What is the new British ISA?
Announced in the 2024 Spring Budget, the British ISA is set to increase the overall ISA allowance to boost the UK economy.
Important information - investment value can go up or down and you could get back less than you invest. If you're in any doubt about the suitability of a Stocks & Shares ISA, you should seek independent financial advice. The tax treatment of this product depends on your individual circumstances and may change in future. If you are uncertain about the tax treatment of the product you should contact HMRC or seek independent tax advice.
In the 2024 Spring Budget, Jeremy Hunt announced plans for a new type of ISA. The first new type since the Lifetime and Innovative ISAs launched in 2016.
It’s not available yet and we don’t know when it will be, but we do know it will affect your annual allowance.
What is the new British ISA?
The British ISA is a new account being added to the ISA family. It joins existing types of ISA, such as the Stocks and Shares ISA, Junior ISA and Lifetime ISA.
It gives investors an extra £5,000 ISA allowance – on top of their existing £20,000 – to invest into UK shares. It’s hoped this will boost the UK stock market by encouraging UK retail investors to put capital into UK based investments instead of international ones.
You can only use the extra allowance for UK investments, so there’s likely going to be some extra rules around transferring to or from a British ISA. But we don’t know for certain until the consultation period is over.
When will the British ISA be available?
The British ISA has only just been announced so we don’t know yet when it’ll be available for UK investors.
There’s a lot for HMRC, who sets the ISA rules, to sort out with ISA providers during a consultation period. Things like how it’ll work, what are the limitations and the rules. If that goes well, it’s likely we’ll start seeing the British ISA introduced for the next tax year, April 2025.
Which UK assets are included in the British ISA?
There isn’t much known about exactly what investments will be included in the British ISA. We know eligible investments will be domestically focused. But we don’t know if this means only investments listed on a UK exchange, and that could cause issues for businesses based in the UK but operate globally or abroad. This is something that still needs to be decided during the consultation.
You don’t need to wait for the British ISA to invest, you can invest in the London Stock Exchange now in our Stocks and Shares ISA, SIPP (Self Invested Personal Pension) or Trading Account. Any why not take a look at the top performing UK shares for inspiration.
Who will benefit from a British ISA?
If you’re an investor who uses your full £20,000 ISA allowance, but still want to contribute more cash to your ISA investments, then a British ISA could be for you.
You’ll just need to bear in mind that the extra £5,000 allowance is only for British investments. You can’t use it for international ones.
You can still purchase UK investments in a normal Stocks and Shares ISA. So, if you don’t plan on using your full £20,000 ISA allowance, you won’t see the benefit of the British ISA.
How can I open a British ISA?
You can’t open a British ISA yet. But once the consultation is over, providers will start launching them on their platforms. You’ll then be able to find the one that suits you.
If you’re wanting to invest sooner, you can open ii Stocks and Shares ISA today and get trading on the UK exchange – or in any of the 17 international global exchanges we support.
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