End of 2018/2019 tax year, some new ideas and modifications in portfolio

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So many things has been changed last weeks! Not only in my portfolio, but also in mindset. Of course, main target is still the same: to accumulate shares and increase passive income from dividends. For this concept I decided to add some useful loopholes. It’s why I don’t have British American Tobacco, Imperial Brands and Playtech shares – so all of those which I listed in previous post written on 12th of February. What happened? Playtech declared dividend which is much, much below my expectations. But price of shares increased, so I was happy to sell this one and invest in different company. British American Tobacco and Imperial Brands I sold the day before yesterday, but it’s temporary.

As you probably know, we’re just one week before new tax year. It means also fresh allowances on ISA accounts – including Lifetime ISA. I wrote about this kind of product in my previous post, so if you read it already, you should to know that I opened one for myself on beginning of February. Based on strategy to invest £1000 every single month, I should fill whole of the available allowance in July (4th month of new tax year). But when I started to invest in January, my first platform was taxable Degiro. Because both of companies – British American Tobacco and Imperial Brands – increased a lot, I decided to sell them on Degiro platform, withdraw money and 6th of April will deposit this money on AJ Bell YouInvest platform where my LISA is provided.

I sold all of shares from Degiro for £2252.56 (£568.08 for 18 shares of BAT and £1684.48 for 64 shares of IMB). In my opinion it’s quite good result, because my cost for them in January was £1966.59. Profit of £285.97 is great in less than 3 months, especially yesterday I also got my first dividend for IMB shares: exactly £41.89. Small BAT dividend for BAT shares is expected 8th of May and it will be exactly £9.14. So if I won’t re-buy those shares, my total income would be exactly £337. Now about Degiro’s cost (stamp duty, commissions etc). In general I paid £1.76 for deposits, £9.82 for stamp duty, £5.66 for Degiro’s buying fees and £3.99 for their selling fees – so £21.23 in total. I will have to pay fees in AJ Bell YouInvest again £9.95 per deal and stamp duty again. But it’s fine, because benefits are huge. Of course, price of those shares could increase during next days, however I don’t expect this. If it will increase a lot anyway, I will consider to invest in different undervalued shares.

What exactly gave me transfer money from one platform to another one? First of all, I will allocate my shares in tax-free account (ISA). But the most important factor is fact that I’m going to fill my LISA allowance much, much faster than in July (what I mentioned earlier in this entry). Including IMB dividend I’ve withdrawn £2307.59 from my Degiro’s account (slightly £2308). 25% of this amount equals £577 and this amount government will top-up my AJ Bell YouInvest LISA account in May and I’ll be able to buy next shares which will generate me next dividends straight away. Of course, I’ll add also my monthly £1000 investment, so in total April’s investment will use £3308 of £4000 of my LISA allowance. So in May I’ll be able to top-up this account by almost £700 only. Rest of my monthly investment (around £300) I plan to invest in new, stocks & shares ISA account which will be opened on the end of April. It’s a bit chaotical, but hopefuly you got idea.

Now about Playtech. Well, this company disappointed investors I guessed, because they cut forecast dividend by whopping 33.7% and probably they’ll do it again in next year by 18.1%. I bought 623 shares of this company for £2406.65 on the 8th of February and sold them for £2580.52 exactly two weeks later. It’s £173.87 in profit, but I had to pay 2 x £9.95 dealing fee (for buy and sell) and £12.03 for stamp duty. It’s still £141.94 of pure profit, but I have to say one important thing here. This income relied only on luck and it’s not a reason to be proud of. Anyway, it unlocked around £2550 which I invested in…

ITV. It’s one big company from media sector here, in UK. Because dividend value and share price ratio was very high, I decided to invest in this company. 1895 shares of ITV landed in my portfolio. Each share costed me almost £1.35, in total I paid £2551.24. Ex-div date for ITV will be 11th of April and dividend’s amount is declared already: £0.054 per share. It means that 23rd of May I’ll receive £102.33. At least, because I’m really considering to buy more shares before 11th of April.

Because I transfered my Help-To-Buy ISA from Barclays to AJ Bell YouInvest’s Lifetime ISA account and amount was exactly £2424.27, it means that still I had £1575.73 of free LISA allowance which I should use before 5th of April (end of tax year). So I deposited this amount (the difference between £4000 and £2424.27) into my LISA account and bought 589 shares of Royal Mail Group. I mentioned about it in my previous entry. Price was great, but who knew that a few weeks later it will be much lower. Anyway, my purchase price for those shares was £1557.78. This way my plan for 2018/2019 tax year has been completed.

What happened in February and March in shortcut:

  • 22nd of February: sold 623 shares of Playtech (£4.14 per share)
  • 22nd of February: bought 1895 shares of ITV (£1.35 per share)
  • 6th of March: bought 589 shares of Royal Mail Group (£2.64 per share)
  • 28th of March: sold 64 shares of Imperial Brands (£26.32 per share)
  • 28th of March: sold 18 shares of British American Tobacco (£31.56 per share)
  • 29th of March: received a dividend for IMB shares (£41.89 in total)

Detailed explanation I described in previous paragraphs, as well as some of future plans. Anyway Brexit have huge impact on the market and everything is changing very fast. Because I don’t plan to invest more before 8th of April (first working day in new tax year), next decisions will be made immediately after next weekend.

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