New tax year, new ISA rules

April 2024 marks the beginning of a new tax year and the 25th anniversary of the launch of Cash ISAs in the UK. In the last 25 years, there have been several changes to rules surrounding ISAs, including the increase of the tax-free allowance to £20,000 per year and the launch of the Innovative Finance ISA - the type offered by Ethex

Following announcements in the Chancellor’s Spring Budget, there will be some further interesting changes to ISAs from 6th April 2024. Below, we summarise the relevant changes and what they mean to Ethex investors.

In the past, people aged 16 and over could invest in cash ISAs, but this will increase to 18 in the new tax year. People aged 16-17 will still be eligible to invest in a Junior Cash ISA, although the allowance is less than the adult version at £9,000 PA.

Previously, investors had to choose one ISA of any type (Cash, Stocks and Shares, Innovative Finance etc) each tax year, but the new rules will allow investors to diversify their ISA investments. So, for Ethex investors, this means that within the same year, you can invest in the Ethex IF ISA, even if you have already invested in another IF ISA from another provider (within your £20,000 limit). We welcome this change as it allows investors to diversify their IF ISA investments in any given tax year, including being able to support projects across both Ethex and our sister platform, Energise Africa, as well as other platforms in the impact investment space more generally.

In another welcome change that will provide more flexibility for investors, from 6th April, you can transfer some of your current year’s subscription between ISAs, you don’t have to move it all, as was the case before. For example, This might be useful if you subscribe your full £20,000 to a cash ISA at the start of a tax year but later decide you’d like to move part of this to an IF ISA provider to make an ethical investment.

Previously, investors and savers had to essentially reapply for ISAs they already held if the account had lain dormant for more than a single tax year. In April, we’ll see this rule scrapped, and the Isa will remain open, ready for investors to resume if and when they wish.

These new rules will mainly make it easier for people to invest in a wider range of ISAs and transfer their money in ways that suit them and we welcome these changes, with a wide range of IF ISA-eligible investment opportunities available on the Ethex platform as the new tax year begins, we hope investors will make use of their £20,000 24/25 tax-free allowance to support a range of impactful organisations and projects.  View our IF ISA offers here