Guidance

Tax-free savings newsletter 23 — September 2026

Published 29 September 2026

Reform of Individual Savings Account (ISA) rules

Following the closure of the technical consultation, the government laid the Individual Savings Account (Amendment) (No. 2) Regulations 2026 before Parliament on 14 September 2026.

These regulations:

• implement the ISA reforms outlined in Tax-free savings newsletter 22 — June 2026
• will come into force on 6 April 2027

As previously announced, the overall annual ISA subscription limit will remain at £20,000. Investors aged under 65 can subscribe up to £12,000 of their annual ISA allowance to Cash ISAs.

The regulations also introduce rules meant to stop investors from avoiding the lower Cash ISA limit. These include:

• a flat-rate charge, set at the savings basic rate, on interest or alternative finance returns that providers pay on cash held in Stocks and Shares and Innovative Finance ISAs
• a restriction to stop investors aged under 65 from transferring funds from a Stocks and Shares or Innovative Finance ISA (non-Cash ISA) to a Cash ISA
• a rule to stop Stocks and Shares ISA investments from consisting entirely of money market funds

The government made a few changes following feedback from the technical consultation. These include:

• confirming that the restriction on investments consisting entirely of money market funds will not apply to Junior ISAs
• removing the purpose rules for cash held in non-Cash ISAs
• removing a proposal that the existing ISA manager must inform the receiving manager of any outstanding flat-rate charge when an ISA is transferred — the existing manager will be responsible for accounting for the charge up to the transfer date
• changing the description of the amount due on interest or alternative finance returns that providers pay on cash held in a non-cash ISA to read ‘flat-rate charge’

The government will continue to review the definition of ‘Money Market Funds’ as part of its:

• commitment to establish a new regulatory framework
• intention to extend the Temporary Marketing Permissions Regime

HMRC will continue to work with ISA managers and industry bodies to support these changes. We’ll publish updated ISA manager guidance before the changes take effect on 6 April 2027.

Lifetime ISA transfers

Some Lifetime ISA (LISA) managers have reported issues with transfer reporting through the application programming interface (API).

Managers must make sure they report transfers accurately. Inaccurate reporting may cause issues, including:

• an account becoming void on HMRC internal records
• delays when an investor uses their LISA to purchase a property

Digital ISA service — user research opportunities

We’re looking for ISA managers and third-party administrators who manage or support ISA processes to take part in user research sessions.

These 60-minute sessions will help us understand how you manage ISA-related information, submit returns and interact with HMRC’s services.

These sessions will be entirely confidential.

By taking part, you’ll be able to:

• share your experiences
• highlight any challenges
• help make sure the digital ISA service works well for organisations

We’d like to hear from a range of organisations, from small to large firms, so we can understand how different processes, systems and levels of support can affect user needs.

Research sessions will take place from October to December 2026. You’ll be able to take part either:

• remotely, using Microsoft Teams
• in person, at your place of work

If you want to take part or find out more, contact: holly.pringle@digital.hmrc.gov.uk.