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