The renewed case for ISAs


Improved terms, together with the erosion of tax allowances elsewhere, are making ISAs a favourable option for the new tax year.


Since their launch, successive Chancellors have made revisions to Individual Savings Accounts (ISAs). Before his Budget proposal of an extra £5,000 for a ‘UK ISA’, the current Chancellor made arguably his biggest hitting pro-ISA changes in the Autumn Statement 2022:



  • Halving the dividend allowance to £1,000 for 2023/24 and again to £500 for 2024/25.
  • The capital gains tax (CGT) annual exempt amount was cut from £12,300 to £6,000 for 2023/24, then to £3,000 for 2024/25.
  • Almost £25,000 was cut from the additional rate threshold leaving many more taxpayers with a zero personal savings allowance (PSA) from 2023/24.


The dramatic reductions in the dividend allowance and the CGT annual exempt amount alone mean you could be paying up to £2,450 more tax on the returns from your investments in 2024/25 than 2022/23. Even a basic rate taxpayer could be over £1,050 worse off.  

ISAs offer a way to sidestep these tax increases. a reminder:

  • Dividend income within an ISA is free of UK income tax, although withholding tax may apply to foreign dividends.
  • Interest from deposits or fixed interest securities is also free of UK income tax.
  • Gains on investments held within ISAs are free of CGT.
  • There is nothing to report regarding ISAs on your tax return.


Now is the time to consider your ISA contributions for 2024/25, and review the investments holdings in existing ISAs to maximise those potential tax savings. 


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To arrange an appointment to discuss how we can help you with your financial planning, or other related matters, you can contact us via your usual MHA adviser, or directly on 01604 621 421, or email the team on


General risk warnings & other important information

This is a marketing communication, for general information only, and is not intended to be individual investment advice, a recommendation, tax, or legal advice. The views expressed in this article are those of MHA Caves Wealth or its staff and should not be considered as advice or a recommendation to buy, sell or hold a particular investment or product. In particular, the information provided will not address your personal circumstances, objectives, and attitude towards risk. Therefore, you are recommended to seek professional regulated advice before taking any action.

Key Risks: Capital at risk. Past performance is not a guide to future performance. The value of an investment and the income generated from it can go down as well as up, and is not guaranteed, therefore you may not get back the amount originally invested. Investment markets and conditions can change rapidly. Investments should always be considered long term.

Investments do not offer the same level of capital security as deposit accounts. Investing in shares should be regarded as a long-term investment and should fit with your overall attitude to risk and financial circumstances. 

The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested. 

Past performance is not a reliable indicator of future performance. 

The Financial Conduct Authority does not regulate tax advice. Tax treatment varies according to individual circumstances and is subject to change.