From 6 April, British investors will face new restrictions on the purchase of cryptocurrency exchange traded notes (ETNs) within stocks-and-shares Individual Savings Accounts (ISAs).
This policy change, introduced by HM Revenue & Customs (HMRC), reclassifies these products and will prevent new crypto ETN purchases inside conventional stocks-and-shares ISAs when the new tax year begins.
The ruling comes despite government ambitions to develop the UK’s position in financial technology, raising questions among investors and industry leaders about the future of crypto assets in regulated tax-free wrappers.
Background to HMRC’s ISA Ruling
Crypto ETNs, which allow individuals to gain exposure to cryptocurrency price movements via regulated markets, were previously permitted in some standard stocks-and-shares ISAs.
In October, HMRC confirmed a reclassification, determining that these products would qualify for Innovative Finance ISAs (IFISAs) only, excluding them from stocks-and-shares ISAs. The IFISA scheme is typically used for peer-to-peer lending and other alternative investments.
However, it does not offer Financial Services Compensation Scheme (FSCS) protection, and currently comprises 57 providers largely focused on peer-to-peer lending, property finance, and crowdfunding.
Timeline for Restrictions
The reclassification will take effect at the start of the 2026–27 tax year. Investors will not be permitted to buy new crypto ETNs within stocks-and-shares ISAs from 6 April 2026 onwards.
HMRC has clarified that investors with existing crypto ETN holdings in such ISAs will not be forced to sell or restructure their current investments. This change follows HMRC’s communication that extending the prohibition to current holdings could cause market disruption and pose operational challenges for ISA managers.
Impact on Investors and Platforms
At present, no platform in the UK is authorised to offer both crypto ETNs and IFISAs, removing any practical means for investors to continue holding new crypto ETNs within any ISA wrapper after the deadline. While a handful of investment firms.
including Interactive Investor, Freetrade, Revolut, Trading 212, Saxo, and Moneyfarm currently allow access to crypto ETNs in stocks-and-shares ISAs, leading platforms such as Hargreaves Lansdown and AJ Bell do not.
Hargreaves Lansdown has announced plans to introduce crypto ETN offerings by June, although the restriction will prevent these products from being held within stocks-and-shares ISAs.
Regulatory and Industry Response
Sector experts have expressed concern about the regulatory complexity faced by retail investors. Jason Hollands, managing director at Evelyn Partners, stated that “all the regulation points in different directions”, describing the situation as problematic for the market.
He noted that existing IFISA providers have “little commercial incentive” to expand into exchange-listed securities, given the different operational infrastructure required.
Georg Bauer, head of investment and product for global platform solutions at Fidelity International, said the move “challenges the intention of allowing regulated access to crypto assets and protecting consumers from greater risk in using unregulated products”.
Policy Context and Political Implications
The restriction on crypto ETNs in ISAs comes at a time when the government had set out ambitions to establish the UK as a leader in digital assets. Chancellor Rachel Reeves previously highlighted the importance of financial innovation and consumer choice, but the new HMRC approach appears at odds with this stated direction.
Government officials have indicated that the “innovative nature” and developing market for crypto ETNs underpin the decision, which they argue strikes a balance between investor choice and “managing risk responsibly”.
Final Summary
The new HMRC restrictions will bar British investors from acquiring cryptocurrency ETNs in stocks-and-shares ISAs from the start of the next tax year, marking a significant change in the regulation of digital assets in tax-incentivized accounts. Industry voices have expressed unease, citing regulatory confusion and the lack of available ISA platforms for continued investment in crypto ETNs.
While government authorities maintain that the policy balances innovation with risk management, the move introduces complexity for investors seeking exposure to this growing asset class. The situation underscores ongoing developments in UK tax policy and the continued evolution of digital asset regulation.
For up-to-date guidance on ISA changes and investment opportunities, professionals and individual investors may look to digital tools such as Pie for further insights.
