Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether the proposed new 22% tax on cash held in a Stocks and Shares ISA will apply if an individual has not used up their £12,000 Cash ISA allowance; and whether the 22% tax will apply to money market funds held in a Stocks and Shares ISA.

From April 2027, a flat-rate charge of 22% will apply to any interest or alternative finance return paid on cash held within a Stocks and Shares ISA. This charge applies regardless of whether an individual has used their full Cash ISA allowance. The charge will be accounted for by ISA managers and savers will not be required to report ISA interest to HMRC.

Money Market Funds may continue to be held in a Stocks and Shares ISA and are not subject to the 22% charge, although anti-circumvention rules will require that such funds do not constitute the sole investment held in the account.