“Bedding" an ISA is when you transfer any of your existing investments elsewhere into an ISA account, using part or all of your ISA allowance for the year. Usually this comes from existing 'GIA' accounts (General investment account).
In a 'Bed and ISA' transfer, you sell the investments in your GIA and then reinvest the proceeds in an ISA, to make the most of your tax-free allowance.
Any funds transferred in a Bed & ISA contribute towards your annual £20,000 ISA limit. So, by reinvesting the proceeds in an ISA, any gains you make on your investments will be tax-free.
There are separate ISA rules for inheritance tax, and keep in mind that selling your existing investments in your GIA could lead to a capital gains tax liability.
If you have an existing GIA with Octopus Money, you can request a 'Bed and ISA' transfer to a new or existing ISA that you hold with us.
At Octopus Money all our transfers are made in cash, so we do not offer a 'Bed and ISA' transfer in option if your investments are held elsewhere. You can still use the above method to make your investments tax efficient; simply sell existing investments then transfer the cash to your Octopus Money account.
Please note: we can not give tax advice, and ask that all clients do their own due diligence. You can find out more about capital gains tax here and the rules and regulations around ISA accounts here.