How to sell santander shares
Why You SHOULDN'T Use A Stocks & Shares ISA
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hey guys it's sasha and in this video
we're going to talk about stocks and
shares isa accounts specifically we're
going to talk about why you don't need a
stocks and shares isa account in the uk
and just before the keyboard warriors
get to work and smash their thumbs down
and leave a nice comment do me a favor
and just watch this video because this
video is one of a number on my channel
that is intentionally provoking thought
i am presenting a point of view that i
think is incredibly useful from an angle
that you might not have heard before a
view that often goes against the popular
narrative but might just spark a little
interesting thought but here is a fun
fact
i have a stocks and shares isa and i use
it and most of my investments are in the
stocks and shares isa i also advocate
stocks and shares isis and non-stop all
the time on my channel but it is also
incredibly important to recognize that a
stocks and shares isa account is not
always the best choice
so let's do it let's talk about why you
might not want to use the stocks and
shares isa and and i'm gonna give you
some really interesting food for thought
now a stocks and shares isa is an
investing account that is available in
the uk that lets you invest without
paying any taxes specifically all the
investments made within a stocks and
shares isa account are free from
dividend tax and capital gains tax any
investment you hold in a regular
investing account that isn't an isa is
subject to those taxes so that is a
massive plus and you're also allowed to
deposit up to 20 000 pounds per year
into your stocks and shares isa which is
more than 99 of people out there will
ever be able to invest per year so for
most normal regular people the stocks
and shares isa is basically pretty much
limitless but here is the issue and
stocks and shares isa takes more effort
to set up and manage by the investing
platform by the company it adds cost it
adds a whole load of things that you
don't really care but they do and as a
result there are far less stocks and
shares iso accounts out there than
regular investing platforms because of
this and the ones that do exist
all charge some sort of fees they charge
more than the free equivalents the best
overall option for a stocks and shares
iso account out there at the moment in
my opinion is free trade and the free
trade isa costs three pounds per month
and then also charges you a 0.45 for an
exchange fee every time you make a trade
in any foreign shares so for example if
you're like me and you like to invest in
u.s stocks that is a 0.45 percent every
single time you make a transaction when
you go and buy the stock you pay it when
you go and sell it you pay it when you
go and buy some other stock using that
money you pay it again
then there's vanguard they only let you
invest in the etf so there's no stock
options at all and they charge you 0.15
per year as an annual management fee now
that is really really cheap if you just
want to dump your money into vusa for
example the s p 500 etf that will be
cheaper for you for lower amounts than
the free trade and it's just really good
value but it is still more than zero you
still have to pay that fee and people
get very scared of these taxes there's
this perception that if you don't have
an isa if you don't use a stocks and
shares isa account your investing
portfolio is going to be pillaged by the
tax man and you will be left with a tiny
fraction but let's look at the numbers
the zero percent dividend income
allowance in the uk is 2 000 pounds that
means you can earn 2 000 pounds worth of
dividends before you owe any tax on them
whatsoever and if you don't own your own
company and pay yourself dividends
through that or if you don't have some
other random dividend income two
thousand pounds is a lot for example if
you have a dividend portfolio that pays
you three percent per year on average
across all of those stocks you will pay
no dividend tax even with a 66 000 pound
invested into those dividend stocks so
that is quite quite something to think
about for most people this will not be
an issue this dividend tax
and dividends are not the sort of thing
that might just jump out of nowhere and
suddenly you're going to have to go and
pay their tax your dividend stocks are
not going to suddenly start paying you
50 per year dividend yields and then we
have capital gains which is the other
tax that stocks and shares isa allows
you to avoid in the uk we have a zero
percent tax band for capital gains and
that is set at 12
300 pounds per year so regardless of how
much you earn an income elsewhere and
whatever you do elsewhere you can get 12
300 pounds per year in capital gains
completely tax free and remember that
this is just on the gains that's how
much your investments have to grow by
and even then the tax is only due if and
when he happened to sell that so let's
say you invest your money and you get a
great year for example you get a 20
return on your investment that is a
really good year that's twice what the
market returns on average so if you
invested 61.5 000 pounds or less and
then sold it for 73
800 pounds so that 12 300 on top
you will not owe any tax and that
remember is per year and i'm guessing
that most people are not going to have
the sort of portfolios where this is
gonna begin applying most people are not
investing tens of thousands of pounds
and getting double digit high double
digit returns on that investment but
here is the cool thing
let's say you want to invest in vusa
that s p 500 etf and let's say you want
to do it completely for free you can do
it completely for free by just setting
up a free trade general investing
account instead of doing it inside the
isa 100 free zero fees no cost at all
and if you use my link in the
description for free trade you can open
a free trade account and get a free
share for using the link so you will
actually get paid to invest instead of
having to pay to do it or if you want to
invest in u.s stocks with a few hundred
pounds for example stay can be a much
much cheaper platform than free trade
stake has a 0.5 foreign exchange fee
compared to free trades not 0.45 so it
is a tiny bit higher but you only pay it
once when you deposit money into the
platform and then again only when you
withdraw the free trade isa will charge
you that 0.45
every single time you make a trade so
you buy a stock you pay you sell it you
pay it then you buy a different one you
pay it again so on steak you can put
money in pay that one-off fx fee and
then buy and sell companies for as long
as you want whenever you want however
many times you want as long as you don't
do day trading
and yeah you guessed it you can also get
a free share with stake if you use my
link in the description below to set up
and fund the account as well i've got
all the free shares and because these
are general investing accounts
you can literally set up as many as you
want with the i said there's a
restriction you can only use one per
financial year with these you can have
as many as you want and you can collect
all of those free shares if you
want to if that's the choice that you
want to make but hey
here is an important counter argument
that i'm sure some people will put
forward because let's say you start
doing this you start investing outside
the stocks and shares isa and then
continue investing for a while and build
up a big pot over time because maybe
small amounts over time they will grow
year after year and you'll keep putting
money in then when you come to sell at
some point in the future maybe in like
10 years because you want to use that
money to buy a house or something like
that then you will own capital gains tax
because there's gonna be one big sell
far in the future when you might have a
lot of capital gains tax
and that is a very valid argument that
is why i have a stocks and shares isa
and that is why a lot of people should
consider having a stocks and shares isa
but if you're just starting out and
investing you just want to understand
how it works try it out for the first
time there is nothing stopping you
starting out with a general investing
account that is free or very cheap and
then if your investments are growing so
fast that you know capital gains tax
becomes something that could be an issue
you can always open a stocks and shares
isa at that point if you want to you can
even move the money over from your
general investing account to that isa at
that point if you choose to and if
you're happy with the fees and yes you
will be out of the market for a few days
while you're waiting for the money to be
sold in one deposited into your current
account and then invest it into the
other one but in the grand scheme of
things that might still save you quite a
lot of money and remember that the 12
300 pound allowance is per financial
year you can sell your investment in
chunks as long as it's the amount that
you sold doesn't qualify for capital
against tax that's all that matters you
can sell one bit before the end of the
financial year at the end of the
financial year just the beginning of
april and then you can sell another bit
like one or two days later and in the
other financial year and then your
tax-free allowance is essentially double
because you're using two different
announcements from two different years
almost 25 000 pounds in capital gains
completely tax-free if you do that
if you have a spouse for example and you
invest your money jointly you make your
decisions together you could if you
choose to get two separate uh investing
accounts and they both will have a zero
percent capital gains so you're then
doubling your allowance again now the
truth is there isn't a huge difference
in price it is not hugely expensive to
have this icer and for the peace of mind
you might just find that it is easier to
start with the stocks and shares iso
account and then you don't have to think
about it you don't have to worry you
don't have to work out what is your
capital gains this year will you have to
pay tax you won't have to worry about
those tax brackets changing or anything
like that and at the end of the day that
free trade stocks and shares isa is at
the moment only costing you 36 pounds
per year plus that 0.45 fee when you buy
and sell a stock so
if that stock grows a little bit you're
roughly talking about one percent to buy
in and then sell back out of that stock
but that one percent is still one
percent
but there are new investing apps
entering the uk market in the coming
months i already know this somehow i'm
suspecting the samara as well and they
will offer more free or very cheap
investing options but will probably not
have an isa account and it's just one of
those things that you should think about
because it could be a few hundred pound
difference maybe even more than that
depending on your investing style and
time we all have different circumstances
we all have different investing styles
different approaches and one thing can
work for one person and be the absolute
right choice but it cannot be the right
option for somebody else if you found
this video useful please don't forget to
smash the like button for the youtube
algorithm thank you so much for watching
i really really appreciate it and as
always i'll see you guys later
[Music]
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