The Economic Secretary to the Treasury, Sajid Javid, today published a consultation setting out the Government’s proposal for changing the Individual Savings Account (ISA) rules to expand the range of shares that are eligible to be held in a stocks and shares ISA.
As outlined at Autumn Statement 2012, the Government would like to allow company shares traded on a wider range of equity markets to be eligible for a stocks and shares ISA, including markets with a component of smaller company shares. This policy could lead to an important capital injection for small to medium-sized enterprise (SME) equity markets and encourage more investment in growing businesses.
Economic Secretary to the Treasury, Sajid Javid, said:
Access to finance for smaller growing companies is key to promoting private investment and delivering a sustainable economic recovery. The Government wants to ensure that businesses, particularly small businesses, are able to access finance and support, and this change has the potential to help provide that access while offering consumers greater choice in what they can hold in their ISA.
Notes for Editors
The consultation has been published.
The consultation will run from 13 March 2013 to 8 May 2013.
An ISA is a savings account within which all interest, dividends and capital gains that arise are tax-advantaged. There are two types of ISA: a cash ISA and a stocks and shares ISA.
There are limits on how much investors can subscribe to an ISA in each tax year. ISA limits for 2012-13 allow individuals to save up to £11,280 in an ISA, up to £5,640 of which can be saved in a cash ISA. These limits will rise with Consumer Price Index (CPI) inflation in 2013-14 to £11,520 and £5,760 respectively.
Not all types of asset can be held in a stocks and shares ISA. The assets that can be held in a stocks and shares ISA are specified in the Individual Savings Accounts Regulations 1998 (ISA Regulations). At present, this excludes many smaller company shares. The Government intends to expand the range of ISA qualifying investments to address this.