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Post by gramsky on Sept 1, 2024 9:05:36 GMT
Rumours are that the total amount that can be held in ISAs could to be limited in the next budget in October to possibly £100k.
What are the chances and affects on P2P lending?
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Greenwood2
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Post by Greenwood2 on Sept 1, 2024 11:06:50 GMT
Rumours are that the total amount that can be held in ISAs is could to be limited in the next budget in October to possibly £100k. What are the chances and affects on P2P lending? ISAs do look vulnerable if Labour need to raise taxes and have ruled out a lot of the usual methods. I can imagine Labour phasing them out, reducing the maximum per year or making them tax free for a limited time period only. A sudden change in the amount you can hold might be difficult as many will be illiquid and it could have unexpected consequences if for instance people move cash out of S&S ISAs. A property tax seems to be another possibility.
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Post by bracknellboy on Sept 1, 2024 11:10:44 GMT
Rumours are that the total amount that can be held in ISAs is could to be limited in the next budget in October to possibly £100k. What are the chances and affects on P2P lending?I think P2P has bigger issues than impact of ISA changes. Just saying.
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Post by bracknellboy on Sept 1, 2024 11:14:52 GMT
Some limits changes on ISAs would seem a likely, and not entirely unreasonable target.
Lifetime limits though ? That would be horrible. You'd hope that the mess that LTAs on pensions created would be enough warning, even if simple logic of the issues that arise from lifetime limits wasn't sufficient.
I hope that if they do limit then it would be reduction in the annual allowance only. Policing - both personally and globally - lifetime limits would just be a mess with significant overheads.
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Greenwood2
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Post by Greenwood2 on Sept 1, 2024 11:20:20 GMT
Rumours are that the total amount that can be held in ISAs is could to be limited in the next budget in October to possibly £100k. What are the chances and affects on P2P lending?I think P2P has bigger issues than impact of ISA changes. Just saying. I have hesitated to remove some lower rate P2P that is in ISAs, I probably would if it was no longer tax free. Fairly happy with the P2P platforms I use currently (touch wood  ).
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Post by Ace on Sept 1, 2024 15:06:08 GMT
Rumours are that the total amount that can be held in ISAs could to be limited in the next budget in October to possibly £100k. What are the chances and affects on P2P lending? Is this a reference to the Resolution Foundation's report from Jan 2023 ( www.resolutionfoundation.org/publications/isa-isa-baby/), or something more recent? As others have said, limiting the total value would be a nightmare to police, particularly as S&S ISA values van vary wildly from day to day. A simpler system would be to limit the amount that one could contribute to ISAs over a lifetime, but allow the value to grow unconstrained. That would still leave a complicated issue of how to deal with those of us who already have total ISA savings above the limit. The simplest solution would be to lower the annual contribution limit going forward. I'd find lowering the annual contribution limit from £20k to £10k hard to argue against. As for what effect it might have on P2P, I can't see why it would have any effect since it would equally apply to S&S and P2P. Perhaps it would push more funds to other tax efficient investing, e.g. EIS/SEIS.
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firedog
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Post by firedog on Sept 1, 2024 15:25:57 GMT
Rumours are that the total amount that can be held in ISAs could to be limited in the next budget in October to possibly £100k. What are the chances and affects on P2P lending? Is this a reference to the Resolution Foundation's report from Jan 2023 ( www.resolutionfoundation.org/publications/isa-isa-baby/), or something more recent? It was mentioned on p53 of today's Sunday Express, so if that's the source of the 'rumours' I think we can sleep easily.
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keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Sept 2, 2024 13:16:56 GMT
Limiting the amount you can hold would be a pain
lets say the limit is set at £100,000
you have £95,000 in your account including £5,000 in golden water,
Golden water discovers a huge source of platinum in it's small silver mine in Australia overnight the value of Golden water quadruples, You now have £110,000 do you have to sell £10,000 worth or move it to a normal taxed account
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theta
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Post by theta on Sept 2, 2024 14:07:02 GMT
Limiting the amount you can hold would be a pain lets say the limit is set at £100,000 you have £95,000 in your account including £5,000 in golden water, Golden water discovers a huge source of platinum in it's small silver mine in Australia overnight the value of Golden water quadruples, You now have £110,000 do you have to sell £10,000 worth or move it to a normal taxed account And what happens if you don't sell? Do you pay tax on the income you receive for the portion of your ISA that is above £100k? Is that pro-rata? what if you don't receive any dividends/income and then the value goes down below £100k? Or what if you sell £10k? Do these £10k sales incur CGT? If so, what's the point of the ISA particularly given that a lot of people would have made >£100k of *contributions* in total? I find this speculation equally absurd with the one about unrealised capital gains taking place on the other side of the Atlantic. Perhaps it's a tactic, to circulate absurd rumours so that when they later make more reasonable actual proposals they will seem fair in comparison.
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firedog
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Post by firedog on Sept 2, 2024 14:18:01 GMT
I find this speculation equally absurd with the one about unrealised capital gains taking place on the other side of the Atlantic. Perhaps it's a tactic, to circulate absurd rumours so that when they later make more reasonable actual proposals they will seem fair in comparison. As I posted earlier; this speculation appears to be entirely down to the Daily Express, whose only tactic – as long as I've ever known it – is to inflame its febrile and suggestible readership.
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Post by bracknellboy on Sept 2, 2024 14:56:55 GMT
Rumours are that the total amount that can be held in ISAs could to be limited in the next budget in October to possibly £100k. What are the chances and affects on P2P lending? Or even £5k. Not that I'm advocating that, and at a personal level would not want it. But it is difficult to argue against it, frankly. Its an "middle/upper class" tax break and very difficult to make a cogent argument otherwise. As of January 2024, a survey from Finder has revealed that the average UK adult has £11,185 in savings. Despite this about 46% of people have £1000 or less in savings and 25% have £200 or less.So even £10k annual limit is considerably above what the majority of people are going to be able to benefit from. Of course, one can make an argument that NO savings income should be subject to tax. But once one accepts the principle (even if through necessity) of taxing savings then ISAs are clearly "just" a mechanism for the wealthier in society to reduce their tax bills.
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agent69
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Post by agent69 on Sept 2, 2024 15:26:18 GMT
Limiting the amount you can hold would be a pain lets say the limit is set at £100,000 you have £95,000 in your account including £5,000 in golden water, Golden water discovers a huge source of platinum in it's small silver mine in Australia overnight the value of Golden water quadruples, You now have £110,000 do you have to sell £10,000 worth or move it to a normal taxed account I guess the obvious thing would be to say if the balance is over £100k you can't pay any more in.
I thought the idea of an ISA was to encourage people to save (instead of squandering their hard earned dosh on exotic far eastern holidays). I accept that it's a bit acedemic for those who don't earn enough to save anything, but even if it only affects better off people I would have thought it was a good system. I would have thought that stopping salary sacrifice (which deprives the government of NI contributions) would be a more logical target.
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agent69
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Post by agent69 on Sept 2, 2024 15:35:21 GMT
As of January 2024, a survey from Finder has revealed that the average UK adult has £11,185 in savings. Despite this about 46% of people have £1000 or less in savings and 25% have £200 or less. I feel a discussion coming on regarding what sort of average we are referring to. I assume they mean the mean, which will be distorted by the very rich, and P2P investors.
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Post by bracknellboy on Sept 2, 2024 15:36:51 GMT
Limiting the amount you can hold would be a pain lets say the limit is set at £100,000 you have £95,000 in your account including £5,000 in golden water, Golden water discovers a huge source of platinum in it's small silver mine in Australia overnight the value of Golden water quadruples, You now have £110,000 do you have to sell £10,000 worth or move it to a normal taxed account I guess the obvious thing would be to say if the balance is over £100k you can't pay any more in.
I thought the idea of an ISA was to encourage people to save (instead of squandering their hard earned dosh on exotic far eastern holidays). I accept that it's a bit acedemic for those who don't earn enough to save anything, but even if it only affects better off people I would have thought it was a good system. I would have thought that stopping salary sacrifice (which deprives the government of NI contributions) would be a more logical target.
but that can fluctuate up and down from day to day. It doesn't solve the inherent issues with lifetime/max value limits. Policing it would be a nightmare. Currently I assume that ISA providers are required to report annually to HMRC on ISA contributions made by individuals. Nice and simple if you are policing an annual contribution limit. But total amount ? Which date is the reporting date? OR is it every day ? And values need to be aggregated across a number of ISA providers (OK, for annual limits the ability to contribute to several kicked in this year). My ISA value at some random date was below the limit, but is above it at start of year and end of year. Its must unnecessarily messy.
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Post by bracknellboy on Sept 2, 2024 15:39:29 GMT
As of January 2024, a survey from Finder has revealed that the average UK adult has £11,185 in savings. Despite this about 46% of people have £1000 or less in savings and 25% have £200 or less. I feel a discussion coming on regarding what sort of average we are referring to. I assume they mean the mean, which will be distorted by the very rich, and P2P investors. I was going to add that in my original post, but felt in the end it didn't add a lot so left it out. However, based on those numbers it seems likely to be a mean value, and when compared to the other numbers just emphasises the point about tax breaks for the wealthier.
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