Guidance

Tax-free savings newsletter 10 — November 2023

Published 27 November 2023

1. Autumn Statement 2023

This is a summary of all the announcements in the Autumn Statement on 22 November 2023 in relation to tax-free savings.

1.1 2024 to 2025 Individual Savings Account (ISA) limits

The government announced that for the tax year 2024 to 2025:

• The Junior ISA (JISA) and Child Trust Fund (CTF) limits will stay at £9,000
• The ISA limit will stay at £20,000.

1.2 Help to Save

A number of reforms are being proposed to improve the scheme after a consultation on the Help to Save scheme over summer 2023. The government will shortly publish a response to the design consultation announcing key changes to the scheme and publish a further consultation on the delivery of the revised scheme.

1.3 ISA reform

The government announced a package of ISA reforms and will make these changes to ISAs from 6 April 2024:

1. Increase the age for opening Cash ISAs from 16 to 18 and over. This is consistent with the age requirement already in place for opening Stocks and Shares, Innovative Finance and Lifetime ISAs.

2. Allow subscriptions to multiple ISAs of the same type, with the exception of Lifetime ISA, within the tax year, removing the limit on subscribing to one ISA of each type per year. All subscriptions must remain within the overall ISA limit of £20,000.

3. Remove the requirement for an investor to make a fresh ISA application where an existing ISA account has received no subscription in the previous tax year.

4. Allow Long-Term Asset Funds to be permitted investments in an Innovative Finance ISA, which does not require access to funds within 30 days.

5. Allow open-ended property funds with extended notice periods to be permitted investments in an Innovative Finance ISA.

6. Allow partial transfers of current year ISA subscriptions between ISA managers.

The government also plans to hold discussions with industry on allowing certain fractions of shares to become permitted ISA investments.

1.4 ISA Digitalisation

The government announced the digitalisation of ISA reporting. HMRC will work with ISA providers and relevant trade bodies on digitalising the ISA reporting system to ensure that HMRC provides a modern, digital service fit for the 21st century.

This means that in the future ISA managers will need to use a digital reporting system to send information about investors and subscriptions.

Over the next few months, HMRC will establish stakeholder forums and communication channels for ISA managers and relevant trade bodies to ensure the pace and sequencing of the move to a digital system reflects the needs of ISA providers and investors, as well as the requirement to upgrade HMRC’s own infrastructure.

2. Child Trust Funds (CTF)

We have updated the guidance on GOV.UK for Child Trust Funds. 

To improve the customer experience when someone is trying to find their CTF account we have introduced an interactive guidance tool for the ‘Find a Child Trust Fund’ service. This is to encourage individuals to submit their request to us online, which will result in a faster response. There is now also a print and post option to give individuals a set format to contact us. 

3. Lifetime ISA (LISA)

We would like to remind LISA managers that when you make an application to open a Lifetime ISA account, we carry out checks to ensure that the identity of the investor matches our current data records. If the information you provide does not match our systems, the opening of the account cannot progress.

The information we check is:

• first name
• surname
• date of birth
• National Insurance number

To prevent any potential errors occurring, you should make sure that, before making any subscriptions, investors have checked their details match those held by HMRC. They can do this by accessing their personal tax account or by downloading the HMRC app.