Consultation on ISA Amendment Regulations 2026 closes

The technical consultation on the Individual Savings Account (Amendment) Regulations 2026 closed at 11:59pm on 2 August 2026, HM Revenue & Customs has said. The consultation opened at 9:30am on 25 June 2026 and was published on 16 July 2026¹. HMRC states on the consultation page: "We are analysing your feedback"¹.

The draft regulations would set the annual Cash ISA subscription limit for investors below the age of 65 at £12,000 from 6 April 2027. For investors aged 65 or over the annual Cash ISA limit will remain at £20,000¹. The overall ISA allowance remains unchanged at £20,000, so under-65s could subscribe up to £12,000 to a Cash ISA and use the remaining £8,000 in a stocks and shares ISA or another non-cash ISA type in the same tax year². The £20,000 Cash ISA limit applies to those aged 65 and over from the start of the tax year in which they turn 65².

The draft regulations also contain measures intended to stop the lower Cash ISA limit being circumvented. They provide that transfers from a stocks and shares (S&S) ISA or innovative finance ISA (IF ISA) to a Cash ISA are prohibited where the account holder is below the age of 65; define investments deemed to be "cash like" and restrict their holding; and introduce a charge on any interest paid on cash held in S&S ISAs and IF ISAs¹. Transact reports that a flat-rate 22% charge will apply to interest, or the Sharia-compliant equivalent, earned on cash held within a stocks and shares ISA, collected by the ISA manager and remitted to HMRC, and that the charge applies irrespective of age². It does not apply to returns generated by qualifying investments such as shares, bonds, funds, ETFs or money market funds². Under the current draft regulations, money market funds are the only investments treated as "cash-like" assets; if 100% of the non-cash element is invested in a money market fund, the fund becomes non-qualifying and the ISA manager will need to contact the investor to rectify the position².

Transfers from a Cash ISA into a stocks and shares ISA will continue to be permitted without restriction, and ISA transfers do not count against the annual subscription limit². Individuals aged 65 and over are exempt from the transfer restriction from the start of the tax year in which they turn 65².

Source: Transact²

Why it matters for households

The changes, if made, take effect from 6 April 2027 and affect how much can be paid into a Cash ISA in a tax year. Savers under 65 would be able to subscribe up to £12,000 to a Cash ISA rather than £20,000, with the rest of the £20,000 overall allowance usable in other ISA types¹. Those aged 65 or over keep the £20,000 Cash ISA limit, applied from the start of the tax year in which they turn 65¹.

The anti-circumvention measures change what happens to cash held inside a stocks and shares ISA. Interest on that cash would attract a 22% charge regardless of the holder's age, while returns from qualifying investments such as shares, bonds, funds, ETFs and money market funds would not². Under-65s would also lose the ability to move money from a stocks and shares ISA or innovative finance ISA into a Cash ISA, while transfers in the other direction remain permitted¹. Money market funds held as the entire non-cash element of a stocks and shares ISA would become non-qualifying, with the ISA manager contacting the investor to correct the position².

The government's ISA reform programme was announced in the Autumn Budget 2025 and set out in HMRC publications of 23 and 24 June 2026². A separate change, the replacement of the Lifetime ISA with a new First Time Buyer ISA, is at consultation stage and there is no clear date for implementation². The consultation page lists draft legislation of 287 KB and six pages, plus an accessible HTML version¹.

What happens next

HMRC says it is analysing feedback and that the outcome will be available to download from the consultation page¹. No date for publication of the outcome has been reported. The draft regulations would need to be made before the measures can take effect on 6 April 2027¹.

Households wanting to understand how consultations work can read our guide to consultations and discussion papers, and our ISAs section covers the different account types, including the Help to Buy ISA.