Tick, tick...boom! The bed and ISA deadline is early

The April bank holiday weekend has brought forward some ISA deadlines. We explain our ISA deadline dates and times.

With tax year end (5 April) rapidly approaching and the economic consequences of the pandemic likely to be explored in the March Budget, now is an ideal time to think about how you can take full advantage of the tax-free ISA allowance.

It’s a case of use it or lose it at the best of times, but don’t assume you have until the stroke of midnight on 5 April – the bank holiday weekend has brought forward some deadlines.

interactive investor, the UK’s second-largest DIY investment platform, has published its ISA deadline dates and times, and new ISA accounts have until 11.30pm on 5 April to make their application (see table below).

Investors looking to do a bed and ISA transfer need to be particularly on their toes. A bed and ISA transfer involves moving money that is not in a tax wrapper into an ISA, although you might incur CGT in the process, depending on your circumstances.

interactive investor has set a deadline of 22 March2021 for online Bed & ISA instructions (see table). However, we suggest that customers act quickly as the facility may close even earlier if demand continues to increase. Some investment platforms have suspended Bed & ISA transfers this year due to the operational challenges of home working, so it is worth checking with your provider.

The start and end of the tax year are the most popular periods for Bed & ISA instructions on interactive investor.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “We’ve all left things until the last minute, but it is worth checking with your provider to make sure you know just how much time is left on the clock. And the bumper bank holiday weekend means you might want to do this sooner, rather than later.

“Bed & ISA is a great way of maximising the ISA allowance if you don’t have ‘new’ money to invest, but you have money held outside an ISA that you want to maintain. Or you might just want to tidy up your portfolio and make sure you are using your tax-free allowance. And once your investments are in your ISA account, you won’t have to pay tax on any gains or income your investments make.

“With Capital Gains Tax firmly in the government's sights following a review of the tax by the Office of Tax Simplification, now is an opportune time to make full use of the generous ISA allowance (£20,000 at present) through Bed & ISA.

“You can also do the same for investments you’re looking to put in a SIPP (a process called Bed and SIPP).

“It is important to be aware of the circumstances where using the Bed & ISA strategy could cost you more. A Bed & ISA action is treated as a sale for CGT purposes, meaning that gains, when added to your other gains, could exceed the annual Capital Gains tax-free allowance.

“If you sell eligible holdings from your trading account, interactive investor will buy the same stock into your ISA, treating it as a subscription for that tax year, and we do not charge for the sale – but it is worth comparing platform costs if you are shopping around.”

ISA and Junior ISA deadlines.

* Applications with an immediate subscription by debit card as part of the application process will be accepted until this time, however referred applications will not be opened before tax year end. Please allow ample time for your application and payment to be completed.

** Online and Mobile Apps only.

*** Internal transfers between linked accounts only.

**** The deadline for receipt of cleared funds in our bank account. Note, bank transfers can take up to 3 working days to clear from initiation depending on the payment service your bank uses.

***** The deadline for online instructions. Telephone requests will be dealt with on a best endeavours basis after this time.