RetireJapan

Hello everyone,
My question is in subject, I'll try to explain a bit
Lets say I bought SPY ETF, this year, using NISA account. After few months I sell it with profit, which is tax-free because of NISA. After few months I buy same SPY ETF, and sell it again with profit later. All within same year.
So I buy and sell same asset (SPY) twice a year, both time with profits.
Will it be tax free both times I sell? Or only fist time?
Thanks in advance!!

If the second time you buy the ETFs you still have NISA allowance and use that to buy it, then yes, the second time you sell will also be tax free. But remember that selling NISA assets does not free up that allowance. Once you have bought something in a NISA account, that allowance has been used and can't be reclaimed. So say you bought 1.2mil of whatever ETF you want in NISA in January, then sold it at a profit 2 months later in March, you would not incur capital gains tax, but now your full NISA allowance has been used, so anything you buy in that calendar year will be in a regular, non-tax advantaged account. So the next time you buy and then sell at a profit, you will incur capital gains tax.

If in January, you bought 600,000 worth of an ETF, then 2 months later sold it for 700,000 (because it made some incredible gains) you would still have 600,000 of you NISA allowance left, so you could then buy another 600,000 of something in your NISA account (1.2mil limit - initial 600,000 purchase = 600,000 remaining), and you sold it at a profit, that would also be free of capital gains as it was in a NISA account.

Tony, thank you so much for detailed reply! Really appreciate.

If it's all it's all about yearly amount, not the asset name as I thought - that's not good, cause the amount is quite small....

May I confirm.
So if I buy any ETF in January for 1.2mil, (or 2 ETFs for 600,000 each), and sell them all with profit in March.
Means my "NISA allowance" has been entirely used, for this year? And whatever I buy after that, in the same year, will not be tax-free anymore?
Correct?

HeavyMetal wrote: ↑Wed Mar 11, 2020 9:28 pm Tony, thank you so much for detailed reply! Really appreciate.

If it's all it's all about yearly amount, not the asset name as I thought - that's not good, cause the amount is quite small....

May I confirm.
So if I buy any ETF in January for 1.2mil, (or 2 ETFs for 600,000 each), and sell them all with profit in March.
Means my "NISA allowance" has been entirely used, for this year? And whatever I buy after that, in the same year, will not be tax-free anymore?
Correct?

Yup - that's correct. Which is why NISA is not a particularly good vehicle for trading. It is more designed for long term investments.

Thanks a lot for confirmation, eyeswideshut!