Bed and ISA
What is a Bed and ISA and how does it work?
A ‘Bed & ISA’ transaction allows you to sell existing investments and use the proceeds to open or top up an ISA account. You can then choose to buy the same investment back, choose another investment instead, or simply hold the cash within your ISA account.
Why do a Bed & ISA?
You can make use of all the tax benefits of holding investments within an ISA, without needing to invest new money. You can also make use of your Capital Gains Tax allowance:
- Sell an investment which has made a profit, and you could make use of your Capital Gains Tax Allowance (£11,100 in the current tax year).*
- Sell an investment which has made a loss, and you could use this to offset against any other capital gains now, or carry it forward to offset against other gains in the future.
* Please bear in mind, any capital gains in excess of the yearly allowance (£11,100 in the current tax year) may be subject to Capital Gains Tax. This applies to all gains made across the course of the tax year.
How do I carry out a Bed & ISA?
If you are a client of our Online Investment Service, just follow these three simple steps:
Sell the existing investment(s) in your General Investment Account up to the value that you would like to raise, ensuring it will not exceed the ISA limit once invested into your ISA account.
Once you can see the cash proceeds in your ‘Available to invest’ cash balance (usually around 4 days later for funds, and 3 days later for shares), call our team on 020 7189 2400 and ask them to transfer the cash from your Investment Account to your ISA Account.
Log in to your account any time after the following day if you would like to reinvest the cash into the same investments of your choice.
If you are a client of our Advisory Service or Managed Portfolio Service, please contact your Relationship Manager, who will be happy to carry out the Bed & ISA on your behalf.
What if I haven’t opened an ISA account yet?
If you have never opened an ISA with us before, just complete this simple ISA application form and send it to us at the below address in advance so that we can have the ISA account open already for you when you come to do the Bed & ISA.
Bestinvest, 6 Chesterfield Gardens, Mayfair, W1J 5BQ
This article should not be considered a personal recommendation for you to invest, or to transfer your investments. If you are unsure about the suitability of any investment, you should seek professional advice.
Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.
Any investments sold as part of a Bed & ISA could generate a capital gain or loss. You may not buy back the same number of units/shares due to market movements, bid-offer spreads and dealing commissions.
Before carrying out a Bed & ISA, please ensure you are familiar with our dealing costs, which can be found in our Key Facts document.