New tax year ISA

General
1

Hello everyone, this is my first post here so please go easy on me. I have a question to ask.

Suppose I currently have £10,000 invested in ETFs and also have £10,000 in cash within an InvestEngine ISA. If I transfer the cash from my ISA to purchase more ETFs after the new tax year begins, will this amount count towards the new ISA allowance?

Essentially, I want to maintain £10,000 in investments and £10,000 in cash within my InvestEngine ISA and use the cash to continue investing during the new tax year. Afterward, I might consider opening a new ISA somewhere else with a fixed rate.

Thank you in advance!

2

It is only the transfer of cash from outside of an ISA into an ISA that counts towards your annual ISA allowance. What you do with it once it’s inside your ISA doesn’t impact on your annual ISA allowance; so within your ISA you can buy and sell as much as you like (i.e. transfer from cash to ETFs or from ETFs to cash).

Note you don’t get any interest on Cash in an InvestEngine S&S ISA so it’s not usually a good idea to hold a lot for a long time.

1 Like
3

That’s really helpful Paul. Thank you very much for your response.

And agreed on your point of no interest earned on the cash ISA! I’ll be mindful of that.

Appreciate your help.

4

What about csh2 (Lyxor Smart Cash) which has been mentioned on this forum. Is there any risk using that to park money before investing it?

5

If you sort of in a way want to “earn” interest on your cash in your ISA you can buy into any of the money market ETF’s like CSH2, ERNS, JGST, QUID and/or XSTR. There’s others as well but for that you can do some googling in your own time.

CSH2 seems quite popular with a fund size of about 322 million quid. ERNS comes in at about 750 million; QUID is about 164 million, JGST is about 110 million and finally XSTR at 70 million.

Personally I have a bit less faith in any funds below 100 million in size but that’s not to say there’s anything wrong with them. Just my personal opinion based on observation that their trades takes longer to settle.

Regarding dividends/interest payments CSH2 pays none but just grows; JGST and QUID pays monthly. ERNS pays out twice a year and XSTR just once a year

Obviously you don’t just put money in and withdraw the next day or day after that but leave the money in there until you decide to invest in any other particular ETF’s

For some more research you can start off by looking stuff up on https://www.justetf.com/uk/find-etf.html and then any other information sources you’re familiar with.