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In 2023 the Chancellor announced in the Autumn Statement changes to ISA Subscriptions and how they are managed. This is in addition to the changes announced in 2022 on Capital Gains Tax and Dividends Tax Allowances. To help you understand how the changes could impact you, we’ll answer your most popular questions.
In the 2022 Autumn Statement, the allowance was reduced to £6,000 for the 2023/24 tax year and further to £3,000 for the 2024/25 tax year.
Capital Gains Tax (CGT) is a tax you might owe on the gain when you sell an asset (i.e. Investment) that has increased in value.
More information can be found about Capital Gains Tax and how it works on the Government website.
It’s the gain that is taxed. For example, if you bought £1,000 of an investment and sold it at £20,000, your gain would be £19,000 (£20,000 - £1,000).
Each year you have a Capital Gains Tax Allowance, set at £3,000 for the 2024/25 tax year, which means you won’t owe tax on any gains within this allowance.
In this example, where a gain of £19,000 has been made in 2024/25, £3,000 would fall within the CGT allowance. This leaves £16,000 that would be liable for CGT.
In the 2024/25 tax year, a basic rate taxpayer would owe 10% (£1,600 – assuming your income including the gain stays within the basic rate band). A higher-rate taxpayer would owe 20% (£3,200) on this gain.
Please note
Please note that not all investments are liable for Capital Gains Tax and there are separate Capital Gains Tax rules for selling properties, which are also detailed on the Government website.
In the 2022 Autumn Statement, changes were announced to this allowance. It was reduced to £1,000 for the 2023/24 tax year and to £500 for the 2024/25 tax year.
Everyone has a Dividend Allowance, which is £500 for the 2024/25 tax year. This means you can earn up to the allowance in dividends each tax year without owing tax.
Dividends are a portion of a company’s profits that are paid to its investors. The rate of tax you owe on dividends will depend on your income tax band.
There is more information about tax on dividends on the Government website.
Each year you have a Dividend Allowance. It is set at £500 for the 2024/25 tax year. This means you can earn up to the allowance in dividends each tax year without owing tax.
For example, if you receive £2,900 worth of dividends in the 2024/25 tax year, £500 of those would fall within your Dividend allowance and wouldn’t be taxed. It would leave £2,400 that would be liable for tax.
In the 2024/25 tax year a basic rate taxpayer would owe 8.75% (£210), a higher rate taxpayer would owe 33.75% (£810), and an additional rate taxpayer would owe 39.35% (£944.40) on this dividend income.
The 2023 Autumn Statement announced changes to how you can manage this allowance across different types of ISAs. From 6 April 2024, you can subscribe to multiple ISAs of the same type (except for Lifetime ISA) within the tax year. All subscriptions must stay within the overall ISA limit of £20,000.
ISA Subscriptions allow you to save a set amount of money each tax year that is protected against UK Capital Gains and Dividends tax. The amount is £20,000 for the 2024/25 tax year.
Start your Share Dealing ISA. You will just need your address, debit card details and national insurance number to hand.
Terms and conditions (PDF, 377 KB)
Simply log on to apply. Once you’ve accessed your Share Dealing Account, click on ‘Open a new account’ in the right-hand navigation.
The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.