To roll or not to roll, that is the question
I just got an email from Rakuten Securities announcing the NISA rollover for a 2014 NISA can be processed between October 1st and December 14th.
This got me thinking. Do I want to roll over my holdings? What does rolling over entail? Is it better to roll over or buy new things in 2019?
This is the first time I have had to deal with this, so this post will be a good chance to learn about the system and decide what to do.
Here's my current understanding of the system:
When your NISA tax-free period of five years ends, your investments are moved out of the account and the 'purchase price' is reset. This is the mechanism that allows you to avoid capital gains tax*
*it is also the source of the NISA account's main weakness -if your investments have fallen in price the price will be reset lower than your purchase price, exposing you to capital gains tax on the full recovery.
However, you can instead choose to roll over the investments into a new NISA account. This will use up your NISA allowance for that year. You also need to choose an ordinary account for that year (not a tsumitate NISA one).
You can now roll over more than 1.2 million yen, so if your investments have done really well rolling them over might be a bit of a no-brainer.
Here are my holdings for the 2014 NISA year. On the one hand they are a great example of how you will learn a lot through getting started investing, but on the other they are a bit of a waste...
If only I had put the whole year into index funds... or Altria ;)
Looking at those holdings, I am not sure what to do. The total value is under 1.2 million, so there is not a case for moving the whole amount to 'increase' my 2019 allowance.
I guess I have three options: I can let things move into my 特定口座, I can roll things into my 2019 NISA, or I can sell things. Or some combination of the three (I believe you can treat different investments differently).
Should I sell the losers because I'll be exposed to capital gains tax on any recovery? Sell the winners because we're overdue for a correction? Or follow my instinct, which is just to put everything in the 特定口座 and keep collecting dividends for the next forty years?
What would you do? What will you do, if you have a NISA account coming due? Any thoughts?