"I Heard It Should Be Extended Until 9999" Retail Investors Scramble Over ISA Accounts, Outraged [The World of Retail Investors]

[Financial News] #. A 35-year-old man identified as A, who had been making monthly installment purchases of an S&P 500 ETF through an Individual Savings Account (ISA), became increasingly worried after reading news last week about the tax reform plan.He was confused by reports that a new “productive finance ISA” would be introduced for domestic investments only, while one of the ISA’s key advantages — carrying over unused contribution limits — would be abolished, along with a five-year limit on contract terms.
As the news spread, online users began offering advice such as, "If you want to invest in the U.S. market, make an ISA account right now," and "Set the maturity to 9999 years and sign up again."
As backlash from retail investors grew, the government was reportedly reviewing the ISA reform plan, but A remains undecided. He said, "I don't know what to do when I have no idea how the policy will change."

An ISA is a tax-saving account that lets investors hold stocks, exchange-traded funds (ETFs), funds, and deposits in one account while receiving tax benefits. Earnings generated within the account are tax-free up to a certain limit — 2 million won for a standard account and 4 million won for a low-income or youth account — and any amount above that is taxed separately at 9.9%.
As the name suggests, tax savings are the ISA’s biggest advantage. Because taxes are levied only on net gains after offsetting profits and losses during the subscription period, the tax benefit is greater than with a regular account. That is why it became popular as a “universal tax-saving account” and emerged as a key tax-saving tool for retail investors in the first half of this year, when the KOSPI (Korea Composite Stock Price Index) was on a bull run.
Retail investors have been flooding online forums with complaints about the tax reform plan announced by the government on the 3rd for precisely this reason. If the abolition of unused contribution-limit carryovers removes a major benefit that allowed investors to deposit a lump sum when they suddenly had cash on hand, then investors with irregular income will see their tax-free benefits shrink.
The backlash also stems from the fact that, under the tax reform plan, accounts would no longer be able to be extended indefinitely as before. Instead, taxes would have to be settled every five years, after which investors would need to re-enroll. If someone closes an account after fully using the 100 million won limit and then signs up again, they cannot deposit the full amount at once and must build it back up at 20 million won a year over five years.
As a result, some account holders are sharing a so-called “pro tip” to set the maturity to something like “9999 years” before the tax reform plan takes effect, effectively making it indefinite. The idea is to stretch the contract term as long as possible before the revised rules are implemented so they can maximize the tax benefits.
People online are also advising others to close existing accounts and open new ones before the end of this year. ISA maturity extensions are generally possible starting three months before expiration, but if the extension is made after the tax reform, a 9999-year ultra-long extension would no longer be possible.
However, closing an account could affect the tax benefits or contribution history accumulated in the existing account. For that reason, some are advising investors not to rush into cancellation and instead weigh their own subscription period and profit size first.


One reason the backlash from retail investors was so intense was the timing. With the KOSPI plunging 28.94% in July alone, marking its steepest monthly drop since 1990, retail investors vented anger over the idea of cutting ISA benefits while stocks were already falling. For investors already suffering in the crash, the reduction in tax benefits felt like a double blow.
In the end, President Lee ordered a review, and the ruling party also called for the current system to be maintained. At a State Council of South Korea meeting on the 11th, Lee said, "Policy must follow the situation the people are facing. We must not make the mistake of forcing people's lives to fit existing systems in reverse." Political circles interpret this as a reference to recent controversies over the government's tax reform measures, including the ISA overhaul and a bill aimed at preventing stock-price suppression.
Lee also criticized problems in the system design and ordered a full review during a situation-check meeting on the 7th. Accordingly, the Ministry of Economy and Finance is reportedly considering restoring the tax reform plan to its original form, including a maximum five-year contract term for standard ISAs and the abolition of unused contribution-limit carryovers.
According to Newsis on the day, an official from the Ministry of Finance and Economy said, "We are also reviewing a plan to keep the ISA carryover and maturity-extension provisions as they were before the reform plan," adding, "However, nothing has been specifically decided yet." The tax reform plan will be finalized in the National Assembly after the legislative notice period, which runs through the 20th.

[email protected] Kim Hee-sun Reporter