ALLOW me to begin by providing you with a few of the key takeaways arising from the recent Autumn Statement.

These are all things that you need to be aware of when it comes to ISAs…

• Savers can open multiple ISAs in one tax year;
• Investments into the new semi-liquid fund structure will be available within the Innovative Finance ISA;
• The £20,000 limit on subscriptions to ISAs will be frozen;
• There was no mention of a hotly-tipped British ISA, or Brisa.

Within the Autumn Statement, the Chancellor of the Exchequer - Jeremy Hunt - announced an overhaul of ISA rules, making changes to both simplify them and provide more choice.

The idea is that it will be easier for people to choose the best ISA accounts for their needs and move money between them.

This starts with the government making changes that will allow multiple subscriptions to ISAs of the same type every year from April 2024.

Currently, savers can use only one ISA in each category within a tax year.

For example, investors cannot pay monies into two different stocks and shares ISAs providers, nor can they have two cash ISAs from separate banks.

Savers will also be able to make partial transfers of funds between providers from April.

Additional changes are also being made to make LTAFs (Long Term Asset Funds) available within the little-used Innovative Finance ISA from April 2024, along with expanding them to include open-ended property funds with extended notice periods.

LTAFs were not able to be held within an ISA because ISA assets need to have the ability to be sold within 30 days.

An Innovative Finance ISA is essentially a tax wrapper around one or more P2P (peer to peer) loans.

The ISA tax wrapper means that any growth on the investment is not subject to the taxes (eg. capital gains tax or income tax) that would normally be paid on the growth or interest.

This allows you potentially to make more money from investing in these assets than you otherwise would - everything else being equal.

The LTAF expansion aligns well with Hunt’s Mansion House reforms earlier in the year, which are intended to encourage greater investment into private markets and the expansion of LTAF rules comes after the Financial Conduct Authority (FCA) - following a request for industry feedback - confirmed this semi-liquid vehicle would qualify for Financial Services Compensation Scheme (FSCS) support.

Clarification over the FSCS position came after the regulator opened up LTAFs to retail investors in June.

However, no provider has yet launched a product focused on the retail market.

Finally, certain fractional shares contracts will also be permitted investments within stocks and shares ISAs.

‘The government intends to permit certain fractional shares contracts as eligible ISA investments and will engage with stakeholders on implementation,’ the government said.

Fractional shares are particularly popular with younger investors via trading apps as they enable investors to own a smaller chunk of expensive US stocks.

They are sold on certain trade platforms, but there had been confusion earlier in the year as to whether they would be permissible within stocks and shares ISAs.

The Autumn Statement has given the go ahead, and they can now form a part of savers’ £20,000 yearly ISA allowance.

HM Revenue and Customs had previously stood firm on its stance that fractional shares were not permissible within stocks and shares ISAs.

This prompted Hunt to change the rules in the Autumn Statement announcement as pressure had been levied by the platform providers.

As ever, the team at Future Life Wealth Management remains at your disposal if you ever require financial guidance about ISAs - or anything else.

Please don't hesitate to ring me - or another member of the team - on 01246 435996 or click HERE.