Will I need to declare uninvested ISA cash on my tax return?

Q: My stocks & shares ISA reinvests dividends. Any cash surplus is limited and held very briefly, and I am not party to the decisions on these amounts. Will I now have to extract information about these briefly uninvested cash amounts for my Self Assessment tax return in order to pay the new 22% charge?

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A: Thankfully not. The government has said that individuals won’t be required to declare any interest paid on an ISA. Instead, your ISA provider be responsible for deducting the 22% tax and paying it to HMRC.

For those who don’t know, ISA rules will be changing in April 2027. The annual cash ISA allowance for people under 65 will fall to £12,000. To prevent people getting around this, there will also be a 22% charge on any interest paid on uninvested cash within a stocks and shares ISA. This charge will apply to everyone, regardless of age.

• Read: How ISAs will change in 2027

Rules around money market funds are also shifting. These low-risk funds can still be held in investment ISAs and enjoy tax-free returns. However, they cannot represent 100% of your portfolio from next April. In this scenario, they will be classed as “non-qualifying investments”.

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Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.