Fractional shares will be permitted in ISAs

Savers will be able to hold fractional shares in individual savings accounts (ISAs) HMRC has said.

In the past fractional shares have not qualified for ISAs. However this is to change as the government looks set to implement the previous government’s announcement in the 2023 autumn statement (para 5.43 of the Green Book) that it would introduce legislation to allow fractional shares to be held in ISAs. This was put on hold as a result of the 2024 general election.

HMRC said: ‘The government has committed to changing the ISA rules to allow certain fractional shares. Taking a pragmatic approach we will not raise an assessment on managers or investors for fractional shares acquired before these changes are made.’

The amended regulations will be made available in advance of their coming into force. HMRC said it will work with the industry to make clear...