Bed and ISA: How to Move Your Investments Into an ISA Before 5 April 2026

With the 2025/26 tax year ending on 5 April 2026 — and Easter weekend arriving just two days before — the clock is ticking for anyone who wants to shelter their investments from the taxman.

One of the most effective strategies available right now is the bed and ISA — a simple two-step process that moves your investments out of a taxable account and into a tax-free Stocks and Shares ISA. If you hold shares or funds in a General Investment Account (GIA), this could be one of the most valuable things you do before the tax year closes.

Here’s everything you need to know before the deadline hits.

What Is a Bed and ISA?

Despite the slightly odd name, the concept is straightforward. A bed and ISA involves:

Selling investments held in your General Investment Account (GIA)
Immediately buying them back inside a Stocks and Shares ISA

The result? You end up with exactly the same portfolio as before — but going forward, all gains, dividends, and interest earned inside the ISA are completely tax-free, forever.

The name comes from an old strategy called “bed and breakfasting,” which involved selling shares overnight and rebuying them in the morning purely to crystallise a gain or loss for tax purposes. HMRC eventually blocked that loophole, but the bed and ISA version remains fully legal — because you’re moving money into a different type of account, not just resetting your cost basis.

Why It Matters More Than Ever in 2026

This is not a strategy reserved for the ultra-wealthy. Thanks to a series of tax changes, more ordinary investors than ever before are facing unexpected tax bills on their investments.

Capital gains tax rates rose sharply in October 2024. Basic rate taxpayers now pay 18% on investment gains (up from 10%), while higher and additional rate taxpayers pay 24% (up from 20%). These are significant jumps.

The annual CGT allowance has been slashed. You can now only realise £3,000 in gains per year before CGT kicks in — down from £12,300 just a few years ago. Many investors who previously had no tax to worry about are now being caught by this.

The dividend allowance has all but disappeared. Investors can now receive just £500 in dividends per year tax-free, down from £5,000 as recently as 2017/18. If you hold income-producing shares or funds in a GIA, this is costing you money.

Taken together, the case for sheltering your investments inside an ISA has never been stronger.

How a Bed and ISA Transfer Works: Step by Step

The process is simpler than it sounds, and many modern platforms handle most of it for you.

Step 1: Check how much ISA allowance you have left

You can invest up to £20,000 per person in an ISA in the 2025/26 tax year. This is the maximum you can transfer through a bed and ISA in a single tax year. If you’ve already contributed to an ISA this year, subtract that from your remaining allowance.

Step 2: Identify which investments to move

Consider which holdings in your GIA have the most to gain from being sheltered. Shares that pay regular dividends, funds with high expected growth, or holdings you plan to hold for the long term are the best candidates.

Step 3: Sell in your GIA

You sell your chosen investments in your General Investment Account. This triggers a CGT event — you’ll pay tax on any gains above your £3,000 annual allowance. If you’re selling at a loss, that loss can actually be used to offset other gains you’ve made this year.

Note on the 30-day rule: Normally, selling and rebuying the same shares within 30 days means the gain or loss is not recognised for tax purposes (the “bed and breakfasting” rule). Crucially, this rule does not apply when you rebuy inside an ISA. You can immediately repurchase the same shares inside a Stocks and Shares ISA, with the gain fully crystallised and all future growth permanently sheltered.

Step 4: Use the proceeds to buy back inside your ISA

The cash from the sale is used to repurchase the same investments inside your Stocks and Shares ISA. On platforms like Freetrade and Trading 212, this process can happen on the same day.

Step 5: Going forward, pay zero tax on growth

Once your investments are inside the ISA wrapper, dividends, interest, and capital gains are all tax-free for life. You never have to report them to HMRC.

How Much Could You Save?

Here’s a simple example. Suppose you hold £15,000 of a global index fund in a GIA. You bought it for £9,000, so you have a £6,000 unrealised gain.

You sell the fund and realise the £6,000 gain
Your CGT allowance covers the first £3,000
You pay CGT on the remaining £3,000 — at 18% (basic rate) that’s £540, or at 24% (higher rate) £720
You immediately rebuy the same fund inside your ISA
All future growth on that £15,000 is now permanently tax-free

If that fund grows by another £10,000 over the next decade, a higher-rate taxpayer would have faced a £2,400 tax bill — avoided entirely because of this one move.

The 2026 Deadline Is Earlier Than You Think

This is where many investors get caught out. Although the tax year technically ends at midnight on 5 April 2026, the real deadline for a bed and ISA is significantly earlier.

The sale, settlement, and repurchase process takes time — typically 5 to 10 business days from start to finish. Platforms need to process the sale, receive the settlement funds, and complete the ISA purchase before the year ends.

This year, the deadline is even tighter. Good Friday falls on 3 April 2026, creating a long Easter bank holiday weekend right at the end of the tax year. Financial markets are closed, platforms are not processing transactions, and many providers have moved their internal cut-off dates forward to mid-to-late March as a result.

Some providers — including Fidelity — have already set their bed and ISA deadline as early as 27 March 2026. If you’re planning to do this, the time to act is now, not in a few weeks.

Which Platforms Support Bed and ISA?

Two of the most popular platforms for UK investors both support the bed and ISA process, and both are worth considering if you don’t already have a Stocks and Shares ISA in place.

Freetrade offers a commission-free Stocks and Shares ISA with no annual account fee on its standard plan. It supports the bed and ISA process and has recently scrapped ISA fees across its subscription tiers — making it one of the most cost-effective options for investors moving money before the tax year end. Freetrade also has a tax year end offer running for 2026.

Trading 212 offers a commission-free Stocks and Shares ISA and supports in-app bed and ISA functionality. Its platform is known for its clean interface and fractional shares, which is useful if you want to move a precise amount. The ISA itself charges no platform fee.

Both platforms allow you to hold thousands of UK and international shares and ETFs inside your ISA, making them well-suited to a wide range of investment strategies.

Important: Neither platform charges for the bed and ISA process itself, but you will still be liable for any CGT triggered by the initial sale in your GIA. Check your gains for the year before proceeding, and consider speaking with a financial adviser if your situation is complex.

Bed and ISA Platform Comparison (March 2026)

Not all investment platforms offer Bed and ISA. Here is a comparison of the major UK platforms that support the process, along with their fees and features to help you choose the right one.

Platform	Annual Fee	Dealing Fee	Bed and ISA?	Best For
AJ Bell	0.25%	£3.50	Yes (automated)	Beginners
Hargreaves Lansdown	0.45%	£11.95	Yes (automated)	Research tools
Interactive Investor	£4.99/mo	£3.99	Yes (automated)	Flat-fee value
Fidelity	0.35%	Free (funds)	Yes (automated)	Fund investors
Vanguard	0.15%	Free	Manual only	Low-cost index

Platforms offering an automated Bed and ISA service handle the sell-and-rebuy process for you, which saves time and reduces the risk of error. If your platform only supports a manual process, you will need to sell in your General Investment Account and then repurchase within your ISA wrapper yourself, keeping a close eye on timing.

Is a Bed and ISA Right for You?

A bed and ISA makes the most sense if:

You hold investments in a GIA that have grown in value and you expect them to continue growing
Your projected future gains and dividends would exceed what you can receive tax-free each year
You have remaining ISA allowance this tax year (up to £20,000)
You have time to complete the process before your platform’s cut-off date

It makes less sense if your GIA holdings are sitting at a loss (though you could still crystallise the loss for tax purposes), or if you’ve already used your full ISA allowance for the year.

Act Now — The Window Is Closing

With under three weeks until most platform deadlines, this is one of those rare moments where doing something today genuinely matters. The £20,000 ISA allowance for 2025/26 disappears on 5 April and cannot be reclaimed. Investments left in a GIA will continue to attract CGT and dividend tax that a simple transfer could have avoided.

If you’re not already invested in a Stocks and Shares ISA, Freetrade and Trading 212 are both strong, cost-effective options to get started quickly.

Capital at risk. ISAs are not guaranteed investments. Tax treatment depends on individual circumstances and may change. This article is for informational purposes only and does not constitute financial advice. Always check current rules and platform deadlines before acting.

Frequently Asked Questions

What is the Bed and ISA deadline for 2026?

The ISA allowance for the 2025/26 tax year must be used by 5 April 2026. However, most platforms recommend completing Bed and ISA transfers at least 5-7 business days before this date to allow for settlement times. This means you should ideally start the process by late March 2026 at the latest.

Does a Bed and ISA trigger capital gains tax?

Yes, selling investments in your General Investment Account is technically a disposal for capital gains tax purposes. However, you have a tax-free capital gains allowance of £3,000 per year (2025/26). If your total gains across all disposals are below this threshold, you will not owe any CGT. For gains above £3,000, you would pay 18% (basic rate) or 24% (higher rate) on the excess.

Can I Bed and ISA with a cash ISA?

Bed and ISA specifically refers to moving investments from a General Investment Account into a Stocks and Shares ISA. If you hold cash savings outside an ISA, you can simply deposit cash into a Cash ISA directly, which is a much simpler process with no tax implications.

How long does a Bed and ISA take?

On platforms with an automated Bed and ISA service, the process typically takes 3-5 business days. Manual transfers may take longer depending on settlement times. Funds usually settle in 1-2 days, while individual shares can take 2-3 business days (T+1 settlement).

Is the ISA allowance really dropping to £12,000?

Yes. From April 2027, the annual ISA allowance for people under 65 will be reduced from £20,000 to £12,000. People aged 65 and over will retain the £20,000 limit. This makes using your full £20,000 allowance in the 2025/26 tax year (ending 5 April 2026) especially important.

Rate Disclaimer: All rates, fees, and product information in this article were accurate at the time of writing (March 2026). Rates and fees can change without notice. Always verify current details directly with the provider before making financial decisions. SmartMoneyHQ does not provide personal financial advice. If you are unsure about investing, consider speaking to a qualified financial adviser.

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