When you buy shares, do they automatically go into a S&S ISA?

I am looking on HL about opening an account so I can buy and sell shares. I haven't used my ISA allowance this year.

They have two options which I am looking at: S&S ISA and a Share Dealing Account.

Is the S&S ISA just a tracker fund or something? Because it says you can regularly invest £50 or a lump sum of £500 to open it. However I don't see why this would be the case if you wanted to buy shares.

The share dealing account looks more like what I am after, but can I buy and sell shares within my ISA allowance? I want the tax breaks from an ISA but I don't want to invest in trackers or funds as I have some of them already.

Which one do I open?

Link here if you want to look:

S&S ISA
http://www.hl.co.uk/investment-services/isa
(Also says you can pick your own investments which is why I am confused!)

Share Dealing:
http://www.hl.co.uk/shares/share-dealing

Reply 1

Limpopo

OK...think of ISAs as a kind of container ito which you put investmets (of may kinds) and in which any gains are free from tax.

You can deal shares either within the isa container or just in a normal share dealing account.

Are you sure you need an ISA? How much are you planning to invest and for how long? How old are you now?

Maybe share dealing isnt for you? Maybe you need funds or investment trusts instead?

Reply 2

balotelli12

You cannot deal shares within an ISA wrapper. If you sell shares in an ISA that ISA allowance goes. You cannot replace them in the ISA in that tax year.

Reply 3

Limpopo

Original post by balotelli12

You cannot deal shares within an ISA wrapper. If you sell shares in an ISA that ISA allowance goes. You cannot replace them in the ISA in that tax year.

Are you sure..?

Reply 4

Reue

Original post by balotelli12

You cannot deal shares within an ISA wrapper. If you sell shares in an ISA that ISA allowance goes. You cannot replace them in the ISA in that tax year.

Not strictly true. You are able to reinvest any gains from a sale within the ISA without it then contributing towards the allowance.

Reply 5

Reue

Original post by Runninground

A stocks and shares ISA is just the 'holding place' for your shares + money. You put money into the ISA and then use this money to buy shares/funds/etc which are then held within the ISA.

The regular £50 or lump sum £500 are just amounts set by HL, same way as some bank savings accounts require a regular monhtly deposit minimum etc. They are not legal requirements.

My understanding is that there is absoloutly no advantage to not using your full ISA limit first. Therefore you should only use a standard share dealing account if you intend on investing above the annual allowance, and even then only for the amount actually above it.

Reply 6

Joinedup

Original post by balotelli12

You cannot deal shares within an ISA wrapper. If you sell shares in an ISA that ISA allowance goes. You cannot replace them in the ISA in that tax year.

incorrect
you can leave the proceeds of the sale as cash inside the isa and invest in something later on.

you'd only run out of allowance if you withdrew the proceeds from the isa

Reply 7

balotelli12

Which is exactly what I meant

Reply 8

Runninground

So if I opened one of these accounts: http://www.hl.co.uk/investment-services/isa I would be able to buy shares in FTSE listed companies, along with buying into tracker funds etc?

Reply 9

Joinedup

Original post by Runninground

So if I opened one of these accounts: http://www.hl.co.uk/investment-services/isa I would be able to buy shares in FTSE listed companies, along with buying into tracker funds etc?

the full eligibility rules are quite complex but in a word... yes

Reply 10

tehFrance

Original post by Runninground

Depending on your tax band, the 0% tax credit should make any returns tax free (bar standard fees/taxes when buying/selling which I don't think an ISA protects you from). I'll be honest and say I know nothing about ISAs but I do know that it's worthless if you're on the bottom tax band.

I would say that if you want to buy international shares, go with Barclays Stockbrokers or Saxo Bank Suisse, I would recommend Barclays Stockbrokers rather than HL for UK trades too, they're the best out of the lot within the UK.

Reply 11

Tactical Nuclear Penguin

Original post by Runninground

So if I opened one of these accounts: http://www.hl.co.uk/investment-services/isa I would be able to buy shares in FTSE listed companies, along with buying into tracker funds etc?

Yep, I have one and find it very good. In the last few years given the 0.5% base rate, average returns on stocks & shares ISA's have outperformed cash ISA's.

I invest in a mix of funds and FTSE equities and also now a few AIM tiddlers. There's no minimum investment in equity shares although the £5.95 dealing charge means that it's worth investing a decent amount. The minimum for a fund is £500 or £50 a month.