In an effort to stimulate economic growth and support domestic firms, Chancellor Jeremy Hunt has announced a new tax initiative, the British ISA, allowing individuals to invest in UK companies tax-free.
Chancellor Jeremy Hunt announced plans for a new tax initiative, the British ISA, in the 2024 budget, aimed at bolstering investment in UK companies. The initiative is a response to concerns around the vitality of London’s stock market and the government’s ongoing efforts to promote consumer investment in the NatWest Group. The British ISA will permit individuals to invest up to £5,000 in UK businesses without incurring capital gains tax on any resulting profits.
This scheme is part of a wider government effort to support domestic firms and stimulate economic growth. Additionally, the government’s savings arm, NS&I, will introduce British Savings Bonds in April 2024. These bonds offer a fixed interest rate over three years, encouraging savings among UK residents. Nonetheless, there is apprehension that the British ISA might inadvertently channel funds away from UK companies towards tax-free investments in government bonds.
A consultation process regarding the structure and rollout of the British ISA is in progress and will conclude on June 6, 2024. This process delays the ISA’s introduction until after the consultation period. Chancellor Hunt has highlighted the dual benefits of the new ISA: enabling British savers to share in the success of UK businesses and providing these businesses with essential capital for growth. Further details on the implementation timeline of the British ISA will be shared following the consultation period.
