Isas 'should be completely tax free'

Chancellor Alistair Darling should move to make Isas completely tax free when he unveils his pre-Budget report next week.

This is according to Fidelity International, which said that changes to the tax efficiency of the Isa has ’diminished the product in the eyes of the public’ in recent years.

With Mr Darling set to deliver the pre-Budget report on Wednesday December 9th, the firm urged the government to boost the UK’s collective savings by targeting the confusion which surrounds Isas.

’We need to make Isas simple again to bring back their appeal and get away from the current situation where the value of the tax benefit varies with the asset class you are invested in,’ said Gary Shaughnessy, UK managing director at Fidelity International.

According to research carried out on behalf of Fidelity in September, 95 per cent of the UK population admitted to not fully understanding the advantages of an Isa.

Meanwhile, recent reports indicate that Mr Darling could decide to reverse Labour’s planned inheritance tax cut in the pre-Budget report.
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