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Neptune calls for Isa tax rethink

Neptune has called for the Chancellor to revisit the 10 per cent tax credit on equity Isas as their benefit is “largely illusionary” in its current state.

Ahead of the pre-Budget report on Wednesday, Neptune Investment Management deputy managing director Richard Green has called on Chancellor Alistair Darling to change the current Isa tax laws, which he says do not currently encourage enough people save.

Green argues that since 1999 the Government has made the ‘tax credit’ deducted at source non-reclaimable, which consequently means for many investors who may not pay CGT anyway, the tax-free benefit is “largely illusory”.  

He says: “Whilst the capital returns from Isas remain free of capital gains tax, these plans are inferior to their predecessors – personal equity plans. We strongly encourage the Government to revisit this mainstream savings vehicle and restore its fully tax-free status.”

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