Converting OEIC to ETF without a taxable event

[meseret]

Hoping somebody here can help me with sorting out my portfolio.

I have about £300k on Hargreaves Lansdown: £160k in a regular Fund & Share account, £73k in a F&S ISA, both mostly all invested in OEICs tracking the S&P and European equities. The rest is held in a cash saver.

I’ve belatedly realized, however, that H&L’s fee structure penalizes OEICs, as you incur a 0.45% charge on your holdings, while ETF fees are capped at £45. This means I’m now paying almost £800 in annual fees, which seems like it will be a big drag on future gains.

So I want to convert all my OEICs into similar ETFs, but closing my positions would incur a hefty capital gain at this point. I asked a H&L advisor if I could swap between fund types without incurring a taxable event, and they said that wasn’t possible (though I saw on reddit somebody else saying H&L allowed them to when they threatened to leave.)

Other option is to transfer my OEICs to a service with lower flat fees.

So any tips? Do I stick with what I’m doing, and avoid the taxable event, or bite the bullet and avoid ever-rising fees.

Thanks!

 

[dpowerz]

@meseret All you can do is move the Fund & Share account to a broker that doesn't charge a fee on OEICs.

Iweb probably makes sense.

Each year I assume you are selling down an appropriate amount to harvest the CTG allowance?

 

[harley]

@dpowerz Yep, just transfer everything to iWeb and pay zero ongoing platform fees.

You could always continue buying funds in HL (for no dealing charge), then periodically transfer to iWeb.

 

[mapiooon]

@meseret It's not possible. You're disposing of one thing and acquiring another.

It's a tax question not a broker question. Even if HL swap one for the other without ever crediting the cash to your account, it's still a taxable event.

Transfering to a cheaper broker sounds the easiest solution.