Starting next tax year, crypto ETNs will only qualify for Innovative Finance ISAs, not mainstream stocks-and-shares ISAs, limiting U.K. investors’ access to tax-free savings.
HMRC will reclassify cryptocurrency exchange-traded notes (ETNs) as qualifying instruments only for Innovative Finance ISAs (IFISAs), effective from the start of the next tax year on April 6. This change will prevent crypto ETNs from being added to the mainstream stocks-and-shares ISAs, which offer tax-free savings. Currently, no IFISA platforms plan to support crypto ETNs, limiting investors’ tax-free exposure. The move comes after the Financial Conduct Authority lifted the retail ban on crypto ETNs last October, raising hopes for broader access to crypto investments through ISAs. However, HMRC's decision restricts this, positioning the U.K. as an outlier compared to other financial markets. Existing crypto ETN holders in ISAs will not be forced to sell their holdings, but future investments will be restricted.