered to move my holdings to GIA before when they were no longer ISA compliant (MLPs)

253

Hi All

Just to clarify we are not taking any additional actions to remove existing fractions before the new tax year. We’ve considered the government’s plans to update the rules, the impact on customers, and our position in coming to this conclusion.

Best
Alex

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254

Hi @acamp

Thanks for the update but what exactly does this mean for customers with existing fractional shares in their ISA holding? E.g. If I do nothing, will my ISA still remain tax free in 2024/5?

If there is no need to sell existing fractions then i would rather not unless there is a downside?

Thanks,

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255

It would of been better if they pinned a message like they always do when crowdfunding etc and sent out more information as it really did get missed by many and is an essential part of what makes FT good.
I get tonnes of “free share” messages but only 1 for a vital change in what your subscription now offers. Not FT’s fault at all but not the best handling of the comms on the issue.

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256

Yes. The government has announced plans to change the ISA rules going forward and HMRC has stated publicly that with regards to any fractions in ISAs prior to that, they would resolve the matter with the ISA manager (that’s Freetrade in this case).

There’s no need to sell any fractions in your ISA unless you want to do this.

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257

Any plans to allow users with fractional to round up? To get it all nice and whole for hmrc to have an easier life?

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The way you can do this (if it suits your needs) is to buy a whole share and then sell down the fractions. Its not a perfect solution but if you’re buying a fractional share it’s difficult to buy the right amount given market movements and so you’ll likely end up with slightly less or slightly more than you intended.

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259

Sounds painful and also knowing my luck I’ll end up again with a fractional share if I tried to do the buy and sell process you mentioned.

Guess, the other thing to consider is the added double FX fees.

Is the whole fractional share and hmrc likely to change?

260

What’s the updated guidance or expectation on Fractional Shares in ISAs?

261

No update yet by the Government. The last official correspondence by them is probably

also the below (referenced from the above):

edit: To be honest, considering it is going to be an election year, I wouldn’t be surprised if it ends up being kicked further down the road since it require legislation. (If it sooner though, then happy days)

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262

Hi @CleanTech thanks for the question.

Since those statements highlighted by @JimmyJ the Government has committed to bringing forward legislation towards the end of this summer to make the required changes to permit fractional shares to be held in an ISA. They announced this earlier in March during the Spring Budget.

We’re continuing our work with the Government and key decision makers as they draft these rules. We’re aware that the looming election may cause a delay and/or distraction, so we’re remaining persistent to ensure this doesn’t get dropped (as best as we can!).

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263

If/When the legislation gets passed are there any plans to extend fractional investing into ETFs?