Government announced British ISA

Will T212 be on board with this?
Will most just go for a FTSE 100 etf, or do you have a favourite British stock?

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Will this be an extra £5000 on the allowance?

Or will we have to use it within the £20,000?

It’s an extra £5000.

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So to clarify, will the ISA allocation on 212 now say £25,000?

Read the news, details are clearly still TBC how it will work. This is a new additional £5k that can be allocated to what they eventually confirm can be held in a BISA.

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Hey, everyone :wave:

We’ll look into this further and let you know right away once we have news on the topic.

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The UK ISA will support savers and open up UK retail investment opportunities for individuals. The UK ISA will be a £5,000 allowance in addition to the existing ISA allowance and will be a new tax-free product for people to invest in UK-focused assets.

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In light of this, does HMRC already decided about their fractional shares opinion?

Fractional Shares - weren’t announced in the budget verbal statement. But the full budget report included the following:

“4.33 The government is committed to ensuring
people have the opportunity to invest in a diverse
range of investment types through their ISAs. As
previously announced at Autumn Statement 2023
this includes certain fractional share contracts,
and the government is working as quickly as
possible to bring forward legislation by the end of
the summer following detailed engagement with
industry and the FCA.”

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If it’s an additional £5k added onto the limit then I don’t mind this since I already own a few individual UK stocks but I would hate for it to be a separate ISA.

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I again have not commented out on stuff for a while, but am here to say: Wow… that FT article is one of the worst articles I’ve read in a while.

(Like many others pointed out) FT trying to brush away the numbers in absolute graphs as “arse covering graphs” while making (what looks like to me as intentional) mis-judgements on percentage graphs was so cringe worthy…

Yes it’s obvious, “percentage-wise” more people earning over 100K maxes out ISA limits, but if you look at the total numbers, the number of these people almost is a rounding error compared people earn between 30-100k and max out their ISAs.

on the other hand something else they point out to is true and crucial, before this is actually legislated, we won’t know much about what goes in there. If there is an ETF domiciled in UK but tracking S&P500 count as UK investment? :slight_smile:

I’d rather burn money instead of buying FTSE100. It’s full of “dying or will be dying in 10 years” kind of companies. Dare I say even FTSE250 would be a better choice.

But there are several “unexciting but solid” companies you can pick from like DGE, ULVR, AZN, BNZL there is also somewhat interesting RELX and thanks to Russia depleting EU armouries, and most NATO governments cranking up defense budgets BAE.

I personally hold significant amount of DGE and some BNZL/RELX/BAE

It will 100% be a separate ISA with 5K allowance(BISA?!?), there is no other way to enforce investment restrictions. “the limit” on any type of ISA is at the time of deposit. You cannot deposit an additional 5K with the promise that you’ll buy a UK stock. or even if that is contracted on deposit with some weird mechanisms, stock prices raise and fall, you buy and sell other stuff inside the ISA wrapper.

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Is this valide for UK residents only?

Correct. ISAs are a tax efficient vehicle for UK citizens to invest.

It is interesting the negative discussion I have seen on place like twitter and in the media to this BISA news.

To that I simply say, dont use it then!

If i was able to fill up my normal ISA I would definitely use the BISA, I already own UK stocks and on that extra £5,000, a taxable US or other stock would need to ouperform by about a whole % point on some back of the napkin 6-7% returns, so a 6% return on BISA is about a 7% taxable based on some tax thresholds etc assumptions. So yes US stocks have outperformed, but if you are a stock picker and say you want to own some solid dividend payers like Unilever (which I own) then a US counterpart would have to earn say 7% for Unilevers 6%, not to mention the dividend tax/witholding taxes as many stocks like that their return is in large part dividend based.

It wont be for everyone, and many of us might not be able to fill our ISAs, but if one year I could, I would enjoy this extra and grab it with both hands.

And yes…I am aware if you invested in NVIDIA or TESLA 10 years ago who cares about a 1% benefit per year, but no tax changes would negate extreme outperformance of tech stocks in recent years.

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I think this is tinkering at the edges of the City’s problems but, like you, I’ll take advantage if I can – likely to load up on non-UK stocks via trusts if allowed.

For me, it would have been so much better to cut or abolish stamp duty. That 0.5% on the way in is painful and seems like a tax on growth.

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Isn’t BISA trying to milk more taxes via stamp duty? :thinking:
They will offer some tax relief in one hand but taking more more taxes in the other.

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It is a tax wrapper, so yes.

As I understand it, the stated aim is to increase investment in UK firms.

I doubt it will have that much impact in terms of the tax take because not that many people will be able to take advantage.

Stamp duty doesn’t raise that much in the grand scheme of things, I think it’s roughly £4bn a year against total revenue of about £1tn.

When you factor in the wider economic benefits of scrapping it, it hardly seems worth it.

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What they are doing is understandable; however, unless the UK economy wakes up, it would not make great sense to me. With that said, I believe there will be a trove of investment managers who would push for it because it would go hand-in-hand with the other products they are offering.
I might use it if investing in local businesses; however, as of now I am pretty disappointed with the British economy. Hopefully, things will get better and the BISA will be a success!

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