Hi guys I know I with isa invest account you have an allowance before you pay tax is there also an allowance with the invest account before you pay tax? I believe there is?
It depends on where you are a taxpayer. In the UK there is a £2,000 per year tax free allowance on dividends and £12,300 on capital gains in the year to 5 April 2021.
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Thanks for the reply Richard so in other words I could have a isa account and an invest account and invest in nio for example up to 12,300 per year?
£12,300 in gains this tax year
So if you put in £1 and you sell and get £2 back, you have made a gain of £1.
If you make gains of over £12,300 this tax year from selling then you would need to pay tax on the amount above.
Say if you invested £10000 and with the BID you could sell all for £25,000 what you might do is not sell all, so instead of £15000 gained you only sell £22,300 worth of shares and wait until the next tax year to use that’s years allowance instead rather than paying tax on the £2,700
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Gov uk has this answer but yes as per below
Actually, if you bought for 10000 and shares are now worth 25000, you have gain of 15000. To have all gains tax free you would want to sell a fraction (12300/15000) of your shares, ie 25000*12300/15000 in value, ie £20500 worth.
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That’s what I was suggesting here, my maths went wonky after that
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Richard thanks for the thought.
With 40k in cash, I open one ISA with 20k and Invest account with the other 20k.
What would be the strategy to what stock to put in each account.
Would you focus your ISA for the Growth stocks rather than Safe stocks? Which account should I focus more for Long term or Short term?
This is an interesting question.
I think of the ISA as the last place from which I would ever withdraw cash to spend, as the tax advantage is then lost forever. Therefore I tend to play safe in my ISA, using region/theme/sector ETFs for instance. The ISA is for very long term savings, even for passing on to my spouse once I am gone.
In a taxable account HMRC will bear some of the cost of my losses when an investment does not work out, since I can offset gains by losses. So I feel I can take on more risk.
An ETF holding US stocks loses 15% + 32.5% (higher rate than the taxpayer) of the dividend income to tax outside an ISA and 15% within (where the 15% withholding tax is paid before I ever see dividends)
A US stock loses 32.5% of the dividend income to tax outside an ISA and 15% within,
Thus there is more tax savings by placing a dividend paying ETF like VUSA in an ISA than there is placing a portfolio of US stocks there. The savings are 32.5% vs 17.5%,
But pies are very conveniently kept in an ISA, avoiding all the complex tax reporting that could be required. For this reason I do have some pies of stocks in my ISA.
Finally, note that accumulating and distributing ETFs are quite complicated to report for tax. There is undistributed income that must be identified and reported (even for distributing ETFs as not all income is paid out). This is another reason to put ETFs in an ISA: to save the tax reporting hassle.
I would be interested to know if others have any further ideas and whether my points above make sense.
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Thanks for the explanation 
You are right that you are taxed 32.5% on dividends as a high rate tax payers, however for US stocks the 15% withholding tax counts towards this 32.5%, it’s not double taxed.
That is exactly my point. A US stock incurs a total of 32.5% tax, comprised of 15% US withholding plus 17.5% UK tax after foreign tax credit.
However an ETF like VUSA incures 15% US withholding (internally paid by Vanguard and not deductible against UK tax) plus 32.5% UK tax.
My comments about tax savings are correct. Other things being equal (same pretax yield of underlying companies) it is more tax efficient to hold an ETF in ISA and stocks in Invest, rather than other way around.
Moving a stock into ISA saves 17.5% tax. Moving ETF into ISA saves 32.5% tax.
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Ok I get your point now, you can’t off set your withholding tax in an ETF. It’s a good point. Thanks