ISA or not ISA10 Oct 2018 13:40
I first bought AXM just so I can have a million shares for a laugh.
The idea was also it's a ready source of capital loss, under my control.
Sell AXM to crystallise the loss, and bring down the overall gain for that tax year. When it means you step back from straying into higher rate tax, it can be really beneficial. It's like sandbags in a hot air balloon.
This meant the shares have to be bought OUTSIDE an ISA.
Now that AXM seems ready to zoom off into orbit, I have been moving them into the S&S ISA, selling other shares to make room.
If you have £20k, and bought at 0.15p, you get ~13million shares.
Share price goes up to 0.5p, 13million shares is now £65k, but you can only put £20k into an ISA.
Next year, it's 1p, so it £130k, so you will NEVER be able to move them all into an ISA.
Let us say it gets to £1 a share by 2028, and you have been stuffing £20k worth into an S&S ISA every year for ten years, you are still looking at a sphincter busting tax bill when you sell. Let us say you still have 5million shares outside the ISA in 2028, and AXM pays 5% on a share price of £1, that is £250k dividend a year.
"Basic-rate taxpayers pay 7.5% on dividends Higher-rate taxpayers pay 32.5% on dividends Additional-rate taxpayers pay 38.1% on dividends."
So, about £150k will be paying 38.1%. If you have other income, using up the basic rate bands already, you could pay 38.1% on £200k, and 32.5% on £50k.
If you like pain, you can find a dominatrix with a whip, and it wil be much cheaper.
So: buy inside an ISA.
Or, post a video of you paying the tax bill, I think I will enjoy it.
I will share it on Facebook, with the caption: TOLD YOU SO.
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