Hunt to Overhaul ISAs this autumn

SJMALBA

Jeremy Hunt plans Isa overhaul to boost share ownership

https://archive.ph/W0lmD#selection-1563.0-1563.55

friolento

ColdIron said:

friolento said:

I am very happy with a single S&S ISA but the last thing I would want is to have just one ISA overall

I don't think that is what is being suggested, i.e. a single ISA account full stop

Instead I read it as enabling access to cash ISA rates from commercial providers within an investment account such as HL's Active Saving and vice versa

Appreciate that there are people who would sacrifice the best rates for the convenience of a single logon. I am not one of them. Only time I used HL Active Savings was when it was possible to make a few quid from their signup bonus. They have not had anything attractive since. I can’t see that change with ISAs

Albermarle

One radical option being considered is an additional Isa allowance for investing in UK companies, according to these people, although this work is said to be at a preliminary stage

Defining what a UK company is could be quite tricky.

For example they could be listed in London, but have a majority of foreign ownership.

They could be listed in London, but 100% of their main activity could be overseas.

They could have a substantial activity in UK with thousands of employees, but have their HQ in another country for tax reasons ,

Etc Etc

SJMALBA

Albermarle said:

One radical option being considered is an additional Isa allowance for investing in UK companies, according to these people, although this work is said to be at a preliminary stage

Defining what a UK company is could be quite tricky.

For example they could be listed in London, but have a majority of foreign ownership.

They could be listed in London, but 100% of their main activity could be overseas.

They could have a substantial activity in UK with thousands of employees, but have their HQ in another country for tax reasons ,

Etc Etc

From the article:
'Officials were keen to explore ways of using the accounts to boost investment in UK-listed companies...'

Section62

friolento said:

ColdIron said:

friolento said:

I am very happy with a single S&S ISA but the last thing I would want is to have just one ISA overall

I don't think that is what is being suggested, i.e. a single ISA account full stop

Instead I read it as enabling access to cash ISA rates from commercial providers within an investment account such as HL's Active Saving and vice versa

Appreciate that there are people who would sacrifice the best rates for the convenience of a single logon. I am not one of them. Only time I used HL Active Savings was when it was possible to make a few quid from their signup bonus. They have not had anything attractive since. I can’t see that change with ISAs

HL ActiveSavings are quite good for short-term fixes (e.g. 3, 6 9 month terms), and often a given bank will only offer that term/rate via ActiveSavings and not offer it directly to customers.

Horses for courses.

Linton

The proposals as reported by the FT seem unbelievably ill-considered.....

1) Companies don't benefit directly from people buying their shares on the stockmarket, the money goes to the seller,

2) Many FTSE companies generate significant wealth abroad, a significant part of the wealth generated in the UK is by foreign registered companies. So it is a verry ineffective way of increasing UK investment.

3) The ideas appear to be solely related to direct buying of shares.  It is difficult to see how they would work with a global tracker.  For most people buying shares directly is completely nappropriate - they would be much better advised to use funds.

4) As a matter of public policy I think the £20K annual allowance is far too high - it makes S&S ISAs more of a generous tax avoidance option for the moderately wealthy than an encouragement for the average working person to invest more of their money.  Having extra allowance for buying "UK" company shares seems to be doing the wrong thing for the wrong reason.

coastline

All into one ISA at 20K a year . Then as a bonus free from IHT. 

Jeremy Hunt plans Isa overhaul to boost share ownership | Financial Times (ft.com)

friolento

Section62 said:

friolento said:

ColdIron said:

friolento said:

I am very happy with a single S&S ISA but the last thing I would want is to have just one ISA overall

I don't think that is what is being suggested, i.e. a single ISA account full stop

Instead I read it as enabling access to cash ISA rates from commercial providers within an investment account such as HL's Active Saving and vice versa

Appreciate that there are people who would sacrifice the best rates for the convenience of a single logon. I am not one of them. Only time I used HL Active Savings was when it was possible to make a few quid from their signup bonus. They have not had anything attractive since. I can’t see that change with ISAs

HL ActiveSavings are quite good for short-term fixes (e.g. 3, 6 9 month terms), and often a given bank will only offer that term/rate via ActiveSavings and not offer it directly to customers.

Horses for courses.

I do check the HLAS rates regularly. Since December 2019, I can recall one occasion at which they had a rate which was better than what I could get elsewhere. I found similar with Raisin. I don't check Flagstone or AJ Bell.

The signup offers might make it a better deal than you can get directly. This is why I got a my HLAS account. But this is a one-off opportunity only.

As I said, I appreciate that there are people who would sacrifice the best rates for the convenience of a single logon, and that is fine by me. It doesn't do anything for me though.Not least because I don't want to pay HL more than I already do for administering my SIPP.

TheAble

Linton said:

The proposals as reported by the FT seem unbelievably ill-considered.....


4) As a matter of public policy I think the £20K annual allowance is far too high - it makes S&S ISAs more of a generous tax avoidance option for the moderately wealthy than an encouragement for the average working person to invest more of their money.  Having extra allowance for buying "UK" company shares seems to be doing the wrong thing for the wrong reason.

It's a fair point but at the same time he is whittling down the annual CGT allowance for unwrapped investments quite aggressively. I'd personally welcome an additional allowance on top of the 20k; hopefully UK trackers would be permitted but even if not I wouldn't mind being limited to single names.

wmb194

Linton said:

The proposals as reported by the FT seem unbelievably ill-considered.....

1) Companies don't benefit directly from people buying their shares on the stockmarket, the money goes to the seller,

2) Many FTSE companies generate significant wealth abroad, a significant part of the wealth generated in the UK is by foreign registered companies. So it is a verry ineffective way of increasing UK investment.

3) The ideas appear to be solely related to direct buying of shares.  It is difficult to see how they would work with a global tracker.  For most people buying shares directly is completely nappropriate - they would be much better advised to use funds.

4) As a matter of public policy I think the £20K annual allowance is far too high - it makes S&S ISAs more of a generous tax avoidance option for the moderately wealthy than an encouragement for the average working person to invest more of their money.  Having extra allowance for buying "UK" company shares seems to be doing the wrong thing for the wrong reason.

In recent months the worry I've been reading and hearing about on places like Bloomberg and CNBC is that liquidity on the LSE is drying up so this might be an idea to try to address this. They also want to attract more IPOs and capital raises and a healthy secondary market usually aids this. 

'Individual companies listed on the LSE' would include investment trusts so using these there would be ways to invest globally. People are also worrying a great deal about the future of ITs so this might also be an idea to try to reinvigorate them.