As we always seek to help our clients achieve their investment objectives as cost-effectively as possible, we often suggest that, rather than sell or transfer such investments as ISAs and unit trusts, they re-register them on one of our recommended fund ‘platforms’.
Aside from saving re-investment costs, this also means that, in the case of Unit Trusts, there does not need to be a disposal of the asset, before re-investment, thereby avoiding any potential Capital Gains Tax issues.
Whilst this exercise makes for ease of management of the funds in the future, there are one or two possible pitfalls.
Some investments that are already held on another platform may be subject to minimum transaction values, which may prevent the re-registration, or enforce the sale or switching of funds, which could incur further costs, and possible tax charges.
Certain funds that produce regular payments of dividends (e.g.Equity Income funds), could pay a dividend after the fund has been re-registered, leaving a relatively small amount remaining with the original platform/fund manager.
Our advice to clients is generally to elect to receive such dividend as a cash payment, rather than go through the whole re-registration process for a very small amount of money. This helps save time and costs all round, and makes a small contribution towards the preservation of the Rain Forests!
