![\"Nicholas](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/07\/Nicholas-Lyons-floated-fresh-Isa-rules.jpg\")
\t\tLyons was lord mayor of London before joining Standard Life\t<\/p>\n\t\t\tTuesday 28 July 2026 5:00 am
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tMonday 27 July 2026 8:12 pm\n\t<\/p>\n
\t\tLyons was lord mayor of London before joining Standard Life\t<\/p>\n
The tax-free wrapper on a stocks and shares Isa should be restricted to investments in UK assets, according to the chair of a top pension fund who also called for an inheritance tax carve-out for retail investors who buy government bonds.<\/p>\n
Speaking at an event, Standard Life chair Nicholas Lyons<\/a> argued limiting the tax incentive to investments in London-listed firms and private companies in the UK would help revive Britain\u2019s ailing capital markets and boost economic growth.<\/p>\n \u201cDo we really want to be lowering the cost of capital for American companies by giving a tax incentive for investors in Isas?\u201d he said. <\/p>\n \u201cIf you want to invest in US stocks, go right ahead, pay the capital gains and take the capital losses. But with Isas, and with the rare fiscal incentive available, why don\u2019t we go back to what the original PEP [personal equity plan] structure was, [where] you have to invest in UK assets?\u201d<\/p>\n British savers can currently save as much as \u00a320,000 a year free from income tax or national insurance via a stocks and shares \u2018individual savings account\u2019, or Isa. The tool is seen as vital for helping encourage better saving and investing rates in Britain. But under the current framework, retail investors can invest that cash to whichever companies or funds they wish, prompting many to choose foreign-owned and foreign-listed companies over domestic equivalents.<\/p>\n There is growing momentum behind calls for a shake-up of the wrapper, with critics arguing that other punitive taxes, like stamp duty on shares, make it more tax efficient to plough money into firms and funds based abroad.<\/p>\n Lyons: Treasury should explore Isa reform and inheritance tax carve out on gilts<\/p>\n Lyons, who also served as the lord mayor of London in 2023, said giving the stocks and shares Isa a domestic bias could help breathe new life into the UK\u2019s ailing capital markets and asset managers, which have suffered a years-long spell of outflows to rival exchanges and international tracker funds.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\t\u2018One-two punch\u2019 \u2013 Families face huge capital gains death tax under Burnham<\/a><\/p>\n The pension fund chair\u2019s proposal goes considerably further than plans for a British Isa put forward by Jeremy Hunt in 2024. Under the former Conservative Chancellor\u2019s proposal<\/a>, which was scrapped by Rachel Reeves<\/a> just six months after first being announced, savers would have been granted a \u00a35,000 wrapper to invest in UK equities on top of already existing Isa products.<\/p>\n The Standard Life chair also urged ministers to introduce an inheritance tax carve out for savers who buy the UK\u2019s sovereign debt. British retail investors currently own an unusually low share of their country\u2019s government bonds, known as gilts. Raising that proportion via a tax incentive would help boost demand for the coupons and bring down the \u201cmoron premium\u201d investors apply to them, Lyons said. It would also reduce the sway foreign hedge funds have over the price of the UK\u2019s debt, he added.<\/p>\n \u201cIf we could get retail investors incentivised then I think we do a couple of things,\u201d he said. \u201cWe create a bigger natural national demand for debt, but we also send a strong message to international investors that they don\u2019t have pricing power. And the way I\u2019ve suggested we do that is drop inheritance tax.\u201d<\/p>\n Lyons, who was speaking at the UKFPS & Coalition Defence Alignment Forum, said ministers could ringfence the fiscal breathing space from the move for the UK\u2019s rearmament drive. <\/p>\n A HM Treasury spokesperson said: \u201cWe want more people to benefit from the higher long-term returns that investing can provide, while helping unlock capital for growing British businesses.<\/p>\n \u201cThat\u2019s why we are building a stronger retail investment culture. We have maintained the \u00a320,000 Stocks and Shares ISA limit while reducing the Cash ISA limit from April 2027, launched targeted support to help people make informed financial decisions, and backed industry-led initiatives to promote the benefits of investing.<\/p>\n \u201cAlongside wider reforms to pensions and capital markets, these measures will help support investment in UK businesses and drive economic growth.\u201d<\/p>\n \t\t\t\t\tRead more<\/p>\n