Cash ISAs capped at 12,000 (a year)

MeteredOut

Vitor said:

SO what do you do when you expect a market correction and want to sell and hold cash? Are we expected to remain invested and lose money due to HMRC rules?

What has been suggested is that any interest earned on cash-like assets in a S&S ISA (or the S&S portion of an ISA) is always taxable and reported to HMRC on an annual basis, so its up to each person to decide what they want to do.

An alternative would be guidance provided by HMRC and enforced by the providers. eg, you can't keep x% of your total investment in cash-like assets for more than 30 days.

Vitor

More complexity, more rules, more opportunities for HMRC to mess-up on what used to be simple and straightforward savings products

intalex

Hope this pushes brokers into automatic instant gilt coupon reinvestment options to avoid any "interim" cash balances

Aretnap

Vitor said:

SO what do you do when you expect a market correction and want to sell and hold cash? Are we expected to remain invested and lose money due to HMRC rules?

Up to you, but you have a number of choices:

(1) Behave like a sensible investor, accept that you can't time the markets and stick to making sure that your investments match your overall risk appetite
(2) Move to bonds (just not very short-dated gilts, which will be considered cash-like)
(3) Move to cash, and accept that getting slightly less interest after tax than you might otherwise have got is a lot better than losing lots of money in the crash that you can apparently see coming

And that's before we get to gold ETFs, consumer defensive shares or whatever your preferred flavour of safe haven asset is (if you're able to predict stock market moves you'll surely know of plenty).

ColdIron

Presumably any interest earned would contribute to your adjusted net income (and might need to be declared on your self assessment) thus pushing some into a higher tax band (even the 65 and overs)? From ISA earnings!

Aretnap

ColdIron said:

Presumably any interest earned would contribute to your adjusted net income (and might need to be declared on your self assessment) thus pushing some into a higher tax band (even the 65 and overs)? From ISA earnings!

Possibly, though the government announcement talks of a "charge" rather than a tax so it might take the form of (say) a blanket 20% levy on interest within a S&S ISA regardless of your tax band. We shall see how the consultation works out. If you want to hold cash for long periods you'll have 18 months to transfer it to a Cash ISA (or the rest of your life if you're over 65).

Albermarle

Tommaso46 said:

from the terminology being used by a few of the previous posters it's clear that a lot of knowledge and expertise is required to "play the market". The Chancellors idea that she is going to attract thousands of newbies by persuading them to join in is surely naive, or cynical. I see a lot of people going into a world of risk, advised by questionable "experts", and not making much money at all (which presumably would be taxed, despite the fact that it's an ISA)

Investment growth and dividends arising from investments in an ISA are not taxed.

Very few people 'play the market' Most just buy a multi asset fund or a global tracker and just leave it there long term.
Apart from the tax raising aspect , the Chancellor ( and others ), have many times raised concerns about the relatively low level of investing/risk aversion by the UK public.
I guess she has been reading stuff from the US about 'the Mom and Pop Millionaires' . Ordinary folk who regularly put what they could afford into simple US index funds, and 30 years later they are rich. 

Vitor

Think I'll take some bad advice, a few years later there's always big compo for 'misselling' 

Swipe

I hope Vanguard goes back to taking their fees solely from my GIA again like it used to before they changed it to be spread across my GIA, ISA and SIPP.

Alexland

soulsaver said:

HL comment
"These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) - UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform - both direct equities and manufactured and third-party funds and investment trusts.

HL are such grovelling sycophants to the treasury supporting any dumb idea - it was the same with LTAFs.

They should have stood up to the government and told them that people don't want these ISA reforms, the increase in UK investing will be immaterial, they serve no useful purpose and Investment Trusts are already far superior to LTAFs and government need to scrap stamp duty on IT purchases.

But no, HL decided to be bootlicking toadies.

If I was still an HL customer then I'd consider leaving.

The government should focus their efforts on supporting UK companies so people want to invest in them.