What's up you guys, sasha here today, i want to talk about some really interesting things about stocks and shares isis, not the things that everybody knows about just a few quirks. Maybe you know about these, maybe you don't. I just thought: i'd cover some of the points that are less commonly talked about less known and things that are just really useful to know. If you are setting up a stocks and shares account for the first time or if you already have one - and you want to manage it better now really quickly, what does the stocks and shares isa actually mean? It's an account where you can go and invest in the stock market without having to pay any taxes, i'm going to cover them to this because there's an asterisk next to the no taxes bit but anyway, we'll come to that just a little bit later.

Basically, you don't pay any kind of income tax, you don't pay capital gains tax and you don't pay any dividend tax, which is a really really huge advantage when you're trading stocks, as with any other iso account, you can go and deposit up to twenty thousand pounds. A year into the isa, if you hold any other types of iso accounts, the twenty thousand pound total applies to all of them together. So if you have another cash isis somewhere else, you can only go and put 10 000 pounds in your stocks and shares. If you already put 10 000 into the other one, as i said, i'm gon na go into the basics of exactly what a stocks and shares isa is and exactly how it works and what it does.

But let's start with the quirks, and the first quirk that i just alluded to a few seconds ago - is the fact that you still do have to pay some taxes. Now sure you don't pay the big taxes, you don't pay income tax, you don't pay capital gains tax and you don't pay dividend tax and those if you don't invest through a stocks and shares isa account, but a regular stocks and shares investment account. You will have to pay and they can be quite punitive. So in the uk you have to pay quite substantial dividend taxes if you're earning a lot of dividends through your stocks and shares portfolio.

Once you go over the 2000 threshold below which you don't have to pay anything, you don't even have to report it once you go above that you don't have to pay taxes and they're lower than basic income tax, that most people will be paying if they are Paid through pye, but they're still reasonably high same goes for capital gains taxes. If you hold stocks that appreciate over time - and you then sell them later, then you will normally have to pay capital gains tax on a difference in value between when you bought the stock and when you sold the stock and that might not sound like a big Deal, but actually that is a huge impact on how much you can earn from the stock market over time, stowing stocks and shares isis, you don't have to pay any of those things, but there are three main taxes that you still do have to pay, even if You're in stocks and shares isa account. The first is uk stamp duty. There is no getting away from that.

So if you're based in uk, you have one of these accounts and you're looking to buy a uk stock, you will have to pay a small amount of stamp duty at the point when you purchase it. That is a tax that you can't avoid. Even if you have an isa account when you buy one of these stocks, let's say you buy barclays lloyd's, bp, whatever it is that you like buying. You will notice at the bottom, usually of your transaction statement.

There'll be a little line, saying stamp duty and, generally speaking, that means that the amount of money that you're putting into the stock is not exactly the amount of stock you're actually going to be buying, because that stamp duty is going to be taken out. The other tax you have to pay is u.s withholding tax on dividend income. Now this happens. If you own u.s stocks that pay you dividends when those dividends come in, there's a dividend tax that has to be paid by residents because you're, not a u.s resident.

There's a withholding tax that applies, and that is normally 30 percent. Now the uk has a special deal with the us, which means, if you fill in a special form, you can reduce that down to 15 and most trading platforms will do that. For you, it is very, very straightforward: if you open an account, they usually go and make you do that or automatically do it on your behalf, just making your ticket box saying that you agree. That means that 15 of all dividends that you actually earned from those sources are going to be taxed at source by the us government.

So, just when you're making assumptions around how much you're going to be able to earn with your stock portfolio if you're looking at the dividend, yields over time make sure you account for that, because that can be quite a substantial differentiation between how much you think you're Going to be earning and how much you end up earning if you're planning to make a lot of your revenue from dividends now the last tax that applies probably, is one that you won't actually encounter. A lot of people don't even know it exists. It's very very similar to what i was just talking about with the us. It actually applies to a small number of different european countries, so there's two different types of taxes that some of them charge: you'll notice.

It happens in italy and a few other places. Some of them are selective, so it only applies to certain types of stocks or only applies to certain stock trading platforms, or only applies to certain markets. It does vary to some degree, you're, probably not going to experience it, because very few people actually end up buying stocks from these european countries. Most people invest in uk us, sometimes in japanese and other stock markets.

Very few people buy european shares, but if you do, you might notice that both on your dividend, income there's going to be some form of withholding tax and it differs depending on the type of stock you buy in the country that that stock is from and also Some of these countries charge a small transaction fee per trade that is also a tax. Now it is a little bit similar to uk stamp duty. You don't really have the equivalent in the us, but basically each time you make a trade there's a small amount of money that you have to pay for the privilege of making that trade. It's just something to be aware of.

If you're planning to invest in european stocks, let's get to point number two point number two is really important, and that is, unless you have some form of a managed account or you're investing in an actively managed fund. You have to reinvest any earnings that you get from your portfolio yourself. This is one where a lot of people just think, wait. What i actually have to do something other than just put money in the first time and a lot of people don't realize that they'll come and log into their account several months later or sometimes even longer than that and they'll notice, that they have a lot of Money sitting in there that's not actually invested in anything.

So each time you get some kind of dividend yield or any other payout. That money will land in your account as cash, and it will sit there as cash until you invest it in something else. So whenever you do get one of these payouts, it is really really crucial if you want to continue having all your money in that portfolio invested in the stock market to go and buy more stocks with that money. Otherwise it just sits there.

It earns no interest, it doesn't do absolutely anything now. Most of this will happen through dividends, but just make sure you go and check your portfolio relatively regularly, because there are other types of payouts that also happen, which brings us very very nicely and very quickly onto quirk number three and the quirk number three relates to Something that a lot of people are talking about which are stocks and shares splits. Now recently, you might have heard in the news that apple and tesla are both splitting their stocks. Apple is doing a four to one split.

Tesla is doing a five to one split and what that basically means is that for each share that people own of one of these companies in a few days time, people are gon na earn four times that many shares or five times that many shares there's lots Of reasons why companies do stocks, but a lot of it is to do with psychology with the way the stocks are perceived with the way they are bought and sold by casual investors, because mathematically there's no real difference if a stock is worth four hundred dollars and There's one share: when there's a four to one split: you basically get four shares worth a hundred dollars, so nothing really happens in that respect, but in terms of the quirks to do with the isa account here is something really important if you own partial shares with The majority of trading platforms that partial share that fractional share that you own will not undergo the stock split. This is something that people don't realize and don't think about. So with the majority of the big platforms. What this means is, if you own, let's say a half an apple share, you will not get two apple shares.

After the four to one stock split happens, you will get nothing. What will happen is your 0.5 of a share will be paid out on the date when the stock split actually occurs at the price at which the shares are trading at that particular point in time, and what will happen is that money will land in your account, As cash and you will then have to make a decision as to what to do with it, if you want to continue investing in apple, you then have to immediately at that point in time, go and take that money and reinvest it by buying the new, cheaper Apple shares to get the same amount invested as you previously had. You might go and do it at a later point. But you risk the market fluctuating up or down and maybe not being able to buy as much apple as you previously had or maybe being able to buy more.

It really depends. A lot of people might be thinking. My stocks and shares account is growing. I'm looking all these charts and it's going well, actually their money is actually being cashed out for them and sitting in their account doing absolutely nothing so make sure you're extremely careful again.

This is closely related to the quirk number two that i was talking about. Just a little bit earlier, when you have these types of events, make sure you go and check your portfolio. If you own fractional shares you will have in most cases, you will have to go and buy the new stocks with the cash that's being paid out. Make sure you follow the news, make sure you follow the stocks that you own and make sure you check your account regularly, because this doesn't only happen when there's a stock split whenever there's any form of acquisition of one company by another.

Whenever there's any kind of mergers happening in some of these cases, the shares don't get translated at all and they get paid out on the day at the cash value, and you will then have to make a decision as to what to do with your cash. So don't let cash just sit in your account because it will earn you absolutely nothing. The number four quirk of having a stocks and shares iso account is the ability to go and smash the like button for the youtube algorithm. I hope you have done so already, but if you haven't go and do it right now, it is so incredibly important for this video to get likes, because that's what youtube uses to go and determine if people actually enjoy watching this type of video.

It is what helps this type of video go and reach a higher audience. Reach more people help more people with the information i provide, please go and do it if you haven't done so already. I really really appreciate it. Thank you so much.

Let's move to the actual number four quick number four is something that happens very frequently. A lot of people make this mistake and end up having to pay a lot of tax as a result and actually not earning the revenues and the dividend yields and everything else. They expected from their isa account, and that is you can only set up one stocks and shares isa account per financial year with one company. Only so you can't go and set up two.

You can't go and set up one and then, a few months later you go and set up another. It is really really important because these types of things get reported to hmrc, and what will happen is when they go and do reconciliation at the end of the year in a year's time. Whenever it is, they happen to do it, they will then go and find out that you went and set up two different isa accounts in the same category, so you set up two different stocks and shares isis, and what will happen then is they'll, go and assess Those two accounts and they'll basically say the second account that you set up shouldn't, have been allowed to be set up and any earnings any dividend, income. Anything that you earned in that account will essentially be treated as though it was a regular stocks and shares account.

So all the taxes on capital gains all the taxes on dividend yields everything will have to be actually paid for, so essentially you will have lost the entire benefit of setting up a nice account. If you do that so be very strategic. Each year you can set up one account, but here's the really big important thing it's not just about setting up. You can also only pay into one account.

So this means, if in year one you're going to set up one account with one provider. Let's say it's free trade, whatever it is, if you then go and set up a second isa account in the second year with let's say trading one two, and you begin investing in that in that second year, you cannot invest in the first account you set up With free trade, even though you're allowed to keep it open, you're allowed to keep that account open you're allowed to reinvest the money - that's already in there. So if you earn dividend yields or whatever it is, you're allowed to continue reinvesting it within that account. But you can't put any more money into that account.

You can't go and put your own money in there, because that account was related to year one. This is something a lot of people forget they just kind of think. Well, i'm going to invest in these different things. I have my first account where i actually have funds in my second account where i buy the shares, i'm going to put a bid in this and a bit in that.

Don't do that because if you do that, you will have to pay taxes - probably not immediately, probably not in a year's time, but you will get that nasty hmrc letter and it's just not something you want to have make sure you're really careful in each financial year. Only open and invest in up to one isa account now, i'm talking, i said generally, i'm saying stocks and shares license. You are allowed to set up more than one isa account if they're in different categories. So if you want to have a say cash isa, as well as the stocks and shares, i say you are allowed to set up two different accounts, because they're different types of isa accounts in the same year and you're allowed to invest in both up to that.

Twenty thousand pound total, but if you're looking at stocks and shares specifically, it is just one per year that you're allowed to put your money into quote number five: they can buy you hard if you're, not careful with it, is that stocks and shares isis are not Flexible isa accounts in the majority of cases. I don't know of any that are are flexible, and this is something that people don't realize, because some other types of accounts that are isa accounts are fully flexible. So a lot of cash accounts, for example, are flexible and what this means is, if you have an amount of money invested in that iso account. Let's say you have 5 000 pounds invested.

If you then go and take 1 000 pounds out, you can then go and put the thousand pounds back in, and essentially it is counted as though nothing's changed. It basically says you still have the 15 000 remaining for that year. That you can invest in isa. Accounts at your choosing and if you suddenly need that money for a short term transaction or whatever it is, you can do that with some other isa accounts with stocks and shares that doesn't apply.

So let's say you go and put in 5 000 pounds into your stocks and shares account. If you then withdraw 2 000 pounds, you have still used the 5 000 pounds allowance of your stocks and shares isa and the total isa for the year, and you can't get that money back. You can't get that allowance back, no matter what you do so be really careful. It is very, very easy to make this mistake.

Let's say you go and put too much money into your account by mistake, and then you decide to withdraw some. You will lose your allowance for the amount you withdraw for that year and there's nothing to do about it. Sometimes let's say you have a an account where you have an isa and the same account allows you to trade in other types of stocks and shares accounts. Let's say just a regular investment account if you move money from your isa account to your other account just by pressing a few buttons that allowance will be used up and you'll be prohibited from putting any more money than the 20 000 cap into that isa account.

So be extremely careful with that, a lot of people don't realize that they put money into the iso account and they move it around and suddenly they realize that they, instead of being able to access the 420 000. The actual total cap they're able to get tax-free into that investment account is a lot less. So just be very, very careful with that now! Next, if you have a lot of money that you're planning to invest, let's say you want to invest more than 20 000 pounds. There are ways of being able to invest more than 20 000 pounds per year into isa accounts.

If you are a household, let's say you have a family, you have a husband and a wife. You are allowed to invest up to 20 000 pounds per person. So don't think just because you are investing and say your husband doesn't or your wife doesn't, that you have to do everything under your name. If you are happy to share your finances, if you both have a joint account where the money in that account is jointly owned, each person is individually allowed to go and take money.

That is their money and put it into a nice account. So if you are gon na max the 20 000 pounds on your particular isa and your husband and wife does not have an isa account, it is perfectly allowable for them to go and take their money and put it into their iso account as well. So then, you can have two lots of twenty thousand pounds, and even then you can still continue investing in a nice account beyond that. There's a whole different type of iso account called a junior isa account.

It is not as widely available. It is not as broadly known, and it is a lot more expensive, so with normal stocks and shares iso accounts, the fees are relatively low or in case of trading two one, two there's zero, so you can go and invest and actually pay nothing and see your Portfolio grow over time, but with junior accounts, there's generally going to be fees applied so with vanguard, it's 0.15 percent and it goes up to about 0.7 with wealth, simple, it kind of ranges in that territory. So that's your annual fee for being able to have that type of account you're out to invest up to 9 000 pounds a year into the junior account. So it's not the same 20 000 allowance, but it's a lot more than it was just a few years ago.

It's actually gone up quite significantly over the last few years, so if you've maxed your 20 000 or your 40 000 or whatever it is, that is the next step you might want to take just make sure you go and use the better value free account. First, and only use the junior account, if you absolutely have to there's a few restrictions with the junior isa account that don't apply to the regular isa account, which is the money has to sit there until the junior account holder turns 18, and they can then decide What to do with it? You don't have the same flexibility, so you can't go and withdraw the money. If you need it, you can't go and repurpose it for some other type of investment that money once it goes into, that account has to stay there for quite a long time. The last quirk on my list at number seven is something that a lot of people - maybe just don't, really think about when they're thinking about stocks and shares iso accounts, partly because of the name.

But actually you can invest in a whole lot more than just stocks and shares through these types of accounts, also tax-free, and that is really important, because some people just don't want to have an actively managed portfolio where they're choosing the stocks that they put money in. For a lot of people, it doesn't make sense because actually investing in index funds and other types of funds will return you the same or better returns than trying to do it yourself, in fact, for the majority people that will be the case, and it's just so Much more passive and so much more easy to manage, because the money is automatically reinvested. You don't have to worry about stocks moving up and down and trying to manage the distribution of your portfolio or any of those things. All of that gets managed for you and you can go and invest in etfs and index funds and all of that stuff through a lot of these different trading platforms.

I personally use trading to one two for my ice account this year. I have a separate video. I'm gon na link up here and i'm gon na link in the description below where i talk about how to get started with trading into one two. I have an affiliate link if you're interested in joining through that you will get a free share and i will also get a free share up to 100 pounds in value.

Most of them are probably around the 910 pound value territory. So if you're interested getting a free stock go and use my link below, i really appreciate it again. Thank you so much! But anyway, if you go and use your trading 212 account, you can go and invest in a vanguard account. You can go and invest in the ftse 100 and ft 250.

In the s p 500. You can buy commodity funds, real estate funds, there's a lot of different stuff that you can put money into that isn't individual stocks and shares and if you like your investments to be more diversified, if you like, having investments in funds or etfs or anything like that, You can still go and do that through. The isa account just be aware that if any of those types of investment accounts have any fees associated, you will still have to pay those annual fees they're, not taxes, so they don't get deducted just because it's a nice account just go and check exactly where you're Investing into, but you can go and invest in a huge number of things through your iso account, so go and explore your options and make the choice. That's right for you.

I hope you guys found this useful. If you have please again, just go and smash that like button, if you haven't done so already, it's really really helpful for a video like this to go and reach a broader audience if you're interested in content that i produce, that is all about personal finance. All about investing all about making more money and doing more with the money that you have make sure you subscribe to this channel. That's what i talk about on this channel in every single video make sure you go and hit that bell.

So you get notifications every single time. One of my videos comes out. Thank you very much for watching and i'll see you guys that later would never leave.