New ISA Rules: Long‑Term Asset Funds Go Live in April 2024
Heads up, savvy savers! The government’s got a fresh idea that could turn your ISA into a private‑market powerhouse.
What’s the Deal?
- Long‑Term Asset Funds (LTAFs) will be eligible for ISAs starting April 2024.
- Open‑ended property funds with longer notice periods are also gaining the green light.
- Details are tucked away in the “Autumn Statement” documents – think of it as the official playbook.
Why Does It Matter?
Jonathan Moyes, Head of Investment Research at Wealth Club, gave the lowdown:
- “The world’s top investors—endowment funds, sovereign wealth funds, family offices—have always liked private markets as a seasoning in a diversified portfolio.”
- “Companies are staying private longer, and so a lot of growth and innovation is happening off‑the‑record. Allowing LTAFs inside an ISA means you can tap into that growth with a tax‑friendly wrapper.”
- “And hey, this move should give the lagging Innovative Finance ISA a fresh lease of life.”
But Wait… What’s the Fresh‑Curr!?
Only £144 million flowed into Innovative Finance ISAs in 2021/22— a mere 0.2% of all ISA subscriptions. A drop that’s no surprise, given the ISA’s rocky association with peer‑to‑peer lending.
With LTAFs on board, the wrapper is set to become a much tougher option for wealthy investors. Think of it as adding a killer sauce to a bland dish.
Bottom Line
From April 2024, going private isn’t just a business decision—it’s a smart, tax‑efficient way to grow your money in an ISA. So, brace yourself for a new era of investment where the biggest innovations are happening behind closed doors, and you get to reap the rewards.
