UK Chancellor Jeremy Hunt is poised to unveil a significant overhaul to the individual savings accounts (Isas) system on Wednesday, aiming to modernize the platform and resolve ongoing issues with HM Revenue & Customs. The anticipated reforms include measures that would allow investments in illiquid assets through fractional shares and long-term asset funds.
The government’s plan also involves the introduction of an online portal designed to facilitate the funding of multiple Isas within a year. This strategic move is expected to simplify the Isa system, making it more accessible for investors and potentially settling disputes related to high-value US stock investments.
Key elements of the proposed changes are:
Easier fund transfers between providers to encourage flexibility for savers.Maintaining tax exemptions on savings interest and gains, preserving the core benefits of Isas.
Despite the current £20,000 allowance threshold for Isas, subscription statistics indicate that many users do not fully utilize this limit. In light of these findings, the forthcoming reforms may pave the way for an increase in the allowance threshold. AJ Bell anticipates that these adjustments could result in a more user-friendly Isa regime. This development comes at a critical time as the government prepares for fiscal decisions post-April’s Budget and ahead of the upcoming election, which could influence their final economic strategies.
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Source: Investing.com
