The Government has today indicated an intention to make what could be a significant change to the Long Term Asset Fund (LTAF) regime, broadening the access of retail investors to LTAFs through their Stock & Shares ISAs.
The Government has unveiled plans to allow LTAFs to be held in Stocks & Shares ISAs from 2026. This announcement regarding broadening of access to private markets will potentially allow more individuals to invest in assets such as innovative businesses and infrastructure, with the aim of gaining better returns on their investment.
Today's announcement follows on from the recent clarification in HMRC’s Tax-free savings newsletter 17, published on 2 July 2025, and the draft ISA (Amendment) Regulations 2025 (the Regulations) presented to Parliament on 24 June 2025. The Regulations will amend the Individual Savings Account Regulations 1998 to (among other things) clarify that an LTAF is a qualifying investment for an Innovative Finance ISA (IF ISA).
What does Simmons think?
This announcement is good news in the sense that the changes would potentially allow wider access by retail investors to private, typically less liquid assets (and the greater returns these can generate). However, we need to see the detailed proposals before we can judge whether this will be a success.
Key immediate considerations include how LTAFs can be held without compromising an ISA holder's ability to close their ISA or transfer it to another ISA manager. Additionally, the regulatory framework governing the sales process for investments in LTAFs through a Stocks & Shares ISA will need to be clarified. These factors are likely to influence whether ISA managers choose to offer access to LTAFs on their platforms.
Another important question is the extent to which LTAF fund managers will then decide to make LTAFs available to retail investors through ISAs.
For more about LTAFs, see our dedicated online resource here.
