"The change to the rate of Capital Gains Tax (CGT) will reduce the value of equity ISAs to investors. Depending on growth rates, the benefit might be worth £72 per year for a basic rate taxpayer, or less than £105 for a higher rate taxpayer. These figures are correct if the annual investment return is 5%, split equally between income and growth. Prior to the changes planned for next year, these figures would be over £76 and £144 respectively.
"If the total annual return is 10%, with 3% of that being income, the annual tax saving for a basic rate taxpayer is less than £135. For a higher rate taxpayer, the annual saving is approximately £177. At present, this would be worth almost £155, or £288 for a higher rate taxpayer.
"Whilst a tax exempt savings plan is attractive in principle, the real saving in tax is falling and continues to be of most benefit to higher rate taxpayers."
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