Overview
- The Treasury has paused finalising the detailed ISA rules after May 28 reports revealed a potential '1p' token-equity loophole that could let investors escape a new charge.
- The government still intends to cut the annual cash ISA allowance for under-65s to £12,000 and to tax interest on cash held inside Stocks & Shares ISAs at 22% from April 2027.
- Coverage says the charge may apply only when an account holds 100% 'cash-like' assets, which would let a tiny equity holding exempt the rest kept in money-market funds or overnight-rate ETFs.
- Industry bodies, investment platforms and opposition MPs have warned the proposals would be hard to administer, risk confusing savers who keep cash for liquidity and rebalancing, and could weaken confidence in ISAs.
- The Treasury says it will work with industry to define 'cash-like' assets and the operational rules and will update on next steps, leaving platforms and savers facing uncertainty ahead of the April 2027 changes.