UK ISA tax rules to change in April 2027

New tax regulations for Stocks and Shares ISAs are set to take effect on April 6, 2027, following announcements from the Autumn Budget 2025. The changes introduce a 22% charge on cash interest earned within these accounts, specifically targeting money market funds (MMFs) classified as cash-like assets. Individual shares, investment trusts, ETFs, and bonds remain unaffected by this specific charge.

Additionally, the annual subscription limit for Cash ISAs will be reduced from £20,000 to £12,000 for savers under the age of 65. Individuals aged 65 and over will retain the full £20,000 limit. Under the new rules, savers under 65 will also be prohibited from transferring funds from a Stocks and Shares ISA or an Innovative Finance ISA into a Cash ISA.

ISA managers will be responsible for deducting the 22% charge and remitting it to HMRC on behalf of savers. Industry representatives, including PIMFA, have expressed skepticism regarding whether these changes will effectively influence consumer investment behavior.