That's what she is promoting though. Pushing people to stocks and share ISA products will just mean people will invest in whatever provides the best returns; that isn’t UK stocks.
Best savings account?
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Well, hopefully it's a step towards limiting the S&S ISA to UK-listed stocks.
It's absolutely insane we give this massive tax break for people to invest in the USA.
How does reducing the cash ISA allowance give tax breaks to subsidise US businesses?
The lowering of the allowance is nothing more than a tax cash grab. The media are reporting £15B went into cash ISAs last year, the Government just want a slice of the tax interest earnt on that cash - they don't actually care about investing in S&S.
It's a dumb idea anyway as I'll just hold my cash in a S&S ISA wrapper and still get a comparable interest rate.
I understand the principal but a pretty challenging ask considering I suspect the savvy amongst the populace already have large chunks in oversea stocks with various instruments, including ISA wrappers.
Presumably, transferring cash isas in to UK based but offering non-UK instruments will be restricted too? Sounds like it is going to be messy with potential challenges from the various providers out there, along with building societies.
It wouldn't be that challenging to change the rules at the end of a financial year and leave existing ISAs alone.
There is already a whitelist of stocks that are allowed inside an ISA, so the mechanism is already there (I know this because I held a stock in an ISA that was removed from the whitelist).
The government knows the UK has a problem with people hoarding cash and it hurts their long time prospects.
If they wanted more tax revenue they'd be cutting the S&S allowance as well and introducing ISA caps etc.
Equivalent cash rates from brokers are usually lower than cash ISA rates anyway, you'd at least need to choose a product like a MMF.
It would be tricky. You cant just say UK listed either because many UK listed investment trusts for example are heavy into US stocks. Not everyone is 100% USA in their ISA though so presumably they want some of it going into UK stocks via encouragement. They need to do other things like removing stamp duty, its crazy we have to pay to invest in UK shares but not e.g US ones.
Is there? Is that list documented anywhere and how does it apply to say the likes of T212 or eToro, who seem to be offer any global index / stock under the sun.
Yes. I know this because a stock I held was removed from the list, and I was very surprised to see it get automatically sold one day. It was Polestar (SPNY). It had actually erroneously been made available inside the T212 ISA which they had to undo.
I had to buy CMPS outside my ISA as well as it’s not available inside.
Interesting. I wonder how on earth and who maintains that considering the sheer amount of options available on these platforms.
Well there’s a list of rules you can find on gov.uk. I suspect there is a bit of back and forth between gov and ISA providers, as with all things finance things are rarely black and white.
Compass Pathways is a really promising UK biotech company, but I don’t get ISA relief for it, but stupid really.
It does seem rather counter-intuitive to limit investments in UK stocks via isa wrappers. The cynic in me, tells me this exercise is all about the UK gov wanting you to invest in certain stocks only.
I can see this new "initiative" being an utter shambles, if it ever comes to fruition.
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Let's say I already have a Stocks & Shares ISA that holds stocks from around the world. Does this mean the gains from those shares would now be subject to tax or would the non UK stocks be automatically sold at any price, as another poster suggested? ( i can see that causing problems for many). I do wonder if this has nothing to do with US stocks and is simply another tax grab.
Seems like an unknown at the moment, might not even happen but yes this and freezing income tax thresholds and whatever else they have planned does just seem to be increased taxation by the backdoor.
I would be pure insanity to try and retrofit new isa regulations to existing investments, with the exception perhaps of specific individual stocks as highlighted by @mid_gen. Whatever may come will likely be targeted to new investment only.
More detail to come at the Mansion House speech on the 15th.
Soldato
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its its just going to make people want to leave the UK even more
Wait until they start means testing our pensions.
I think everybody and their dog knows this will happen in the next 10 years or so. If the political parties had any balls, they'd all agree to roll NI into general income taxation and then implement a staggered roll-out of a means-tested version of the state pension. It is going to happen; get on with it.
I have a cash isa
I don't think a means tested state pension would work... A lot of self employed people would simply stop contributing to NI and investing the money instead or use it to grow thier business.
Why would they pay full whack knowing full well they may not get the full pension?
Massive cluster cluck, that would be.
I don't think a means tested state pension would work... A lot of self employed people would simply stop contributing to NI and investing the money instead or use it to grow thier business.
Why would they pay full whack knowing full well they may not get the full pension?
Massive cluster cluck, that would be.