3

Normally, the way to fund a Stocks and Shares ISA is to transfer money in, taking care to stay below the annual limit, and then purchase the stocks or funds from within the ISA.

What happens, though, if you currently hold some shares outside of the ISA?

As long as their value is below your remaining allowance, are you able to transfer the existing shares in to be held in the ISA? Or, is your only option to sell them, with any fees and faff that entails, pay the money in, and then repurchase the shares (with associated fees)?

|improve this question
  • 1
    For what it's worth, US readers should note that deposits to an IRA or Roth IRA must be made in cash. One can convert from IRA to Roth IRA, but new deposits, cash only. Withdrawals may be made in-kind, no sale required. – JoeTaxpayer♦ Feb 19 '14 at 15:40
  • 1
    @JoeTaxpayer Heh. Then I'll add, FWIW: Canadian readers should note that contributions to an RRSP can be made in-kind, but the investment will be deemed to have been sold, which may trigger capital gain taxes that must be paid. Else, if the deemed sale would result in a loss instead, the capital loss cannot be claimed. – Chris W. Rea Feb 20 '14 at 1:09
2

You can't actually transfer shares directly unless they were obtained as part of an employee share scheme - see the answers to questions 19 and 20 on this page: http://www.hmrc.gov.uk/isa/faqs.htm#19

Q. Can I put shares from my employee share scheme into my ISA?

A. You can transfer any shares you get from

  • an HMRC approved SAYE share option scheme run by your employer (that is, a savings related share option - 'Sharesave' (or profit sharing scheme)
  • a Share Incentive Plan

into a stocks and shares component of an ISA without having to pay Capital Gains Tax - provided your ISA manager agrees to take them. The value of the shares at the date of transfer counts towards the annual limit.

This means you can transfer up to £11,520 worth of shares in the tax year 2013-14 (assuming that you make no other subscriptions to ISAs, in those years).

You must transfer the shares within 90 days from the day they cease to be subject to the Plan, or (for approved SAYE share option schemes) 90 days of the exercise of option date. Your employer should be able to tell you more. Q. Can I put windfall or inherited shares in my ISA?

A. No. You can only transfer shares you own into an ISA if they have come from an employee share scheme. Otherwise, the ISA manager must purchase shares on the open market.

The situation is the same if you have shares that you have inherited. You are not able to transfer them into an ISA.

|improve this answer
0

My broker offers a service to transfer the shares where you only pay commission once. Therefore say if standard commission is £10, then you don't end up paying £20 (10 for selling + 10 for buy back). You'll have to be okay with the spread though.

Hope this helps.

|improve this answer
  • 1
    That'll only work if the shares are easily trade-able though, not so good for ones with restrictions / illiquid market etc – Gagravarr Feb 19 '14 at 16:34

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.