Hi
Can I buy or sell shares (single/multiple) times in ISA account in one day?
If I buy Apple share and sell later in a day and do this again the next day, Is it allowed legally? How much tax will be levied? I understand for ISA ÂŁ12500 is tax-free but just wondering if profits are made, any hidden charges or fee applied.
Under ISA everything is tax free, the 12500 you mention would be CGT if you were doing the same outside of an ISA.
Your personal ISA allowance for 2020/21 is ÂŁ20,000. You can buy and sell as much as you want.
Also refer to this link
That is only applicable to CFD.
For invest and ISA accounts, see the official response in the thread below:
https://community.trading212.com/t/new-terms-and-policy-and-day-trading/5281/4
Think of an ISA as a box you can put up to ÂŁ20k inside a tax year into, and use that to buy and sell as many times as you want with those funds.
So if you put in ÂŁ5 and make ÂŁ1 profit, you now have ÂŁ6 to play with. All that profit made inside is not taxable.
You could then add a further ÂŁ19,995 into the box in that tax year to play with.
But I think part of the question was also about frequency of trading (regardless of wrapper). This is an interesting point as T212 have not said in detail why they don’t conform to PDT rules like other US brokers. Or did they and I missed it? Or are they really not subject to PDT (Pattern Day Trading) when clients transact US shares? I genuinely don’t know the minutia of the law to know if they are bound or not! Those with greater wisdom might know why!
But feel this doesn’t explicitly state why.
Or why I am bound by PDT on my Stake account that is not a margined account.
Seems Stake is just being rather cautious on it due to their US broker dealer - DriveWealth. They apply it to all accounts below 25k in value as stated in their help, but you can get around it by depositing until you have more than 25k in value:
Exemptions from PDT
Restriction on day trading only apply on account values under $25K, regardless of whether you’re on Stake Black or not. Those with account values over $25k can day trade freely, without restriction.
What if I’m marked as a Pattern Day Trader?
If you are ever marked as a Pattern Day Trader or getting close, you can fund your account above $25K to remove the restrictions. However, you must be able to maintain this account value for the duration of the initial flagged 90 day period.Stake Day Trade Counter
To keep our customers safe and on the right side of the rules, we’ve built a Day Trade Counter into Stake. This will keep track of all your day trades and notify you when you are on your third day trade in a rolling five trading day period. You’ll always have the right (and given the choice) to make a 4th day trade, but will be warned of the impact this may have.
What’s the significance of $25k?
That’s when you’re “sophisticated” enough in US rules 🤷
It’s an arbitrary mark.
The US people also call it the “law to keep the poor people poor”.
While PDT applies on margin accounts, they have T+2 settlement on cash accounts and are not allowed to trade with unsettled funds or you might get a good faith violation (brokers don’t handle this as strictly as PDT).
Overall both quite restrict the way of trading quite heavily without a lot of money.