Explanatory note

These Regulations amend the Individual Savings Account Regulations 1998 (S.I. 1998/1870) (“the principal Regulations”).

The amendments made by regulation 7 have effect in relation to the tax year 2025-26 and subsequent tax years. The amendments made by the rest of these Regulations have effect when the Regulations come into force (regulation 2).

Regulation 3 amends regulation 4 of the principal Regulation to provide the requirements to be met in relation to fractional interests in order that they qualify for investment in stocks and shares ISAs. It also makes provision for circumstances in which an account investor holds fractional interests which amount to at least one whole share.

Regulation 4 amends paragraph (4)(b) of regulation 4ZA of the principal Regulations so that the declaration by a qualifying individual needs to declare (if it is the case) that the qualifying individual does not qualify for a national insurance number.

Regulation 5 amends regulation 6 of the principal Regulations. It substitutes a new paragraph (2) which requires all other transactions by way of sale, and all transactions in fractional interests, to be at the open market price and (in the case of fractional interests) the price is to be in proportion to the fraction of the interest in the whole share.

Regulation 6 amends regulation 7 of the principal Regulations. It provides that only fractional interests which comply with new paragraph (2)(r) of regulation 7 qualify for investment in a stocks and shares ISA. It inserts new paragraphs (2B and (2C) to prescribe the shares and investments which qualify for a stocks and shares component.

Regulation 7 amends regulation 12 of the principal Regulations. An application to open an account that is not a junior ISA account or a Lifetime ISA must contain confirmation (if it is the case) that the applicant does not qualify for a national insurance number.

Regulation 8 amends regulation 21 of the principal Regulations. Where there is a transfer in part of an account’s current year subscriptions, and a current year’s subscription remains with the transferor after the transfer, new paragraph (6ZA) provides that the information specified in paragraph (6)(b)(iii) and (iv) does not need to be provided.

Regulation 9 amends regulation 21A of the principal Regulations. Where there is a transfer in part of cash account’s current year subscriptions, and a current year’s subscription remains with the transferor after the transfer, new paragraph (3ZA) provides that the information specified in paragraph (3)(ii) and (iii) does not need to be provided.

A Tax Information and Impact Note will be published on the HM Government website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.