This government is taxing ISA’s

It's simple: don't hold cash in your stocks & shares ISA!

It's only on the cash portion.
The bit that sits there - before you click "buy"

Because investment platforms now pay decent interest rates on these uninvested balances the government is introducing that 22% tax rule to stop people using it as a tax-free savings account loophole.

I have just Googled and it’s explanation is not very clear.

It’s perfectly clear and easy to understand - it’s closing a loophole well after time. It’s still a good deal as it’s a flat rate 22%. Your title to the thread is wrong and potentially scaremongering. The government are NOT taxing ISAs - why not ask HQ for it to be changed to ‘Government to close unfair loophole with stocks and shares ISAs’ 😂😂

These new guidelines only apply to new contributions and transfers made from 6 April 2027 onwards; any funds already held in existing Cash ISAs remain tax-sheltered.

Starting 6 April 2027, the Cash ISA limit for savers aged 64 and under will drop to £12,000. While the overall annual ISA allowance remains at £20,000, any contributions above £12,000 must be directed into other ISA types, such as a Stocks & Shares ISA.

The new rules, confirmed by HM Revenue and Customs (HMRC), feature specific limits, exemptions, and anti-circumvention legislation:
Age Exemptions For savers aged 65 and over (and throughout the entire tax year in which you turn 65), the Cash ISA limit remains at £20,000.
Overall Allowance The total maximum amount you can contribute across all types of ISAs remains capped at £20,000 per year.
Transfer Bans To stop savers from getting around the new limit, individuals under 65 will be banned from transferring funds out of a Stocks & Shares or Innovative Finance ISA into a Cash ISA.
Stocks & Shares ISA Cash Limit To prevent people from stashing large amounts of cash in an investment ISA, HMRC will introduce a 22% tax charge on any interest paid on uninvested cash within a Stocks & Shares ISA.
Money Market Funds You will still be allowed to hold certain low-risk Money Market Funds in a Stocks & Shares ISA, but they will not be allowed to make up 100% of your portfolio.

This, which is what you stated, is correct:

There will be a 22% tax on non-cash ISA cash holdings. This will be on interest earned on cash held within Stocks and Shares and innovative Finance ISAs.

It's not on the ISA

Martin Lewis’s opinion

GrannyGravy13

Martin Lewis’s opinion

Which is exactly what those of us who understood the change said. Your title is still wrong btw.

Martin Lewis thinks the change is a good thing - has your understanding of the change become clearer since you originally posted GG13?

LemonJam

Martin Lewis thinks the change is a good thing - has your understanding of the change become clearer since you originally posted GG13?

I think it is possible to be caught when transferring between different stocks and shares ISA.

From what I understand it will no longer be possible to transfer from stocks and shares ISA’s to cash ISA’s

Need to have an in depth read when the GC go home.

If you have cash in a stocks and shares ISA you have a choice whether you receive interest or not. If you don't receive interest you pay no tax.
Personally I buy shares or withdraw any dividend cash I accrue in my ISA.
I think it is fair to close this loophole.

Oh what a different world we do inhabit.

For many in this country, ISAs are not high on their radar … paying the rent & utility bills are!

Just saying🤷‍♀️

The OP is inaccurate- you're right Lizziedrip the change is only relevant to those fortunate enough to be able to make ISA deposits in the £ numbers as stated above each year onwards. All previous savings are protected.

Such fortunate people will be able to quite easily come to terms with the change, which is minimal, closes a small loophole and even Martin Lewis thinks it's a good thing.

LemonJam

The OP is inaccurate- you're right Lizziedrip the change is only relevant to those fortunate enough to be able to make ISA deposits in the £ numbers as stated above each year onwards. All previous savings are protected.

Such fortunate people will be able to quite easily come to terms with the change, which is minimal, closes a small loophole and even Martin Lewis thinks it's a good thing.

But actually RR said when she announced the change months ago I think that is was about encouraging investment whilst the current rules were not doing - in fact as was explained earlier in the thread it was a perverse incentive to invest

How RR introduced it- I am not defending.....

Our S&S ISAs are managed for us - I expect the chap who does it is well aware.