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Thanks to all.
Sorted now and I have a strategy
It’s worth talking to your broker about bed and isa, some brokers will reduce trade fees either in part or in full.
Also if you DIY, consider spreading your holdings over several brokers to reduce risk of business failure.
Guitarsolo
Thank you, good advice I think.
I have only about 1/3 of my stocks safe in the ISA wrapper, and some of my stocks are too large to move in one year anyway. I will prioritise the stocks I move based on the size of their dividends and avoiding CGT.
I'm thinking about limiting transactions to £5k to reduce risk of catching a cold if the SP makes and larger than expected moves. The dealing cost will be relatively small and at worst only be around £19 for the sell and buy combined, so I'm not going to worry about that.
Some stocks that don't tend to fluctuate greatly I may increase the deal size to around £10k. I will make a decision nearer the time.
Avoiding the CGT is I think going to be relatively easy.
Its about time they raised the ISA allowance, but thats not going to happen anytime soon.
Paul, welcome to the game that I've been playing for the last 6 or 7 years! Same pitfalls; 4 or 5 days to move funds (although better now with 2 day settlement on trades), price moves for or against you etc.
Slik's advice is good if you have £20k in cash to hand (or multiples thereof) but personally I haven't held much cash with bank interest rates so low (£20k in cash is 'losing' £1k+ in dividends!).
The only advice I would add (from personal experience) is that if you're moving more than one stock from bed to ISA, do them one at a time. Trying to juggle a few companies can be quite difficult. Also, check out for upcoming news dates for each company and choose a 1-week period when there is nothing planned to come out (e.g. half-year reports) as these can move the price up whilst you're not holding - presuming you're holding because you expect some good results! You can play around with ex-divi dates if it is going to make a difference to you on dividend tax or CGT.
Assuming you have identified a no-news week then look to sell into a 3-day rise on the hope you might get a fall afterwards!
Mostly I have come out about even, after costs. There's been the odd big success and the odd loss. And once they're inside the ISA you can relax!
Guitarsolo
Slikoil
Thank you for your reply, hopefully I will have funds to allow me as you suggest to buy in the ISA before selling in the bed, but I could only manage this once, I am unlikly to have funds to allow me to do the same with my wifes ISA.
I don't really want to transfer any funds out of the ISA to replenish the BED funds.
I'm going to have to try and get around £250k from the BEDs to the ISAs over the next few years, and I'm trying to work some magic to minimise any tax burden, and minimise any loss during the transfer.
To be honest I'm not even sure what I would like is possible, but exploring as many options as possible.
Hoping that someone else here has had the same (nice) problem to solve and has come up with a solution.
The usual disclaimers apply, no financial, investment or tax advice offered or implied!
Paul, obviously you can be either lucky or unlucky with the 4/5 day timing difference, I have avoided this in the past by “borrowing” say £20k cash from another deposit account so that I sell in the bed account and buy simultaneously in the ISA account , then when the sell settles and cash transfers back to you, then replace your cash deposit. I have tried to minimise the loss on the bid/offer spread by using level 2 to time the buy and the sell to my advantage, but obviously there is some risk in doing this. Alternatively if your bed and isa accounts are with the same broker, some brokers will sell and buy back in the ISA simultaneously with little or no spread and without waiting for the sell to settle.
I wouldn’t get too distracted by ex div dates, again it’s just luck whether the price falls slightly more or slightly less than the dividend. You might however consider ex div dates for tax reasons if beneficial to you, ie do you prefer the capital gain or the dividend in your bed account before you sell and buy back in the ISA.
Alternatively don’t worry about selling and buying back simultaneously or about ex div dates, just sell when you think the market or that stock is up, and buy back later when the market or share dips or corrects at some point.
All IMO.
I meant out of my BED account.
Hi
While I would not usually consider dividend capture strategies, as I tend to try and pick a stock to hold and would consider myself an investor not a trader, I havea puzzle I need help to solve despite checking online.
The last couple of years I have maxed out my ISA and the wifes ISA so started a BED account.
I need to start thinking about the next tax year and how best to move stock into the BED account for 2022 and beyond.
I will of course keep an eye on tax implications as I go to minimize losses.
One strategy I am considering is selling after the dividend is declared and on the lead into the ex-dividend date from the BED account, transferring funds into the ISA and buying back the stock post ex-dividend date. I am just not sure how the timing works and if it would be effective.
The problem I have is the time delay, by the time I have sold in the BED, transferred funds to my bank account and moved them into my ISA I am looking at 4 or 5 days and while this delay could work in my favor, my luck suggests it is more likly to work against me.
All things being equal I am transferring the stocks likly to cause the biggest tax liabilities first.
Has anyone done this or can offer any advice or pitfalls to watch out for.
I appreciate that its just advice and any adverse outcome is my responsibility, but it may give me things to consider that I hadn't thought of.
In essence what I'm trying to achieve is to transfer stocks held in my BED into my ISA as efficiently as possible. With some types of stock I am given to understand dividend capture is less efficient (utilities ?) so I will try and make use of the SP changes around the ex dividend date. Others I may benefit from dividend capture.
Thanks in advance for anyone who can find the time to reply.