The British ISA

[Lootman]

UK market is international, so I've always dismissed the home bias argument, it just isn't.

The issue is not so much investment allocation but political risk - the risk that taxes or regulations might make domicile in the UK less attractive. And/or that foreign investors reduce exposure to the UK.

So ARM is a British company but decided to list in the US. Shell and Unilever are also listed in Holland. BHP dropped its British listing. Flutter has a dual listing. And so on.

I guess we will find out about this in a couple of days. If it happens I may do it but I would stick to UK companies that overwhelmingly earn overseas AND can list/emigrate overseas easily - example are Diageo and Rio Tinto.

[tjh290633]

Mention of Ireland got me thinking of one of my nitpicking little issues, because sometimes Northern Ireland (NI) is treated differently from the rest of the UK. Technically NI isn't part of Great Britain because it says on our passports "United Kingdom of Great Britain and Northern Ireland".

I'm not quite sure what the official definition of "Britain" is vis-a-vis "Great Britain" - looking up definitions on Wiktionary, the formal meanings of both excludes NI but the looser conversational definition includes it, equating it with the UK.

Great Britain is the name of the island which contains England, Wales and Scotland. It's as simple as that.

TJH

[swill453]

Mention of Ireland got me thinking of one of my nitpicking little issues, because sometimes Northern Ireland (NI) is treated differently from the rest of the UK. Technically NI isn't part of Great Britain because it says on our passports "United Kingdom of Great Britain and Northern Ireland".

I'm not quite sure what the official definition of "Britain" is vis-a-vis "Great Britain" - looking up definitions on Wiktionary, the formal meanings of both excludes NI but the looser conversational definition includes it, equating it with the UK.

Great Britain is the name of the island which contains England, Wales and Scotland. It's as simple as that.

And Team GB was the name of the, er, UK Olympics team. Simples, innit?

Scott.

[SalvorHardin]

The issue is not so much investment allocation but political risk - the risk that taxes or regulations might make domicile in the UK less attractive. And/or that foreign investors reduce exposure to the UK.

So ARM is a British company but decided to list in the US. Shell and Unilever are also listed in Holland. BHP dropped its British listing. Flutter has a dual listing. And so on.

I guess we will find out about this in a couple of days. If it happens I may do it but I would stick to UK companies that overwhelmingly earn overseas AND can list/emigrate overseas easily - example are Diageo and Rio Tinto.

Ocean Wilsons Holdings might qualify. A Bermudan investent company whose main asset is a majority stake in a Brazilian shipping and logistics company, with the rest being an international portfolio of various funds. Listed in London.

Some people might be put off by the political risk. I don't think Britain is that much worse than Brazil

[Lootman]

The issue is not so much investment allocation but political risk - the risk that taxes or regulations might make domicile in the UK less attractive. And/or that foreign investors reduce exposure to the UK.

So ARM is a British company but decided to list in the US. Shell and Unilever are also listed in Holland. BHP dropped its British listing. Flutter has a dual listing. And so on.

I guess we will find out about this in a couple of days. If it happens I may do it but I would stick to UK companies that overwhelmingly earn overseas AND can list/emigrate overseas easily - example are Diageo and Rio Tinto.

Ocean Wilsons Holdings might qualify. A Bermudan investment company whose main asset is a majority stake in a Brazilian shipping and logistics company, with the rest being an international portfolio of various funds. Listed in London.

Some people might be put off by the political risk. I don't think Britain is that much worse than Brazil

Yeah the core challenge for me would be to find companies like that which are technically British but that operate almost exclusively overseas, with just a notional "brass plate" in London.

Glencore might qualify as it is a Swiss-domiciled operation listed in London, but I have never really looked into it.

Of course if ITs are allowed then that is easy but my guess is that they would not be. And could it be like the IHT rules for AIM shares where a dual listing overseas disqualifies them?

[jaizan]

According to the Guardian, Hunt may introduce a "British ISA" at the next budget. This will incur no stamp duty for purchases of British shares.

Often, Stamp Duty is not the main cost. The bigger problem can be the bid-offer spread which amounts to several percent on some small caps.

What I would like to see is some form of economically priced direct market access, available to all investors.
Why not simply allow us to match orders and bypass the market makers ?

Some might argue that the market makers provide liquidity. I would argue that in the examples where you pay 5% to the market makers to buy a stock and then another 5% to sell it, they are actively deterring trading, so reducing liquidity.
The last study I saw on liquidity was partly sponsored by a market maker, so of course they didn't even consider their spread as a problem.

[GeoffF100]

What I would like to see is some form of economically priced direct market access, available to all investors.

I believe IBKR provides that. IDealing does too, but only if you are able to register as a professional investor.

[doug2500]

It's confirmed, sounds like an extra £5000

[GeoffF100]

"The consultation will launch today and will run until 6 June":

https://www.cityam.com/spring-budget-20 ... nvestment/

Its a piddling £5K. It will not happen until FY 2025-26, if it happens at all. Will I be able to sell £5K FTSE 100 tracker in my ISA and buy it back in my British ISA? Or will I have to invest penny parcels in rubbish? What will it cost?

[kempiejon]

The British ISA is not for me, nor a great many others I'd hazard but it might play well to a certain audience. Let's see if it even gets implemented though. There's been a fair bit of fiddling with ISAs. JISAs, LISAs and now what BISAs.
2% off NI is not for me but I guess it might benefit a wider audience.

[Adamski]

Hi Guys, please can someone clarify for me.

The UK ISA is £5,000
Will this be from 6th April 2024 or 2025?
Will we still need to pay stamp duty or not?
Will this include ITs like CTY?

Or do we need to wait. Thanks

[tjh290633]

You need to wait. They haven't yet worked out how it is going to work. Consultation until June, they say.

TJH

[JohnB]

It would be a very easy thing for Labour to cancel, especially as the consultation is likely to point out all the flaws others have raised here.

[swill453]

It would be a very easy thing for Labour to cancel, especially as the consultation is likely to point out all the flaws others have raised here.

Labour may do something positive, like saying it's too complicated/expensive as proposed so they'll just increase the allowance to £25k.

Scott.

[Lootman]

It would be a very easy thing for Labour to cancel, especially as the consultation is likely to point out all the flaws others have raised here.

Labour may do something positive, like saying it's too complicated/expensive as proposed so they'll just increase the allowance to £25k.

Sometimes it feels like every tax break has to have a catch. So a fiddly extra "British" ISA rather than just raise the general ISA subscription to £25,000.

Or increasing the IHT nil-rate band to a million but only for married couples with children who own their own home and leave to their kids.

And then people wonder why the tax code is so complicated.

[scrumpyjack]

It would be a very easy thing for Labour to cancel, especially as the consultation is likely to point out all the flaws others have raised here.

Labour may do something positive, like saying it's too complicated/expensive as proposed so they'll just increase the allowance to £25k.

Scott.

IMO they are more likely to cut it to £10k each on the basis that not many families can afford to put £40k each year into an ISA.

[Hallucigenia]

And Team GB was the name of the, er, UK Olympics team. Simples, innit?

Not quite true, not all UK Olympians compete for Team GB.

One of the ways in which the Good Friday Agreement made the Irish border more porous was that it allowed residents of Northern Ireland to have the choice of competing for Ireland or Team GB. In practice it's the Catholics who choose the former, who tend to be poorer and so tend to be in working-class sports like boxing.

Of course, the whole Northern Ireland thing is a complete mess - Olympic sports have the choice, in rugby union it's unified, in football it's a separate team, in other sports they play for the UK and so on.

But at least as important is the politics is the fact that the Olympics relies heavily on country abbreviations, and GBR works fairly universally where United Kingdom translates very differently and so there's no common abbreviation for it, aside from the potential confusion with Ukraine as well. So emphasising the GB bit just works from a practical point of view.

[GeoffF100]

Here is the consultation document:

https://assets.publishing.service.gov.u ... tation.pdf

It looks like it will be PEP Mark 2, unless Labour has other ideas. Completely silly flag waving, of course.

[JohnB]

The consultation approach is to include FTSE listed companies regardless of the source of their income, and collective investments based on them. So I'd be prepared to bung £5k into a FTSE 100 index tracker ETF. I still think if this requires legislation the clock will run out before the election.

[gryffron]

I still think if this requires legislation the clock will run out before the election.

As a general rule and with a few exceptions: All the financial changes in the budget get wrapped up in a single finance bill for each year. Historically rejecting this bill was a confidence matter, recent changes mean this is no longer so, but regardless the Tories easily have a big enough majority to pass it.
The Lords do not get a say on the finance bill. Taxation being the exclusive priveledge of the commons.

So they certainly could pass it before the election. But the other side could boot it just as fast.

Gryff