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If you have investments that you would like to transfer into your AJ Bell Youinvest ISA and you have not used your full allowance for this tax year, then you can use our bed and ISA service.
A bed and ISA is a pair of deals where an investment is sold in a dealing account and bought in an ISA. The two transactions are carried out together so there is less exposure to market movement. However, the amount of shares bought in the ISA will be less than the amount of shares sold in the dealing account due to the costs deducted – stamp duty, our dealing charge and the difference between the market buying and selling price.
Bed and ISA is available across a wide range of investments including shares, investment trusts, trackers and bonds but you can’t do a bed and ISA in funds (unit trusts and OEICs).
Bed and ISA can be useful if you want to take advantage of the tax benefits in your ISA but don’t have readily available cash to invest and you do have investments held outside your ISA that you want to keep.
The two transactions that make up a Bed & ISA are counted as just one deal so you will only be charged one dealing charge at our standard online rate.
First, open a dealing account with us – this is easy and will only take a few minutes. Then you must transfer your investments – which must be ISA eligible - into your dealing account. Then call the dealing services team on 0345 37 33 479 and instruct us to carry out the bed and ISA transaction. We will sell the investments in your dealing account and buy them into your ISA and send you two contract notes. You will only be able to buy investments in your ISA up to the value of your unused ISA allowance for this tax year.
By carrying out a bed and ISA you will incur stamp duty and our dealing charge as well as losing the difference between the market buying and selling price.
You may also be liable for capital gains tax on the sale in your dealing account depending on your personal tax position.
The tax benefits of a stocks and shares ISA may change in the future and the tax treatment depends on your personal circumstances.