Complicated question : selling a small amount of shares that won't trigger CGT.. Going into isa.

[EDUCATIONCPD]

So, I'm selling 4 grand worth of shares, I want to get them from computershare into my isa.

I've been told if I sell them and buy the same amount of shares into my isa that's fine and won't be called "income" for my tax return.

However, do rhe shares need to go straight into the isa via some process or can the proceeds go into my bank and then into my isa?

I'm scared of falling foul of some tax trip wire etc.

Selling your shares won’t be income but will be capital gains. Capital gains are only taxed after a certain amount which I would have thought is more than £4k - google this years CGT annual exemption to check.

Before April, the 2023-4 CGT allowance is £6,000, which is being halved again for 2024-5 onwards to £3,000.

If you are only selling £4,000 worth, you might not have to pay any tax though if you haven't sold anything else that could attract CGT.

https://www.gov.uk/tax-sell-shares

CGT allowance this year is £6k. CG will only be a portion of the 4k anyway- whatever is the gain since you bought the shares- so definitely won't require tax being paid.

Can hit your bank before going into isa. Only thing you need to be careful with there is interest earned while in your bank account but if it's going into a current account and then you transfer quickly you'll be fine. For context you can earn £500 tax free from savings accounts before you need to start paying tax.

OP I plan to do the same except I've maxed my isa for this year- so will sell shares before tax year ends to take advantage of the £6k allowance for cgt (it goes down to £3k next year) and then will hold it until the new tax year and pop it into isa.

@Rooma thank you.

And this is a bed and isa?

I think the shares were worth a few pounds more each when I got them

I just want them in my isa and I can sell them more easily than fussing around with paper shares rather than any other issues

Yes I will transfer quickly

Yes this is bed and isa. Very sensible to move them into a tax free wrapper.

OP - you say in your first post that you file a tax return. You also imply that you will be selling at a loss.

You must report the loss within 4 years on your tax return if you want to offset it against future gains. Doing so could save you tax in the future so it's definitely worth doing.

No bed and isa is where the shares are sold in a gia then cash moved to an isa and bought the next day. Ie. Go to bed a gia wake up an isa.

What's a " gia" 🤔

To reduce the price difference eg bought for same price as sold. If you sell then transfer to your own bank account there will then be a delay and potentially shift in price for the assets in your ISA.

@10ThousandSpoons ..at the risk of sounding glib, I'm not too worried about that I'm more worried about inadvertently triggering something on my tax return that will cost me a lot more.

OP a his is a general investment account- it's what you invest money in when you've maxed your isa. What you're planning is fine- go for it

Are your investments on the same platform as your isa? The platform may transfer directly?

I’m trying to get my head around a bed & ISA. For example, If you’re going to put £20k into an ISA anyway from a regular savings account but have a GIA is there any point / advantage in moving £20k from GIA to ISA and then adding the £20k from the savings account to the GIA?

There's Facebook groups like meaningful money where you might get a more accurate response but I think you might be splitting hairs. But I could be wrong

@NotDonna unfortunately not!. It's a very annoying company with paper shares.

When the money goes into my isa do I have to buy the same shares?

And if selling shares isn't classes as income on a tax return then what is? Like a regular payment from shares?

Definitely join Meaningful Money Facebook group. People in there are incredibly knowledgeable!

Any gain on selling shares is a capital gain.
If any gains are more than £6k, it needs to be reported via self assessment.
If you sell after 6 April 2024, the gain has to be reported if it is more than £3k.

Dividends on generally the income being generated from shares. These are not taxed as income but as dividends again via self-assessment.

You cannot bed & ISA as you currently have the shares with Comptershare and I assume that your ISA account is not with Comptershare.

You can pay the money into your bank account and then into your ISA.

You don't have to buy shares in the same company, you can buy any shares/funds that your ISA S&S provider supports.

Bed & ISA is a process generally used when you hold the shares electronically and you want to get them into an ISA and you want to be out of the market for a short as time as possible. The provider sells and buys the shares almost instantly.
You normally buy slightly less shares in the ISA and there is a small purchase tax to pay when buying shares

@Marmight thanks I've been driving myself mad with it all.

Have the shares come from an employee Sharesave or CSOP scheme? If so then there are more nuances… you could get a letter of appropriation if you’re within 90 days of acquiring the shares and then transfer into an ISA.

Also, it’s not correct that you can only bed and isa with dematerialised shares. It’s still possible even if the company still uses paper certificates.

Your ISA company should be able to advise you on at least some of this.

No - selling shares is not income or a dividend (regular income). If you sell them for more than you bought them that is "capital gains". However, for only £4,000 worth as others have said you won't pay any tax on your tax return because there is a capital gains allowance greater than that (a bit like the personal allowance for income tax).

@snowlaser thank you.

I just didn't want to have this in my tax return and get slapped with huge payment due.
I guess I find it hard to believe they would allow me to suddenly have say 3 extra grand and not charge me.

@overgrowngrass unfortunately I had to wait 10 days for a response got the most vague instructions which I wrote back to get clarified last week and nothing.
Calling was no use because they couldn't help me on the phone.

I also tried to work it out on hmrc but the figures and traps are higher than what's relevant to me... It's like asking about isa and being repeatedly told " if you do x... You will use up your allowance" when myself and many people will not get anywhere near our allowance and don't need that irrelevant info etc.