Transferring Dealing Account to ISA

[coffeeandsmokes]

Evening all,

I'm after some direction or advice. I opened a Dealing Account with AJ Bell last year and ploughed a load of money into 8 ITs; a touch naive perhaps, although luckily in hindsight I would have maxed out the year's combined ISA contributions anyway. This coming tax year I want to put all in my dealing account into a ISA. The problem I have is: the contents can't really be 'transferred', they have to be sold and re-bought - there's a process in place to do this (BED and ISA) but I don't like the idea of it; I'd incur dealing charges, stamp duty and be liable for tax on the 'income' from the sales. My options as I see it are thus:

1. Go ahead with the BED and ISA and suck up the aforementioned costs.
2. Leave all where it is for now, use the ISA for a new stable of ETFs with the dealing account contents sold over time to fund the ETFs.

Unsurprisingly I'm leaning towards option 2; I'm interested in any alternative suggestions anyone may have, or a method for selling off my dealing account.

There will be no big inflows of capital for the foreseeable so I'm a bit miffed that this has to happen. Almost feels like I'm starting again.

VMT

C/S

[swill453]

there's a process in place to do this (BED and ISA) but I don't like the idea of it; I'd ... be liable for tax on the 'income' from the sales.

No you wouldn't. You'd be liable to Capital Gains Tax, but only if your capital gain in the year is more than the exempt amount (£11,100).

There will be no big inflows of capital for the foreseeable so I'm a bit miffed that this has to happen. Almost feels like I'm starting again.

Well it sounds like you are, but that's because you seem to have decided to switch from ITs to ETFs. But I don't see how that's related to the dealing/ISA issue.

Scott.

[mc2fool]

This coming tax year I want to put all in my dealing account into a ISA. The problem I have is: the contents can't really be 'transferred', they have to be sold and re-bought - there's a process in place to do this (BED and ISA) but I don't like the idea of it; I'd incur dealing charges, stamp duty and be liable for tax on the 'income' from the sales.

It's not "income" from the sales you'll potentially be taxed on but the capital gains. However there is a £11,100 capital gains tax allowance -- i.e. you can make up to that much in gains without paying any capital gains tax -- and as next year's ISA subscription limit is £20,000 and you say you want to put all of your dealing account into an ISA, then if you have managed to turn less than £8,900 into £20,000 in a year then you should let us all into your secret

I don't know about AJ Bell but many brokers offer a Bed'n'ISA deal in which they only charge one set of dealing fees (e.g. only for the sale, giving you the re-buy for free) and, sometimes, even talk to the market makers to get you the minimum possible spread. If no other AJ Bell users report on that here, call up AJ Bell and ask them.

[coffeeandsmokes]

Super stuff, many thanks.

I'm along way short of hitting the CGT threshold,TBH I hadn't even looked at what the threshold was, just guessed that the Chancellor would want his share.

AJ Bell BED and ISA does only charge the dealing fee for the one of the two transactions, but I'm still a bit put out by it. However, them's the rules.

As for shifting to ETFs, that's because of the wall of noise about how I'm a madman to be paying fees in excess of 0.5% (I'm well aware that's for another thread) - this would be the time to make the switch.

Again, I appreciate your input. I'll tuck my lip back in and go to bed a happier man.

C/S