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Only interest paid on cash in the account will be subject to the new tax charge, so you’re really asking how long cash has to be held to earn interest. In most cases it will be the balance at the end of each day that matters.
So it’s not the cash itself that’s taxable, it’s only the interest earned on uninvested cash that’s under fire?
Short answer, HMRC hasn’t said yet.
Long answer, it’ll be 22% of the interest gained on all cash or ‘cash like’ instruments held within a S&S ISA. They haven’t defined what a ‘cash-like’ instrument is or said anything about where cash is held for a short period. This is particularly a pain in the arse for platforms where they don’t automatically disinvest to pay fees. So with AJ Bell Dodl I have a LISA and have to keep some cash set aside for fees so I don’t accidentally build up any debt.
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I have a Stocks and Shares ISA with Trading212, and am aware of the UK Government’s new tax rules coming in 2027, which state that money held in a Stocks and Shares ISA will now be subject to tax.
The question I have is what period constitutes “holding money in the account”? Is it just anything that’s held when a new tax year starts? Or held for a full tax year?
For every S+S ISA holder, money will pass through this account by-default every time they sell shares, or make deposits to invest. If you are buying and selling stocks, that’s going to be a lot of deposits flowing back and forth through that account. So, when does that get seen as “holding” that money, rather than just using the account to facilitate deposits/sales?
Apologies if this is a silly question, but I’m not sure where to find clarification on this.