Selling shares - available NISA space

[JapHans]

Hi all,

Here’s a question from a NISA rooky.

I bought shares in my 2023 NISA space.
All good here.

Now I sold these shares with gain, but the cash doesn’t seem to stay in my NISA space……

I though you should be able to trade (buy, sell, buy, sell) within the NISA space, as long as you stay within the initial max ¥1.2M for the year. I have not added any case, but thought you should be able the re-invest NISA funds.

I am wrong in my assumption?

Thanks,

Hans

[zeroshiki]

Yes, you're wrong. The current NISA only allows 1.2M purchases within the NISA account per year (assuming you're using regular). Selling anything doesn't give you back that space.

The new NISA coming next year will allow you to sell to get back the 18M lifetime NISA limit but we don't know if the per year limit will still exist (my gut feeling says it will)

[beanhead]

NISA is not designed for trading. It is more suited to buy and hold.

For trading, taxable account is better.

[JapHans]

Yes, you're wrong. The current NISA only allows 1.2M purchases within the NISA account per year (assuming you're using regular). Selling anything doesn't give you back that space.

The new NISA coming next year will allow you to sell to get back the 18M lifetime NISA limit but we don't know if the per year limit will still exist (my gut feeling says it will)

Thanks, that's helpful to know.
I was trying to get hold of SBI to get clarification, but a whole day of calling and getting disconnected (too busy) didn't get me any closer.
Anyway, I was lucky enough to get 14% gain on that transaction, so wanted to realize that gain.
Still, if I would have known that my NISA space would not free up, I may have decided differently.

I am interested to see how the new NISA is going to work from an available room point of view, per year and lifetime, when trading.

[JapHans]

NISA is not designed for trading. It is more suited to buy and hold.

For trading, taxable account is better.

Thanks.
No big issue, because of the gain I realized, but I should have known this upfront.

[sutebayashi]

I am interested to see how the new NISA is going to work from an available room point of view, per year and lifetime, when trading.

Current NISA is a different story, but for NISA from 2024, you could theoretically buy 2.4 million yen worth of something for short term trades and then if you sell what you bought within the year, then the following year you’d have your entire allocation available for trading again. Theoretically this could continue forever.

Since you will struggle to make huge profits each year on this principal of 2.4 million yen, it alone would not be that attractive for trading, unless you are just starting out and don’t have much to gamble to begin with.

Worth noting that buy and hold for the long term is pretty much a sure bet, but short term trading is not. NISA will save you 20% of taxes due on profits, but if you don’t have profits to begin with then it’s a waste of NISA.

I keep my speculation in forex, futures and CFD accounts, and pay the tax on profits, and keep NISA for buy and hold.