The officials were asked to clarify 'serious confusion' about how the new rules will workNicholas Dawson07:05, 13 Jun 2026Senior Treasury officials have faced questions over "serious confusion" around changes to ISA allowances. The Government has yet to release vital details about how the new tax rules will work, despite the new system launching in less than 12 months.‌Top ministers recently gave evidence before the Treasury Committee, who sought clarification on the forthcoming ISA changes. Labour announced at the Autumn Budget 2025 that the ISA allowance would be restricted.‌Under existing regulations, you can save up to £20,000 each tax year into ISAs, and split this allowance as you choose between cash ISAs and stocks and shares ISAs. However, from April 2027, you will only be permitted to use £12,000 of the allowance freely, while the remaining £8,000 will solely be available for investments and no longer for cash savings.‌Savers aged 65 and above will be exempt from the alterations and will retain the current allowance. The Government also said it would introduce new provisions to stop people from holding 'cash-like' ISA deposits in stocks and shares ISAs.New ISA checks and interest chargesA previous update from HMRC stated: "The following rules will be introduced to avoid circumvention of the lower limit for cash ISAs:No transfers from stocks and shares and Innovative Finance ISAs to cash ISAsTests to determine whether an investment is eligible to be held in a stocks and shares ISA or is 'cash like'A charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA."‌Yet the precise details of how this will work are yet to be released. At the Treasury Committee hearing, committee chair Meg Hillier pressed ministers to provide some clarification here.State Pensioners to face major tax change'Very confusing'She said: "There is now some serious confusion arising about what happens to the dividends from a stocks and shares ISA and, particularly, how you define the money held in cash-like investment ISAs. What is happening? It is very confusing.‌"We are in June already and this is supposed to be coming in next April." Economic Secretary to the Treasury, Rachel Blake, responded: "I recognise the problem. We will be coming to you soon with the next steps on this. I appreciate that is not what you want to hear and perhaps may not be sufficient."Ms Hillier was far from satisfied with this reply. She said: "Did the Government not see this coming before the change was introduced? It seems a bit odd that we are still scrabbling around now trying to find an answer."Ms Blake sought to reassure that the issue had been anticipated and that further details regarding the policy shift were "imminent". Dan Rusbridge, deputy director of the personal finances and funds team at HM Treasury, then offered some further responses.‌He said the ISA allowance changes are part of a "package of measures" designed to encourage UK savers to begin investing. Regarding the unresolved matter of 'cash-like' ISA holdings, he explained: "In particular, there are questions about how we treat cash-like investments-things that are a bit like cash but are different, such as money market funds-to reflect that they are now an increasing part of people's investment portfolios and are not cash or a direct competitor with it."Trying to square that circle has been a tricky policy challenge. We have been engaging in a very full way with the broadest range of stakeholders to try to find a way through that. We will be coming out with details on that very soon."‌When will further details be set out about the ISA changes?He was questioned whether 'very soon' meant before summer or autumn. He responded: "Certainly before that. It will be very soon."Ms Hillier also raised concerns about reports suggesting a 22 per cent tax rate could be applied to cash-like deposits in a stocks and shares ISA. She described this as "very confusing" for savers who might be caught off guard by such a charge.She said: "You could quite legitimately put money in, not quite realise what you are going into and find that what you think is tax-free has been suddenly slapped with a 22 per cent tax. Minister, are the rumours that that could be happening right? It has been reported widely."Article continues belowMs Blake said she believed discussion of such a tax charge was "just rumours". The committee chair urged her to confirm that the Government has "no plans to tax interest or dividends".Ms Blake responded: "That is the first time I have heard that rumour." Mr Rusbridge said about the 'cash-like' holdings issue: "The Government will be coming forward with precise details to clarify exactly this very soon, because it is a really important question."He further added: "The coming announcement will describe in full detail exactly all the rules around anti-circumvention or however you want to describe it, so that ISA managers have all the detail they need to make sure they can be ready for when these changes come online in April next year."