basic nisa investment limit question

[bryanc]

sorry for thre basic question but understand limit for standard nisa is now 12million tops per person... presumably this includes previous investments under the old nisa... what happens when i reach the 12million limit? just means cant invest any more?
also under theold system it was 5years limit-when it reaches 5years can i just put the money into a new nisa ?will this still be counted at the original investment rate or the accrued total?
sorry for all the questions as im sure you can tell a bit confused on this..

[zeroshiki]

sorry for thre basic question but understand limit for standard nisa is now 12million tops per person... presumably this includes previous investments under the old nisa... what happens when i reach the 12million limit? just means cant invest any more?
also under theold system it was 5years limit-when it reaches 5years can i just put the money into a new nisa ?will this still be counted at the original investment rate or the accrued total?
sorry for all the questions as im sure you can tell a bit confused on this..

It's 18M tops per person. old NISA used to be handled as a yearly account (2020 NISA has nothing to do with 2021 NISA etc) so the 18M limit is not affected by your previous NISAs

https://www.sc.mufg.jp/learn/article/23 ... す%E3%80%82

旧NISA口座で投資を行っても2024年からのNISAの生涯の非課税保有限度額1,800万円から引かれることはありません。

旧NISAでは2024年以降の新規投資はできませんが、2024年からのNISAとは別枠で、それまでに投資した金融商品を一定期間非課税で保有することができます。

This means that starting 2024 everyone starts with a fresh NISA limit. The only thing to remember is there's a 3.6 limit per year (1.2M tsumitate, 2.4M growth).

[bryanc]

thanks so just to ck if my understanding correct.

1. 3.6million invested per year can stay in for every accumulating tax free?
2 total of 5yrs investing at max 3.6mil?

3.when the old nisas expire after 5 yrs -what do i do with the money from there?i presume i cant roll it over any more?

sorry-if these are silly questions

[zeroshiki]

thanks so just to ck if my understanding correct.

1. 3.6million invested per year can stay in for every accumulating tax free?
2 total of 5yrs investing at max 3.6mil?

3.when the old nisas expire after 5 yrs -what do i do with the money from there?i presume i cant roll it over any more?

sorry-if these are silly questions

1. Yes. Tax free period is forever.
2. Yes only 5 years if you did the max every year but you don't need to if you don't want to.
3. No more rollovers but you could sell it and use the money to buy into new NISA (or just leave it)

Some of these things are not so clear so its good for you to ask them and help out other people curious about it as well.

[bryanc]

thanks-just on the 3rd answer - if i sold it and reinvested then it would be the accumulated total that would count as new base investment?
(i.e. gains on the original nisa could not keep accumulating tax free )

[zeroshiki]

thanks-just on the 3rd answer - if i sold it and reinvested then it would be the accumulated total that would count as new base investment?
(i.e. gains on the original nisa could not keep accumulating tax free )

Yes that's correct. It's why, if you can manage it, it's better to just keep letting it grow. It would be a waste of the accumulated growth.

[bryanc]

agreed for the new nisa -thanks!will just put in there and forget about it!

however this wouldnt work on the old nisa as the limit is 5years isnt it..

[zeroshiki]

agreed for the new nisa -thanks!will just put in there and forget about it!

however this wouldnt work on the old nisa as the limit is 5years isnt it..

Yeah. It's a waste but if you need funds to cover the new NISA you could sell it. The tax damage will be minimal if you sell immediately after the 5 years are up (probably 0) and you can start anew with new NISA.

[bryanc]

yes-but regarding the old nisa what do you mean by its a waste? do you mean should just keep investing even if you have to pay the tax?

wouldnt i have to sell it after the 5 years anyway?

[sutebayashi]

The pre 2024 NISA accounts are still tax free, while they last.

Tax free in pre-2024 NISA, or tax free in post-2024 NISA, is all tax free.

The only time I consider selling out of my legacy, pre-2024 nisa account, is when the account is close to ending or I don’t want the fund anymore. In that case, I may want to choose the time of selling the assets, rather than hold on to them in my taxable account.

I have some old funds from my early nisa investing days that I don’t plan to hold on to in future, so these are the only ones I actively consider selling, typically in the final year of the legacy nisa account.

Maybe an example will help to illustrate. I have some holdings of MLP (shale-oil related) and broader commodity index funds. I thought they were a good idea 9 years ago, and they weren’t a disaster but a bit meh now. These are not going to go up forever like stocks, so I don’t plan to rebuy them with new NISA for the long term.
Since commodities might go down in price next year after my 2020-year NISA expires at the end of 2024, I may preemptively sell off gradually this year, my holdings of these funds in my legacy NISA account that is going to expire this year anyway.

(In my early days I didn’t have much money to invest so just bought everything in my general NISA - why not. But these days I have more to invest and so use nisa only for long term holdings.)