Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

The easy way to use your ISA allowance without investing any new money

It’s the start of the tax year and you have a new £20,000 allowance for paying into your ISA. This year’s bigger ISA allowance means you can now save even more money tax-free. If you want to make the most of this valuable allowance but you don’t have much spare cash to invest, why not consider a Bed and ISA transaction?

What is a Bed and ISA?

Bed and ISA transactions involve selling your non-ISA investments and using the proceeds to open or top up an ISA account. You can then buy the same investments back, choose other investments or simply hold the cash within your ISA. Whichever you decide, you will secure your annual ISA allowance without investing any new money.

The tax benefits

The main reason to use your ISA allowance is to take advantage of the great tax benefits that ISAs give you. In an ISA, any interest from cash savings or investment gains you make are free from Income Tax and Capital Gains Tax.

Bed and ISA transactions also give you a chance to use your annual Capital Gains Tax allowance. This year you have an £11,300 allowance for capital gains – so when you first sell your investments, any gains you make could be covered. Like your ISA allowance, the Capital Gains Tax allowance can’t be carried over from one year to the next. So if you don’t use it, you lose it.

How to get started with a Bed and ISA

If you already invest with Bestinvest you can log in and sell the investments in your investment account, making sure you don’t go over the £20,000 ISA allowance. Once the cash is in your account, call our team on 020 7189 2400 and ask them to transfer the cash from your investment account into your ISA. After this you can buy back the same investments or choose new ones.  

If you don’t have an ISA with Bestinvest, you’ll need to open one first. After this, call our experts on 020 7189 2400 and they will help you to transfer your cash or investments.

Not sure which investments are best for your ISA?

If you need some inspiration for your ISA investments, why not download a free copy of our top ISA investment ideas? You’ll find a collection of our research team’s best ideas from different sectors across the globe, plus a really easy way to have your investments looked after by our experts.

For more information on Bed and ISA transactions or opening an ISA with Bestinvest, get in touch with our friendly experts. Call us on 020 7189 2400 or email today.

Important information

The value of your investment can go down as well as up, and you can get back less than you originally invested. Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change. We do not give tax advice.