The possible introduction of a British Isa has reared its head again, but some have branded the idea a “gimmick”.
If introduced, the British Isa would see an additional £5,000 tax-free allowance for UK-listed equities, on top of the current £20,000.
Treasury officials have continued to raise the idea with investment platforms, according to reports in FT Adviser's sister publication the Financial Times.
Rumoured plans for the introduction of the new Isa were absent from the chancellor’s Autumn Statement in November.
Tom Selby, director of public policy at AJ Bell, said restricting extra Isa allowance to UK investments would complicate things for investors.
He said: “This feels more like a gimmick than long-term policymaking in the interests of savers and investors.
“A much simpler solution would be to increase the overall Isa allowance and leave individuals with the freedom to invest in a way that suits their needs and appetite for risk.
“Many would naturally choose to invest in the UK of their own volition, meaning there would be a benefit to UK firms without the layering on of unnecessary complexity.”
In November, chancellor Jeremy Hunt announced changes which he said would simplify Isas.
This included savers being able to hold more than one of a particular type of Isa in a year.
Set to be introduced from April 2024 it is a change from current rules which dictate you can only pay into one type of Isa in a tax year.
Other changes included allowing partial transfers between providers, removing the requirement to reapply for an existing Isa annually and expanding the Innovative Finance Isa to include long-term asset funds.
But AJ Bell has called for long-term Isa simplification in the Spring Budget.
The firm wants to see an increase in the Isa allowance and any ideas of a Great British Isa scrapped.
The Treasury was contacted for comment.
tara.o'connor@ft.com
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