Jump to content

Share Trading Vs Share ISA


Recommended Posts

Hey - So the only difference as far as I can see is the fact that you have to pay tax on profits in the regular share dealing account. In the ISA share account you can put up to 20k GBP in there per year and any profits you earn are tax free. This is part of a government allowance. This means that you should use the ISA acct before the share dealing in order to maximise your benefit. 

  • Thanks 1
Link to comment
3 minutes ago, Fletch said:

The ISA is just a wrapper that protects the investments from UK tax. Other than the funding limitation (£20,000 per tax year) and some restriction on the type of ETFs that can be put in an ISA, they are essentially the same thing.

IG's ISA page: https://www.ig.com/uk/investments/isa

So it would be subject to the same charges and commissions as a share trading account,  but the profits from this are Not taxable, is this correct? Also like standard bank isas any funds within the account are not subject to being locked in the account for a period of time?

 

is this correct, many thanks

Link to comment

is it 20k funding each year or profit/capital gains?

 

i believe with normal share dealing the first 12.5k of profit is not taxable anyway if you have no other capital gains  elsewhere in the tax year

Edited by DannnoB
Link to comment
33 minutes ago, DannnoB said:

is it 20k funding each year or profit/capital gains?

 

i believe with normal share dealing the first 12.5k of profit is not taxable anyway if you have no other capital gains  elsewhere in the tax year

20k of funding. And yes, for most people, in the short term it probably won't save you tax, because you wouldn't be earning enough from the shares to liable for it anyway. However, over the course of 10, 15, 20 years of investment, the story might be very different.

Link to comment
  • 2 weeks later...
15 minutes ago, BASA said:

So to summarise throughout the year I can put up into 20K nvestment into the account,  by taking money out, putting money back in etc but I am only paying tax on anything over 12.5K

?

You're not paying tax on anything within the ISA. That is fundamentally the point of it. Unless of course the government decides to change the rules at some point in a desperate bid to raise some money.

  • Like 1
Link to comment
Guest Reply to tax question
21 hours ago, BASA said:

Thanks Fletch, I had done some reading after I posted  so basically, I gather, any profit from up to 20k investment is non taxable at all, 

I did some research on this, a lot in fact and discussed it with my accountant. 

ISA: You can transfer up to £20,000 INTO your ISA in any tax year (April to April). If you take some out then pay it back in, the withdrawal is not included in your allowance. eg you pay in £10,000, you take out £5,000, you can now only put in another £10,000. You cannot also replace the £5,000 you took out in addition to the £20,000 deposit limit. 

If you are in a Fund and Share type of ISA where you can trade and deal, any profit you make is tax free. So, for example you could pay in £20,000 a year for 5 years, and be a mega-successful trader and trade up to £1,000,000 or more (hypothetically) and there would be no tax to pay on your £900,000 gains. None, of any kind. 

Outside of an ISA you are only allowed the Income and Capital Gains allowances that are relevant to that year. Above those all gains are taxed. There is, however, an interesting loophole: If you use Spread Betting (this doesn't apply to CFDs), and if it is not your main source of income, then gains from spread betting can be treated by the Inland Revenue as gambling, and are therefore not taxed. What constitutes "not your main source of income" is the grey area though. If you have a regular job and pay income tax, you can claim that spread betting is secondary. However if you build an account up to a size where you are regularly making more than your salary, the Inland Revenue can, at their discretion, claim that it has become your main source of income, and that you are a professional trader - at which point you might get a pretty big tax bill. So, as long as it's small you can spread bet outside an ISA and put £20,000 into an ISA for CFD trading each year. 

Link to comment

Do you know if the share trading account has limits on it?

i am getting close to maxing my ISA out for the tax year, so if I have money later in year I will need to invest in Share dealing & just wondering if I can invest in both & there is any limits.

Thanks in advance

Link to comment

If you buys via the normal share dealing route then any gains are subject to capital gains tax - this tax year you can make gains of £12,300 the rest is subject to taxation at varying rates depending on your tax status - 10% for a basic rate tax payer and 20% for high rate tax status etc - see https://www.gov.uk/browse/tax/capital-gains

You can buy the SAME shares and ETF's within an ISA - its exactly the same as share dealing but you don't pay capital gains 0 its a tax-free wrapper for investments

Your first port of call should be an ISA, then one for your spouse if you have one, then share dealing - Then every year use the share dealing account to fund new ISA(s) contributions

I haven't bought a share or ETF outside of my ISA for the past 10 years - doesn;t make sense tax wise

 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,261
    • Total Posts
      90,870
    • Total Members
      41,372
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    raymondchen16
    Joined 05/02/23 23:53
  • Posts

    • SP500 | NASDAQ | Russell 2000 | Dow Jones: Elliott Wave Technical Analysis Content: SP500 - NASDAQ 100 - RUSSELL 2000 - DOW JONES Summary Bullish Impulse wave structure moving higher Elliott Wave (iv) of iii) of 3 of (3) of 1) Strategies Holding long Video Chapters 00:00 S&P500  11:33 NASDAQ 100 (NDX) 12:26 Russell 2000 (RUT) 13:23 Dow Jones (DJI) 19:16 TRIAL Buy 1 Month Get 3 Months Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com  
    • Q: How can I experience the Fairy Cat metaverse? A: Debuting in January 2023, Fairy Cat is one of the most popular crypto metaverse games. While earlier games (World of Warcraft, League of Legends, Destiny 2) either precede blockchain technology or have not integrated it into their games at all, more recent metaverse iterations - such as FairyCat - integrate metaverse games and blockchain platforms. These so-called "crypto metaverse" games use blockchain technology to achieve encrypted in-game cash, play-to-earn (P2E) and non-fungible tokens (NFT), decentralization and other functionality to bring extraordinary benefits to metaverse games. relevant impact. You don't need to be a crypto expert to play this innovative game, although a little crypto knowledge is helpful to take advantage of all the functionality of FairyCat. Start exploring Fairy Cat: 1. Go to the Fairy Cat website to learn more about the game's currency models, then download the Metamask wallet. 2. Start earning money by opening the game in the Metamask wallet browser. At this point, the game will connect to your wallet account. Don't worry that this game will steal your wallet balance, because it doesn't need your account authorization data, it just needs your wallet data. 3. Once you are in Fairy Cat, you can go through a money transfer tutorial to learn the basic controls. Then you can earn money in the following three methods: Method 1: Adopt a cat to help you find treasures, and you can make profit after selling the treasures. Method 2: Synthesize an LV1 elf cat through 5 elves, and then sell the LV1 elf cat to earn money. This can be understood simply as using 5U to earn 10U (50% probability), and you can buy items to increase the synthesis rate. Method 3: Invite your friends to play the game. After your friends earn money, you can also get commission income. The income is very high.
    • HI,  Please if any IG supporting staff can answer the questions below? 1. in the upcoming AMC/APE vote on 14 March 2023, can shareholder that hold AMC and APE at IG able to make a vote? I also have AMC and APE at IBKR and they did send out a notification to inform me that I can do proxy vote. Will IG do the same? 2. the upcoming vote is to determine APE covert back to AMC then do reverse spilt. Last year after APE issued, IG staff told me that they have to move APE to share dealing account from my ISA account as ISA is not eligible to hold APE (which is completely unbelivable, my APE at AJ Bell and HL are still sitting in ISA account). Anyway, if the conversion and reverse spilt is going to happen, will IG move my APE back to ISA account for the corporate action? Many Thanks
×
×
  • Create New...