New £12,000 limit on Cash ISA

masonic

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

Nothing will be decided until after the consultation. Since they say a "charge" rather than tax, then that leaves an option for a flat rate deduction at source. But on the MMF, based on what is written, that may have to be sold or removed from the ISA wrapper as things stand. QMMF can currently be held in a cash ISA. If you invest before April 2027, this will have no impact on you, but if not, there are currently providers offering both cash and S&S ISAs with instant transfer between them, which should be possible from cash to S&S even after April 2027.

Time2Go_25

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  
  
  
  

I would imagine the platform you are using would just report the interest you have earned to HMRC, in the same way banks and building societies do. 

Aretnap

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.
  

No more complex or disgusting than taxing interest within an ordinary savings account. You can still earn interest and nobody is calling you a tax dodger - you just don't get one of the many tax breaks that come with ISAs.

Though we'll see the detail - it might just take the form of a flat 20% charge on all interest paid on cash balances within a S&S shares ISA rather than treating it as taxable income, which I vaguely remember is how it might have worked until 2014. That would be even simpler (though it would rather favour higher rate taxpayers).

In any event these things were considered normal and uncontroversial until 2014. They may or may not be the best possible policy, but they're hardly disgusting or outrageous.

hallmark

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

If you invest before April 2027, this will have no impact on you

That's now how I'm interpreting it? It sounds like this rule will apply to all cash/MMFs in shares ISAs, not just to cash deposited after April 2027?

masonic

hallmark said:

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

If you invest before April 2027, this will have no impact on you

That's now how I'm interpreting it? It sounds like this rule will apply to all cash/MMFs in shares ISAs, not just to cash deposited after April 2027?

You said your funds were in a MMF waiting to be invested. If you invest them before April 2027 they will no longer be in a MMF.

hallmark

masonic said:

hallmark said:

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

If you invest before April 2027, this will have no impact on you

That's now how I'm interpreting it? It sounds like this rule will apply to all cash/MMFs in shares ISAs, not just to cash deposited after April 2027?

You said your funds were in a MMF waiting to be invested. If you invest them before April 2027 they will no longer be in a MMF.

The MMF part doesn't bother me so much, I would leave unused funds as cash if need be.

Having to keep records of, and be charged income tax on, cash temporarily held in a shares ISA, very much bothers me.  Especially as it's money I chose to move from a cash ISA in the first place.  

masonic

hallmark said:

masonic said:

hallmark said:

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

If you invest before April 2027, this will have no impact on you

That's now how I'm interpreting it? It sounds like this rule will apply to all cash/MMFs in shares ISAs, not just to cash deposited after April 2027?

You said your funds were in a MMF waiting to be invested. If you invest them before April 2027 they will no longer be in a MMF.

The MMF part doesn't bother me so much, I would leave unused funds as cash if need be.
Having to keep records of, and be charged income tax on, cash temporarily held in a shares ISA, very much bothers me.  Especially as it's money I chose to move from a cash ISA in the first place.  

Understood. Perhaps the FCA will reverse its campaign for platforms to pass on a share of interest and instead focus on keeping platform fees down, which would be more tax efficient. I would be comfortable with not receiving interest on cash held in a cheap platform.

phlebas192

hallmark said:

masonic said:

hallmark said:

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

If you invest before April 2027, this will have no impact on you

That's now how I'm interpreting it? It sounds like this rule will apply to all cash/MMFs in shares ISAs, not just to cash deposited after April 2027?

You said your funds were in a MMF waiting to be invested. If you invest them before April 2027 they will no longer be in a MMF.

The MMF part doesn't bother me so much, I would leave unused funds as cash if need be.

Having to keep records of, and be charged income tax on, cash temporarily held in a shares ISA, very much bothers me.  Especially as it's money I chose to move from a cash ISA in the first place.  

You've got 16 months to move it back to a cash ISA if it worries you that much. No point getting worked up before we even know the details.

hallmark

phlebas192 said:

hallmark said:

masonic said:

hallmark said:

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

If you invest before April 2027, this will have no impact on you

That's now how I'm interpreting it? It sounds like this rule will apply to all cash/MMFs in shares ISAs, not just to cash deposited after April 2027?

You said your funds were in a MMF waiting to be invested. If you invest them before April 2027 they will no longer be in a MMF.

The MMF part doesn't bother me so much, I would leave unused funds as cash if need be.

Having to keep records of, and be charged income tax on, cash temporarily held in a shares ISA, very much bothers me.  Especially as it's money I chose to move from a cash ISA in the first place.  

You've got 16 months to move it back to a cash ISA if it worries you that much. No point getting worked up before we even know the details.

That doesn't solve the problem, bit of a glib response.

I want the money in a shares ISA.  I don't want to have the hassle of keeping track of interest earnt, or have to sanity check every investment to see if it's "allowable".  I'm sure you understand the issue.

Section62

masonic said:

hallmark said:

• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA
  
  If confirmed that would be complex and absolutely disgusting.  Holding cash in a shares isa is entirely normal & reasonable, and in fact unavoidable for at least a certain amount of time (between depositing and buying, or between selling and buying).
  
  Are we now going to have to keep track of this & report it?  One of the attractions of ISAs is no tax stuff to worry about keeping track of.
  
  I recently transferred a fair chunk out of a cash ISA and into a shares ISA where it's currently in a MMF waiting to be invested.  So I'm now going to be penalised for that and treated like a tax-dodger? Despite having paid a shed-load of tax every year for over 40 years and adhered to every rule there is.

Nothing will be decided until after the consultation. Since they say a "charge" rather than tax, then that leaves an option for a flat rate deduction at source....

The question I'd have is whether that would apply to non-taxpayers, or how they would be exempted from the charge.

An R85 for S&S ISAs ?