Wake up your investments with a Bed and ISA

It’s probably safe to say that when most people think about their bed, ISAs are not the first things that spring to mind. But a Bed and ISA is a great way to make the most of your tax-free allowances – particularly if you haven’t got any new money to invest. Remember, in the 2018/19 tax year you have a generous £20,000 ISA allowance to use up.

Published on 04 Mar 20193 minute read

What is a Bed and ISA?

A Bed and ISA involves selling some of your non-ISA investments – those in a general investment account or investment portfolio – and using the proceeds to open a new ISA or top up an existing one.

Once the money from the sale is in your ISA, you can buy the same investments back, choose new investments or just leave it as cash.

What are the tax benefits?

ISAs come with fantastic tax benefits. Any gains or income from cash savings or investments are tax-free.

A Bed and ISA also allows you to make the most of your annual Capital Gains Tax allowance (£11,700) before it resets at the end of the tax year – midnight on 5 April. When you first sell your investments, any gains you make will be covered up to the value of your remaining allowance.

If you exceed the allowance however, you will have to pay tax, so sleep on it before deciding how much to sell. If you are in any doubt over this, please contact us on 020 7189 9999 for further information. The way in which tax charges and tax relief are applied depends on individual circumstances and may be subject to change in the future.

Turn your investment dreams into a reality with Bestinvest

Getting started with a Bed and ISA transaction is easy. If you already invest with us, you can log in and sell the investments from your investment account – but be careful to not go over the £20,000 ISA allowance or available CGT allowance (£11,700). You should also make sure that you have sold your investments before 27 March to avoid missing the tax year-end deadline.

When the cash is in your investment account, call our experts on 020 7189 9999 and they can transfer the cash from your investment account into your ISA. Afterwards you can buy back the same investments, choose new ones or just hold the money in cash.

If you don’t have an ISA with Bestinvest, you’ll need to open one to get started with a Bed and ISA. You can do this online or by printing out our paper forms and sending them back to us. Once your account is open, you can call us on 020 7189 9999 to start your Bed and ISA.

Open an ISA

You should always remember that investments can go down as well as up and you may get back less than the amount originally invested.

Some bedtime reading

For more information on the great benefits of ISAs, take a look at our guide to Stocks & Shares ISAs. If you need some investment inspiration for your ISA, we also have a guide to Our Top ISA Investment Ideas.

We don’t want you losing sleep over this, so if you need any help with a Bed and ISA, email us on best@bestinvest.co.uk or give us a call on 020 7189 9999 and we can explain it to you in more detail.