Moving Monzo shares into an ISA


(Mash) #1

Hi,

Is it possible to transfer the Monzo shares into an ISA to reduce tax liability?

Thanks in advance and apologies if this has been asked before.


(Splodf) #2

Reduce tax liability on what?


(Kenny Grant) #3

Sorry no.

They have to be listed, so you’ll have to wait till they IPO (unlikely for at least a few years, probably more like 5), and you will not be able to avoid any CGT liability, should you be lucky enough to see your shares rise sharply in value. They may also be worth nothing in the end, though that seems increasingly unlikely. Best just to wait and see, they are highly illiquid and you probably won’t have to worry about CGT.


(Tony) #4

The short answer: no

The long answer: nooooooooooooooo


(Sajid Sabir) #5

Please get tax advise as I’m not tax advisor but I think the following allows you to realise more annually than the normal annual CGT allowance £11,700.

If Monzo IPOs and you keep the shares then you wouldn’t have realised your gains as you still hold shares in the company.

Hold the shares in a normal trading account and with the same broker set up a Stocks and Shares ISA. When the new ISA year begins then some brokers offer a ‘bed in ISA’ service.

This basically involves the broker selling shares in a company up to the value of £20k (annual ISA allowance) and then buying them back straight away via the Stocks and Shares ISA account. Or I believe that the £20k cash from the sale of shares can be put into a cash ISA.

Just means that if you plan of realising £11.7k a year to avoid paying CGT, you can realise more via the ‘bed in ISA’ method.


( related to Monzo CEO, Investor in Monzo ) #6

I would assume as soon as you sell the shares you have made a capital gain and it either comes off your CGT allowance or you pay the CGT - dependant on the value - surely HMT aint that silly :slight_smile:


(Mash) #7

Thanks


#8

I would have agreed with that, but will ask my broker about Bed and ISA


(Kenny Grant) #9

I think it’s called Bed and ISA and it’s only free of CGT after it is in the ISA. You’re selling shares outside the ISA, which is a taxable event. You could sell it in slowly across years though staying under limits, and future gains would be free of course. Here is a guide:

https://www.bestinvest.co.uk/stocks-and-shares-isa/bed-and-isa

CGT is unlikely to be a big problem for most investors in Monzo apart from early investors who put in a lot (I will very happily eat my words on that!).


#10

Yes I think you’re probably right


#11

If you’re married or in a civil partnership it could be wise to transfer half to him or her before crystallising gains, to make use of their capital gains allowance as well as your own.

Always seek professional advice etc


(Sajid Sabir) #12

Thanks for clearing that, I had heard about it a few years back but wasn’t 100% sure on the details.


(Jolin) #13

I think after an IPO, you could transfer some shares each year to a shares ISA (a quantity that keeps you under the CGT exemption allowance), so that over a number of years all your shares are in an ISA.


#14

That assumes they keep their value!


#15

That might be the best approach in the long term (assuming they keep their value).

Sell up to CGT allowance and transfer the max amount to isa. Rinse and repeat for a few years.