Hi Guys
I think I may have made a big error.
I have opened a trading 212 invest account and put quite a lot of money in over the last 2 months. I have now realised that unless this is in a tax free ISA then any profits will be taxable. Is this correct?
Is there a way of moving the portfolio over to ISA?
Thank you for any help.
Joe
You have allowances - what sort profits are we talking?
Sell and rebuy - youâll end up in roughly the same position.
Invested ÂŁ30000 with zero profits.
If I take it out will I lose the FX Fee? As this would probably equate to around ÂŁ1500.
Thanks for the advise
Thatâs quite a bit, youâll have to move 20k before April 6th and 10k after - providing you have all your allowance left.
You wonât lose that much in fees, FX fees are only 0.15%. If you mean FX impact, yes you will âloseâ that money in real returns, but as youâre buying straight back in youâll be left in almost the exact same position mathematically.
Sell and rebuy - youâll end up in roughly the same position.
Not quite. If your position has grown and your rebuy higher, you will have more stock of said position, so any draw down will be much more significant than your original position.
How will you? If you buy 1 share at ÂŁ4 and it goes to ÂŁ5. You sell it youâll have ÂŁ5
You take that ÂŁ5 and rebuy the stock youâll still have 1 share.
My fault, I should have said your position size has increased at a higher average price.
I stand by the âany draw down will be much more significant than your original positionâ.
So still not a good thing to do, if youâre up any significant amount. Poor risk management.
Its mathematically exactly the same disregarding fees. All youâve done is realised the gain. You could just pretend that you havenât if it helps.
After all if you think the stock is too high to buy, why are you holding?
If you dont understand my point or unwilling to, pointless me explaining.
Good luck and enjoy being hard headed.
I donât think itâs me thatâs being hard headed at all here. Iâm trying to understand your point, Iâm not sure you have one?
This is also incorrect, the position size is the same. youâll have a higher average price, but so what - youâve realised a gain. Obviously thereâs a little more to it then this, but mathematically youâre in the very same place you were before selling? What is it exactly that Iâm missing?
Why will it be? If I buy a stock at ÂŁ5 and it goes to ÂŁ6 - then falls to ÂŁ4 Iâve lost a pound?
If I sell it at ÂŁ6 rebuy at ÂŁ6 and it falls to ÂŁ4 Iâve lost ÂŁ2 but have ÂŁ1 in realised gain
Both amount to a ÂŁ1 loss.
So you mean aesthetics - right.
Iâm not worried about aesthetics.
Its ok if you dont want to accept being wrong or stand corrected. It has no impact on myself.
Perhaps have a chat with AI, they can go all day.
Youâve not done either of those things? Youâre disregarding the realised gain and only considering aesthetics. Which is fine - itâs just a different angle. I would argue incorrect.
I think that you are arguing at cross purposes.
If a stock is sold and rebought (effectively for a taxation advantage) then it is down to the share owner to decide if they base their profits on the original purchase price or the new purchase price. Ultimately it does not matter.
The important point, which has been lost, is that joe_best17 has a choice to make:
Does the small loss in the bid:offer spread, and probably the FX costs (if the stock is not in their home currency), outweigh continued taxation from CGT and/or Dividend Tax.
If yes then sell the stock, transfer the money to the ISA and buy the same stock.
If not then leave things as they are.
Obviously I am assuming that the necessary ISA allowances are still available.
This is precisely what Iâm saying.
You havent realised the gain and put aside have you? No, youve thrown it all back in at a higher price at the same stock.
So your position cost basis is higher. If stocks only ever go up thats fine. But they dont, so when if/when they do turn, your draw down will be greater in % terms, and anything you ârealisedâ would be lost faster.
So just saying
Sell and rebuy - youâll end up in roughly the same position
its not accurate or advice to be giving without knowing someones entry price.
I think we are all getting involved in irrelevant details.
The original question was whether a portfolio can be MOVED to an ISA. This implies that the owner will not be taking any profits (or drawdown).
If you sell and rebuy (without taking any drawdown) then obviously it will be the same position as if you had not sold and rebought (albeit there will be various charges in that transaction).
So, for this particular situation, the entry price is completely irrelevant.
If you want to have an argument about something else then could I suggest that you start a new thread.
Aesthetically yes. But the overall position size is the same.
Stock plus gain = rebought stock.
If a stock falls from ÂŁ6 to ÂŁ5 and you have 10 shares you lose ÂŁ10 - it doesnât matter what your average price is in this scenario.
The percentage is aesthetics and in the situation described totally moot, because weâll have the same amount of shares and the same overall position size whether we sold and rebought or didnât.
If the holding is fairly liquid, not too volatile AND you have ISA allowance capacity, it absolutely makes sense to sell as much as you can contribute to an ISA, transfer GBP into your ISA and buy back if you plan to continue to hold.
Considerations are because you purchased in a GIA would be maximising your CGT allowance, so sell any positions in a loss and match with positions in a gain, and transfer that over, then check whatâs left in your annual cgt allowance before the new tax year.
