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Bed & ISA

Need help? Call 0845 88 00 267

Make your existing investments tax-efficient.

Our ISA benefits:

Bed & ISA
  • Take advantage of annual tax allowances
  • Use existing funds or investments
  • Pay no additional fees
  • Add an ISA account in just 2 minutes

If you hold shares or funds in an investment account, why not consider selling them and reinvesting the proceeds in an ISA?

This process is known as Bed & ISA. The big benefit is you can use existing money or investments to take advantage of annual tax allowances rather than having to find new money, which may not be available.

Unfortunately, due to current ISA regulations, you cannot transfer existing holdings directly into your ISA. Which is why you need to sell them in one transaction, and then buy them back in another, via a tax-efficient ISA.

Interactive Investor can help you with the process and you will usually be able to sell and buy back the same investments straight away.

This can only be done by phone so please call us on 0845 882 3325.

The good news is that if you want to buy back the same shares in your ISA straight away, you won’t pay a commission cost to repurchase them, though you will still be liable for stamp duty.

If you want to change investments you can buy an alternative or simply hold cash in your account until you decide where to invest. If you’re already holding cash within your account the transaction is even easier to arrange. One phone call will ensure you take advantage of your ISA allowance, meaning any future investments will be free from additional capital gains or income tax.

You should be aware, however, that selling your investments will realise any gains or losses on your existing holdings.

Current rules allow you to gain up to £10,100 without having to pay capital gains tax. A fact worth noting for your financial planning is that if you are realising a loss, you can carry this forward, indefinitely, to offset against future gains. (This process will not be suitable for all, so if you are in any doubt then please contact your financial adviser.)

Once your holdings are within an ISA they are free from future capital gains or income tax and, best of all, any income you make is not declarable on your tax returns.

Where do I start?

Existing customers can add an ISA account in just 2 minutes. Simply login to your account, select Manage my Account and then Add an Account.

And because our ISA account has no admin or any other fees, you can continue to trade as normal, for no extra fees and with the added advantage of doing it tax efficiently.

What happens next?

Add an ISA account to your existing account (takes just 2 minutes).

If you have cash in your account please ring us on 0845 882 3325 to transfer the cash.

If you hold shares in your account you can ring us and we can sell the shares and buy them, or an alternative, straight away within your ISA.

If you have any queries about the process please ring us on 0845 88 00 267

Please note you will need to contact us before 4.30pm on Monday 29th March, if you’re selling shares in order to reinvest the proceeds within the 2009/10 tax year. If you are selling funds the deadline is 11.00am on Friday 26th March.

Also, as the process involves selling shares and then rebuying them, you will incur trading costs, as well as stamp duty on the repurchase (no costs are incurred for transferring cash holdings).

The above does not constitute advice. If you are in any doubt about the suitability of this process or have any other queries please contact your independent financial adviser.

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