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Shares - Do I Need An Isa Wrapper?

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I have a few £k in shares, which forms my pension ... when is it advisable to put them in some kind of ISA wrapper? I am a few k away from being in the higher tax bracket in terms of salary. Thanks.

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The income tax position is not especially relevent given the recent change to dividend income taxation but having shares in an ISA protects you from CGT on their sale. If you plan on them making substantial gains between now and when you come to sell them, and I'm sure you hope they do, then holding them in an ISA is a good idea.

If you aren't already using your ISA allowance then putting them into ISA has no downside really.

(I'm not an expert on this, happy to be corrected by other posters)

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That's my understanding too, with a Stocks and Shares ISA.

• No Capital Gains Tax* (*Tax laws may change)

There's a Budget change to dividends, which dampens the need for Stocks and Shares ISA from dividend perspective. However I still prefer Stocks and Shares ISA.

http://www.which.co.uk/money/tax/guides/tax-on-savings-and-investments/dividend-tax/

I got most members of my family (brothers and sister) to open a Stocks and Shares ISA last year. Same place now charges at £200 one-off opening account fee.

Family (renter-savers) normally try and get as much of their savings into their Cash ISAs (saving approx £500 per month).

Their (my) plan now, is to each open one of those Help-To-Buy ISAs (when they are introduced) and max that out to the low-limit, and put the rest of their savings into Stocks and Shares ISA.

The monthly maximum contribution from savers into a Help to Buy Isa will be £200, following an initial deposit of up to £1,000, with the government adding £50 a month at the most. The accounts will run indefinitely once opened. But if someone accumulates £12,000 over that time, a maximum of £3,000 will be added by the taxpayer.

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Also, whilst I've not fully checked if this is accurate, it's something to keep in mind.

Just a note though about the FSCS limit of 50k on a stock and shares account. Remember that some online trading platforms bank with the same company so you may not be covered.

Also you can move part of your holding/cash between brokers within your isa providing it is previous years allowances and you use a proper transfer form.

Actually the position *appears* to be this

See #15

http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-deposits/

Edit update: My own Stocks and Shares ISA seems to be £50K protection limit. Not that I have much invested, but just keeping an eye on limit if I get longer term performance on investments.

We are a participant in the UK Financial Services Compensation Scheme ("FSCS"). As you have been categorised as a retail client, you may be able to make a claim on this scheme if we default in our obligations to you. Compensation of up to 100% of the first £50,000 of assets held is available to eligible claimants.
Edited by Venger

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Quote


We are a participant in the UK Financial Services Compensation Scheme ("FSCS"). As you have been categorised as a retail client, you may be able to make a claim on this scheme if we default in our obligations to you. Compensation of up to 100% of the first £50,000 of assets held is available to eligible claimants.

May be able and up to .....those weasel words do not instil confidence


I have been very sceptical of all the FCSC protection schemes since the word guarantee was removed

Edited by long time lurking

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Yes, put something in an ISA. Around about your maximum ISA allowance each year. It may or may not matter now, but a rule change or payrise or other change to your circumstances could change that.

One downside to an ISA is that you lose your automatic shareholder rights, like attending meetings and voting. If that matters to you, you'll want to check your ISA provider's policies. Do they facilitate you exercising your rights? If so, is it free to you or is there a charge?

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