The British ISA
Discussion
About half way down here there's a letter from a whole bunch of UK fund management house CEOs asking the Chancellor to create a "British ISA".
https://www.thetimes.co.uk/article/times-letters-m...
No issue with that until this little gem.
"Individuals could still invest in international equities, just not within the ISA wrapper."
That's very kind of them.
Who the f
k do these self-serving fund managers think they are 
https://www.thetimes.co.uk/article/times-letters-m...
No issue with that until this little gem.
"Individuals could still invest in international equities, just not within the ISA wrapper."
That's very kind of them.
Who the f
k do these self-serving fund managers think they are bhstewie said:
hstewie said: About half way down here there's a letter from a whole bunch of UK fund management house CEOs asking the Chancellor to create a "British ISA".
https://www.thetimes.co.uk/article/times-letters-m...
No issue with that until this little gem.
"Individuals could still invest in international equities, just not within the ISA wrapper."
That's very kind of them.
Who the fk do these self-serving fund managers think they are
I'd be interested to know what is considered 'British' too....I'm like most on here I guess, not so keen on this idea.https://www.thetimes.co.uk/article/times-letters-m...
No issue with that until this little gem.
"Individuals could still invest in international equities, just not within the ISA wrapper."
That's very kind of them.
Who the f
k do these self-serving fund managers think they are A British ISA does sound a good idea. The Personal Equity Plan which preceded the ISA was limited to qualifying investments. Qualifying investments had at least half of their assets invested in the UK. This was later extended to the European Union. The qualification rule for existing PEPs was removed in 2001.
An easy way for the Chancellor to introduce the British ISA would be to do it as an extra, i.e. an investor could £20K per annum in a traditional ISA, then, say, another £20K in a British companies-only ISA.
Alternatively, the investor could opt for a 'British shares only ISA' instead of the traditional ISA, but with added benefits/sweeteners. For example, investments in the British ISA would not be subject to inheritance tax on the death of the investor. Currently this only happens if invested in high risk AIM investments, and even then not all companies qualify.
If the Great British ISA is to encourage investment in smaller start-ups, then some sort of protection is needed, as all too often when one invests in a new business, the share price plummets with the sale of more shares to fund the infrastructure and research required, then just as some returns are coming into view on the horizon, the whole thing gets bought out by private equity for pence in the pound on one's original investment. Sirius Minerals anyone?
An easy way for the Chancellor to introduce the British ISA would be to do it as an extra, i.e. an investor could £20K per annum in a traditional ISA, then, say, another £20K in a British companies-only ISA.
Alternatively, the investor could opt for a 'British shares only ISA' instead of the traditional ISA, but with added benefits/sweeteners. For example, investments in the British ISA would not be subject to inheritance tax on the death of the investor. Currently this only happens if invested in high risk AIM investments, and even then not all companies qualify.
If the Great British ISA is to encourage investment in smaller start-ups, then some sort of protection is needed, as all too often when one invests in a new business, the share price plummets with the sale of more shares to fund the infrastructure and research required, then just as some returns are coming into view on the horizon, the whole thing gets bought out by private equity for pence in the pound on one's original investment. Sirius Minerals anyone?
Edited by GliderRider on Monday 4th March 08:38
If it replaces the traditional ISA, then it's tantamount to abolishing it. I am not too interested in investing in UK-listed companies just because Baroness Altman thinks it a good idea, representing as they do a small proportion of global equities, and not a very diverse one either. Most British investors are already too UK-heavy anyway, which is bad for diversification since we depend on the state of the UK economy in other ways.
I'm mostly in global funds rather than UK, and over the last few years thank god for that.
I'm mostly in global funds rather than UK, and over the last few years thank god for that.
Defining a UK company is pretty tough and, I’d argue, pointless.
If you look at the FTSE 100, about 75% of their earnings are from overseas. So are they British because they choose to list here? Maybe, but is there any reason to encourage investment in them?
I think it would make more sense to encourage investment in UK start-ups which are more obviously British (I.e. they don’t yet have the scale to be multinational). Problem there is that they are high risk and only really suitable for wealthier, more sophisticated investors - already tax efficient via EIS.
If you look at the FTSE 100, about 75% of their earnings are from overseas. So are they British because they choose to list here? Maybe, but is there any reason to encourage investment in them?
I think it would make more sense to encourage investment in UK start-ups which are more obviously British (I.e. they don’t yet have the scale to be multinational). Problem there is that they are high risk and only really suitable for wealthier, more sophisticated investors - already tax efficient via EIS.
As mentioned above, I can see it making sense as an addition to the standard ISA. But not instead of. Defining eligible companies may or may not be a ball ache, but moreover - it's hardly in the government's interests for the eligible to concentrate holdings to a single market rather than diversify.
Announced in the budget as a £5k "UK ISA" allowance in addition to the regular £20k.
https://www.gov.uk/government/consultations/uk-isa...
Government consulting on the details (inc. what constitutes "British") between now and 6th June 2024.
https://www.gov.uk/government/consultations/uk-isa...
Government consulting on the details (inc. what constitutes "British") between now and 6th June 2024.
Phooey said:
Could it have a positive effect on investors holding the UK FTSE indices like 100/250/All-Share I wonder?
To be honest, at these amounts and given the relatively tiny proportion of people that max out the regular £20k anyway, it won't make much difference to anything. If it even happens, which I think is doubtful as the specifics and the way they've announced the "consultation" smacks of trying to reap the optical benefit while kicking the actual implementation into the long grass.It is all rather curious. Not least because investing in the FTSE 100 isn't really investing in the UK. Most of those companies have big, international businesses.
Ah yes, but the Br-ISA rules could require companies to have at least 50% of their business in UK,
Sounds to me like jingoist tosh but if Br-ISA ever arrives I'll be happy to help myself to an additional slice of ISA pie.
Ah yes, but the Br-ISA rules could require companies to have at least 50% of their business in UK,
- Production facilities?
- Employees?
- Turnover?
- Profit?
Sounds to me like jingoist tosh but if Br-ISA ever arrives I'll be happy to help myself to an additional slice of ISA pie.
NowWatchThisDrive said:
Government consulting on the details (inc. what constitutes "British") between now and 6th June 2024.
It'll be interesting to see whether quoted investment trusts like Scottish Mortgage with lots of overseas holdings will count towards it? Likewise mostly/wholly foreign companies that have chosen to list in the UK.Yeah, I guess it is just a pre-election stunt, "we're backing Great British businesses!" It doesn't amount to a hill of beans and I wouldn't blame a future chancellor for quietly putting the plans in the bottom drawer. Of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard."
I don't really get this.
In terms of tax-advantaged savings, with the existing ISA allowance (£20k) staying and the pensions Annual Allowance is at £60k and both allow you the flexibility to invest where you want, including the UK, then surely a £5k incremental British ISA is very much an edge case and really unlikely to achieve much in the context of the wider market.
Even if there's lots of take-up, doesn't it just (slightly) bid up existing asset prices? It's unlikely to be providing fresh capital anywhere.
In terms of tax-advantaged savings, with the existing ISA allowance (£20k) staying and the pensions Annual Allowance is at £60k and both allow you the flexibility to invest where you want, including the UK, then surely a £5k incremental British ISA is very much an edge case and really unlikely to achieve much in the context of the wider market.
Even if there's lots of take-up, doesn't it just (slightly) bid up existing asset prices? It's unlikely to be providing fresh capital anywhere.
I guess if I planned to put £20k into Vanguard LifeStrategy 100 (which is about 25% invested in UK), I would instead invest in Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP.
I would then invest additional £5k in FTSE 100.
Effectively get the same result in portfolio but now can have £25k ISA instead of £20k.
I would then invest additional £5k in FTSE 100.
Effectively get the same result in portfolio but now can have £25k ISA instead of £20k.
I’m happy with it. I’ll sell down £5k of my investment in Greggs bakery (a great investment during a cost of living crisis, people still want a sausage roll as a pick me up) and put that in the British ISA.
Freeing me up to buy a further 5k of a global all cap index fund.
Happy days.
Freeing me up to buy a further 5k of a global all cap index fund.
Happy days.
thinkofaname said:
Yeah, I guess it is just a pre-election stunt, "we're backing Great British businesses!" It doesn't amount to a hill of beans and I wouldn't blame a future chancellor for quietly putting the plans in the bottom drawer. Of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard."
Deserves recognition for the reference, 
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