LTAFs become eligible for stocks and shares ISAs and Junior ISAs and lose IFISA eligibility

Long Term Asset Funds (LTAFs) became qualifying investments for stocks and shares ISAs and Junior ISAs on 6 April 2026, and lost their eligibility for the Innovative Finance ISA (IFISA), under the Individual Savings Account (Amendment) Regulation 2026 published by HM Revenue & Customs on 9 March 2026¹. The same regulation restricts cryptoasset exchange traded notes (cETNs) to the IFISA, removing them from stocks and shares ISAs and Junior ISAs¹.

The change was first signalled at Mansion House 2025, where the government announced that from 6 April 2026 LTAFs would be qualifying investments for stocks and shares ISAs¹. A separate announcement on 8 October 2025 said cETNs would be restricted to IFISAs with effect from the same date¹.

Holdings already in place are protected. LTAFs held within an IFISA before 6 April 2026 are treated as qualifying investments for a stocks and shares ISA, and cETNs held in a stocks and shares ISA or Junior ISA before that date can remain within the account¹. HMRC said this means it "will therefore not be necessary to liquidate such investments and reinvest the released monies"¹.

ISA managers must now report LTAFs and cETNs separately under the amended regulations¹. Managers who do not already have HMRC approval to offer a stocks and shares ISA or an IFISA will need to seek it¹. HMRC expects the measure to have a negligible impact on the Exchequer and negligible additional implementation costs for itself¹.

Why it matters for households

The rules change which wrapper an investment can sit in, not the investments themselves. Anyone holding an LTAF in an Innovative Finance ISA before 6 April 2026 keeps it on a qualifying basis inside a stocks and shares ISA, and anyone holding a cETN in a stocks and shares ISA or a Junior ISA before that date can leave it where it is¹. No forced sale is required by the regulation.

For new money, the position from 6 April 2026 is that LTAFs sit within the list of investments a stocks and shares ISA can hold, including for children's accounts, while cETNs sit only within an IFISA. HMRC's stated aim is that investors at all income levels can "save and invest in ways which best meet their needs", and that Junior ISA qualifying investments remain appropriate for the account¹. The separate reporting duty means ISA managers will identify these holdings distinctly on their returns¹.

HMRC said it does not hold data on the protected characteristics of those affected and so cannot determine conclusively whether there are equality impacts¹. It also said the measure is not expected to have significant macroeconomic effects¹.

What happens next

The measure took effect on 6 April 2026¹. HMRC said it will consider monitoring through information collected from ISA manager returns, kept under review through communication with affected taxpayers and the financial services industry¹. ISA managers without the relevant HMRC approval for a stocks and shares ISA or IFISA must seek it¹.