A top pensions industry figure has recommended that the UK government restrict the tax-free Isa wrapper exclusively to domestic assets, arguing that foreign equities should be excluded from the benefit.
The proposal marks a significant escalation in the ongoing dispute over the structure of Individual Savings Accounts, coming as the Treasury faces mounting pressure to reform the regime.
Wealth managers and consumer advocates have already voiced sharp criticism of the government’s separate proposal to impose a 22% tax charge on cash interest held within stocks and shares Isas.
The call for a domestic-only Isa aligns with broader industry concerns regarding the fairness and fiscal sustainability of the current tax wrapper.
Wealth managers and consumer advocates have already voiced sharp criticism of the government’s separate proposal to impose a 22% tax charge on cash interest held within stocks and shares Isas.
The new suggestion to limit equity eligibility to UK-listed companies adds another layer of complexity to the debate, potentially reshaping how retail investors allocate capital within tax-advantaged accounts.
If implemented, such a restriction could force a significant rebalancing of Isa portfolios, driving demand toward UK equities while reducing exposure to international markets.