New to investing - profits included in ISA allowances and fees?

Help & FAQs
1

I’m new to investing and want to transfer £20k to my stocks and shares ISA. I will be investing in VUAG only. A few questions:

  1. do the profits that will be auto-reinvested into the ISA from VUAG count towards my £20k allowance? If so, how do I know how much of the £20k allowance I should invest?
  2. it states the cost of the fund is 0.7% TER. How will this money be taken, will it be from the ISA itself, or can I arrange for some cash to be placed in an account and the fees to be taken from there?
  3. how much is it to take your money out of the ISA? Are there any fees?
  4. is there a purchasing fee for the ETF I have bought, or is it just the 0.7% TER fee?

Appreciate any help.

2

Hello @Sajidah, some answers :-

  1. Reinvested profits in the ETF are not part of your ISA allowance. At the same time, any incurred loss if the ETF price goes down doesn’t give you scope to put more into your ISA in excess of the annual allowance.
  2. The ETF TER is taken from within the fund. The latest price you see for the ETF is after operating costs have been taken. Nothing more to pay.
  3. There is no charge to make withdrawals from your ISA. Note that the InvestEngine ISA is not a ‘flexible ISA’ though, so you can’t put the money back into the ISA, unless you have unused allowance that year to cover it.
  4. IE doesn’t charge for buying an ETF. Many platforms do charge. There is a ‘spread’ that means you incur an indirect charge (ETF buying price is a bit higher than your selling price), but it is minimal for VUAG, and you can’t avoid the spread regardless of platform.
1 Like
3

Thanks, that’s extremely helpful.