We need your help! Fractional Shares in ISAs

Here are all the changes:

Confirmation fractional shares are allowed:

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Nope, no timescale has been given though. Also only refers to certain fractional shares so a possibility that only some types could be. :neutral_face:

Iā€™d reserve judgement until anything further has been announced.

The full statement can read here:

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from the gov site

It seems fractional share story is not a done deal. ā€œintends to permitā€ is the term used.

Like having more than 1 isa account per year from same type and not having to reapply annually.

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Share contracts, not shares. As in understand that wording thatā€™s talking about how fractional shares are held. Not that only certain shares can be fractional

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I wonder if these fractions will extend to ETFs.

Surely the ISA changes would only come into play from the new tax year.

This may resolve the matter as of 2024, but the underlying non-compliant issue remains until that point and I assume HMRC can act retrospectively up until that date.

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Agreed

While Iā€™m generally speaking please to hear that finally the right things are being discussed in the political sphere, and this could well be the first step to this problem miraculously going away.

I do agree that its not officially over yet.

If HMRC choose to think differently and choose to go ā€˜all inā€™ on thier way of looking at things, we could still ultimately be in the same position.

Also the possibility of a delay until perhaps as late as the new year or new tax year leaves a bit or a lot of wiggle room in that time.

I intend to remain moderately optimistic but ā€˜ready for anythingā€™ until everything is officially done.

Or to quote a colloquialism, ā€˜it ainā€™t over until the fat lady singsā€™.

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To defend HMRC they were planning on enforcing the rules as they saw/see them. Theyā€™re answerable to the chancellor who has set out his plan which - given it was only an announcement is an autumn statement - lacked some details but this was to be expected.

When the rules get published this is all be remembered as a storm in a teacup.

I was surprised he didnā€™t offer something like a further Ā£XX allowance for investing solely in UK-listed companies. I donā€™t know what difference it would have made but it would signal the right things

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Probably knew the take-up would be low so didnā€™t bother :person_shrugging:

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Also i suspect the admin burden would be difficult to monitor, it would add extra work for back office teams inside brokers and HMRC to make it work.

Sure, it could be done, but sometimes the extra admin isnā€™t worth it.

Sometimes the juice isnā€™t worth the squeeze.

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Letā€™s talk about the Freetrade app options.
I would like a way to easily round up/down my share holdings to reduce the tax liability.
And a way to only buy whole shares for US shares.
Are both of these features coming soon?
@adam ?

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You can buy whole shares only, in US stocks.

After hitting the buy button, use the limit buy option (drop down from top).

Would be good to do it more live time though - rather than at a set priceā€¦I just set a high price and it goes through at market rate right away, when market is opened.

A round up buy / round down sell would be handy.

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Yes. If the Autumn Statement hadnā€™t included clarifying the fractional rules we would have gone to whole US shares in ISAs in December.

Fortunately, common sense prevailed and fractionals did get included, which means we could instead focus on completing the work to ship a Treasury account for you later this month.

Current thinking is to ship whole share/fractional choice along with the new web app early next year.

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Now this is sorted out and the option of adding more on recurring orders is better is the UK fractionals any closer?

This would be absolutely great and would instantly make FT my only stop for shares etc. Being able to effectively make my own ETF would be so great. Now I just do a little to test it out but so many shares do not match the money so you end up with cash each month to then manually sort out.

I think this would be sooooo valued, especially for newer investors, as it really would mean you could set up and forget. At the moment you still have to manually intervene as mentioned above.

Really good steps forward but that last step would make the whole set-up great!

Then I will personally only be waiting for draw down options on SIPP which would also bring over pension money.

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Not sure if this is the right place for this (happy to move it if not) but is there any updates on fractionals for ETFs and UK shares?

I currently have 3 issues:

  1. I want to be able to invest in certain ETFs but theyā€™re quite pricey. E.g. EQQQ.

  2. When I invest I have to pick which ETFs to invest in each month rather than being able to buy a bit of all the ones I hold.

  3. After investing my monthly investment in the ETFs I hold, I am always left with money that typically waits in my account until I top it up again. Iā€™d like to be able to put it all into the market.

Not to be ā€˜that guyā€™ but today I learned about InvestEngine (from a Chris Palmer video on YouTube) who offer fractionals on ETFs. They also show the ETFs county and sector distribution breakdown (another cool feature).

Not bashing FT in anyway, I am a plus member and crowdfunder but it would love to see these features on FT!

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You would be at the back of a long list and not ā€œthat guyā€ :rofl: This feature would do an awful lot for customers but my theory, may be crazy, is they want us to be foreign stocks for the % commission so the UK fractionals are not seen as a good business move. If the case, they should put it into plus only or something.

Invest engine or good, I crowdfunded them, but only ETFs, so the reason I have not moved to them but have considered it. Also, they are a Which recommended app which is always good.

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@Big-g If Iā€™m at the back of a long list, has anyone from FT given a reason or update on this? I mean if itā€™s what people want.

I tried my hand at investing in individual companies but itā€™s a bit too hands on for my style. Thatā€™s why choosing ETFs suits me better. Still have a few individual companies in my GIA but thatā€™s more a fun/gamble.

I do very much like the ease and simplicity of FT and I have a SIPP here so Iā€™m not looking to move but it would be nice to see some updates.

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Hey @Ben91

Thanks for your requests and welcome to the forum :wave:

Fractional UK-listed shares and ETFs are definitely on our road map. Building this functionality is another step in the development of our autopilot feature.

As we have seen with this discussion around fractional shares and ISAs, though, we want to get legislative clarity before we invest in building this functionality.

The statement we secured in the Chancellorā€™s Autumn Statement was a welcomed step forward and we are optimistic that we can get this resolved swiftly.

As you say, enabling fractional trades in ETFs and UK shares would allow you to more easily diversify regular monthly investments. This is a very strong argument in favour of fractional shares and we are looking forward to continuing to work constructively with all stakeholders to get this change.

As soon as we can share anything on this, we will definitely do so!

Alex

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This was requested 3.5 years ago and shouldnā€™t have been very complicated to implement. There was (and presumably still are) multiple API providers that return what they need.

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