HMRC do not allow the direct movement of shares into an ISA from a non-ISA account. Your shares would first need to be sold and the cash transferred to the ISA before they can be repurchased. However, this process takes 2 to 3 working days for funds to settle, during which the prices of your shares can change and you may have to purchase the shares at a higher price than what you sold them for.
To mitigate any potential negative impact of waiting 2 to 3 working days for settlement of funds, we offer a service called ‘bed and ISA’. This allows for shares to be repurchased immediately and any future gains generated by your assets would then be protected from capital gains tax by the ISA’s tax-efficient wrapper.
Please note bed and ISA requests can only be made for UK stocks, and any profit made from this sale of shares will still be subject to capital gains tax,* and the cash balance transferred deducted from your annual ISA allowance.
* Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
Costs of a 'bed and ISA'
We charge £40 on the sale of shares per line of stock, but you won’t incur any cost from us on the repurchase.
There may be a PTM (Panel on Takeovers and Mergers) levy of £1 to pay on both sides of the trade, depending on the share and the consideration of the trade.
Depending on the share, you may also need to pay stamp duty of 0.5% of the notional value on the repurchase within your ISA.
When selling and rebuying shares there is a risk of price movement while you’re out of the market, and therefore a difference in sell and buy price between the open and close of the trade. This can result in buying back fewer shares than you originally held. By using the 'bed and ISA' process, this risk is capped at between either £30 or £50 spread per line of stock.
To cover the cost of a 'bed and ISA', you can either fund your account or agree for a number of the shares to be sold and the proceeds used.
To arrange a 'bed and ISA' for your account, please email your instruction to email@example.com with the following details:
Number of shares/value(s):
How you plan to cover the cost: