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The Individual Savings Account (Amendment) Regulations 2024

S.I. 2024/350 · Made 11 March 2024

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

This Statutory Instrument has been made, in part, to correct an error in S.I. 2023/264 and is being issued free of charge to all known recipients of that Statutory Instrument.

INCOME TAX

CAPITAL GAINS TAX

Made 11th March 2024

Laid before the House of Commons 12th March 2024

Coming into force 6th April 2024

The Treasury make these Regulations in exercise of the powers conferred by section 151(1) and (2) of the Taxation of Chargeable Gains Act 1992f1, sections 694, 695, 695A, 696, 698 and 701 of the Income Tax (Trading and Other Income) Act 2005f2 and section 4(6) of, and paragraphs 3, 7 and 9 of Schedule 1 to, the Savings (Government Contributions) Act 2017f3.

Annotations to the whole text

Footnotes

f1

1992 c. 12; section 151(2) was substituted by paragraph 436 of Schedule 1 to the Income Tax (Trading and Other Income) Act 2005 (c. 5) and amended by section 40(6) of the Finance Act 2011 (c. 11) and section 27(2) of the Finance Act 2016 (c. 24).

f2

2005 c. 5; sections 694 and 701 were amended, and section 695A was inserted, by section 40 of the Finance Act 2011. Sections 695 and 698 were amended by paragraphs 131 and 132 of Schedule 4 to the Commissioners for Revenue and Customs Act 2005 (c. 11). Section 701 was also amended by section 40 of the Finance Act 2008 (c. 9).

f3

2017 c. 2.

Contents

  1. 1Citation and commencement
  2. 2Application in respect of individuals aged 16 or 17
  3. 3Amendment of the Individual Savings Account Regulations 1998
  4. 4Amendment of regulation 2
  5. 5Amendment of regulation 2D
  6. 6Amendment of regulation 2G
  7. 7Amendment of regulation 4
  8. 8Amendment of regulation 4ZA
  9. 9Amendment of regulation 4A
  10. 10Amendment of regulation 4AA
  11. 11Omission of regulation 4B
  12. 12Amendment of regulation 5DZ
  13. 13Amendment of regulation 5DZA
  14. 14Amendment of regulation 5DDA
  15. 15Amendment of regulation 5DDB
  16. 16Amendment of regulation 8A
  17. 17Amendment of regulation 10
  18. 18Amendment of regulation 10A
  19. 19Amendment of regulation 12
  20. 20Amendment of regulation 14
  21. 21Amendment of regulation 17
  22. 22Amendment of regulation 17A
  23. 23Amendment of regulation 21
  24. 24Amendment of regulation 31
  25. 25Amendment of the Schedule
  26. Signature
  27. Explanatory note

1Citation and commencement

These Regulations may be cited as the Individual Savings Account (Amendment) Regulations 2024 and come into force on 6th April 2024.

2Application in respect of individuals aged 16 or 17

(1)

The amendments made by the provisions specified in paragraph (2) do not apply in respect of an individual who—

(a)

had reached the age of 16 on or before 5th April 2024, and

(b)

has not subsequently reached the age of 18.

(2)

The specified provisions are—

3Amendment of the Individual Savings Account Regulations 1998

The Individual Savings Account Regulations 1998f1 are amended as follows.

4Amendment of regulation 2

In regulation 2 (interpretation), in paragraph (1)(b)—

(a)

in the definition of “non-UCITS retail scheme”, in paragraph (b) after “by virtue of section” insert “271Af1 or”;

(b)

in the definition of “recognised UCITS”—

(i)

omit paragraph (a);

(ii)

for paragraph (c) substitute—

“(c)

a recognised scheme by virtue of section 271A or 272 of FISMA 2000f2 that is a UCITS within the meaning given by section 236Af3 of that Act;”.

5Amendment of regulation 2D

In regulation 2D (regulations that do not apply to junior ISA accounts) omit “4B,”.

6Amendment of regulation 2G

In regulation 2G (continuing account of a deceased investor and administration-period investments), in paragraph (2) for sub-paragraph (c) substitute—

“(c)

the day on which a person within section 694A(2) of ITTOIA 2005f1 withdraws all account investments, other proceeds in respect of such investments and cash representing subscriptions to the account.”.

7Amendment of regulation 4

In regulation 4 (general conditions for accounts and subscriptions to accounts)—

(a)

in paragraph (1ZA)(a) omit “(ba) and”;

(b)

in paragraph (1B) omit sub-paragraphs (a), (b) and (ba);

(c)

in paragraph (6)(b) after “innovative finance component” insert “other than those within regulation 8A(2)(cb)”;

(d)

in paragraph (7) after “but” insert “, except in the case of qualifying investments for an innovative finance component within regulation 8A(2)(cb),”;

(e)

omit paragraphs (12) and (13).

8Amendment of regulation 4ZA

In regulation 4ZA (subscriptions to an account other than a junior ISA account)—

(a)

in paragraph (5) for “(c) to (f)” substitute “(c) and (f)”;

(b)

in paragraph (9)(b) for “(c) to (f)” substitute “(c) and (f)”.

9Amendment of regulation 4A

In regulation 4A (repair of certain incompatible account and excess subscriptions - accounts other than junior ISA accounts)—

(a)

for paragraph (1) substitute—

“(1)

An invalid account is eligible for repair if, in relation to the year in which the subscriptions to the account were made (“the relevant year”) it meets the condition in paragraph (1A).

(1A)

The condition in this paragraph is that the account is invalid only because the overall subscription limit in regulation 4ZA(1) has been exceeded.”;

(b)

in paragraph (2)(a) omit “, and regulation 4B (except for determining when an account is closed) only”;

(c)

in paragraph (3)(b) for “conditions of regulation 4(1B)(a), (b) or (ba), or 4ZA(1), as the case may be” substitute “overall subscription limit in regulation 4ZA(1)”;

(d)

in paragraph (4)(a)(i) omit “within the meaning in regulation 4B)”;

(e)

omit paragraph (6).

10Amendment of regulation 4AA

In regulation 4AA (application of the repair provisions to Lifetime ISAs), in paragraph (4) omit “or a payment described in regulation 10A(4)(c)”.

11Omission of regulation 4B

Omit regulation 4B (closure of cash account that is not a junior ISA account prior to the opening of the same type of account to be disregarded once).

12Amendment of regulation 5DZ

In regulation 5DZ (treatment of ISA where funds transferred on maturity of child trust fund - instructions), in paragraph (2)(b)(i) omit “(b) to”.

13Amendment of regulation 5DZA

In regulation 5DZA (treatment of ISA where funds transferred on maturity of child trust fund - no instructions), in paragraph (2)(b) omit “(b) to”.

14Amendment of regulation 5DDA

In regulation 5DDA (additional permitted subscription to an account other than a junior ISA account)—

(a)

in paragraph (2)(e)(v) for “in the case of an innovative finance account” substitute “in the case of non-cash assets comprised or included in an innovative finance account, other than those specified in regulation 8A(2)(cb)”;

(b)

for paragraph (3A) substitute—

“(3A)

For the purposes of paragraph (3), the value of any qualifying investments for an innovative finance component, other than those specified in regulation 8A(2)(cb) and (d), is the outstanding principal balance under those investments in respect of which payments are due to be made to the account manager.”;

(c)

in paragraph (11)(b)(iv) after “8A(2)(ca)” insert “or (cb)”.

15Amendment of regulation 5DDB

In regulation 5DDB (flexible account)—

(a)

omit paragraph (2);

(b)

in paragraph (3) omit “other”;

(c)

in paragraph (6) omit “of the whole of previous years’ subscriptions”.

16Amendment of regulation 8A

In regulation 8A (qualifying investments for an innovative finance component)—

(a)

in paragraph (2) after sub-paragraph (ca) insert—

“(cb)

investments that meet the condition in paragraph (5) and—

(i)

are qualifying investments under regulation 7(2)(f), or

(ii)

would be qualifying investments under regulation 7(2)(g), but for the condition in paragraph (6) being met in respect of them;”;

(b)

after paragraph (4) insert—

“(5)

The condition in this paragraph is that the investments are subject to a notice period that would prevent the condition in regulation 4(7) from being met in respect of them if they were held in a stocks and shares account.

(6)

The condition in this paragraph is that the instrument constituting the scheme provides for it to operate limited redemption arrangements in accordance with Rule 6.2.16(7) of COLLf1.”.

17Amendment of regulation 10

In regulation 10 (qualifying individuals who may invest under an account that is not a junior ISA account nor a Lifetime ISA)—

(a)

in paragraph (2)—

(i)

for sub-paragraph (a) substitute—

“(a)

who is 18 years of age or over;”;

(ii)

omit sub-paragraphs (b), (c) and (cza);

(b)

omit paragraph (3).

18Amendment of regulation 10A

In regulation 10A (Lifetime ISA qualifying individuals who may invest under a Lifetime ISA), in paragraph (4) omit—

(a)

the “and” after sub-paragraph (b);

(b)

sub-paragraph (c).

19Amendment of regulation 12

In regulation 12 (conditions for application to open an account that is not a junior ISA account or a Lifetime ISA)—

(a)

for paragraph (1) substitute—

“(1)

An application by an individual to open an account must—

(a)

be made to an account manager in a statement, and

(b)

meet the conditions in paragraphs (2), (3) and (4).”;

(b)

in paragraph (3)—

(i)

in sub-paragraph (b) for “in which the applicant subscribes to the account” substitute “until the account is closed”;

(ii)

omit sub-paragraphs (d) and (e);

(iii)

in sub-paragraph (f) for “16” substitute “18”;

(iv)

omit sub-paragraph (fa);

(c)

omit paragraph (11A).

20Amendment of regulation 14

In regulation 14 (account manager - qualifications and Board’s approval), in paragraph (2)(d) omit paragraph (i).

21Amendment of regulation 17

In regulation 17 (account manager - withdrawal by Board of approval), in paragraph (2)—

(a)

omit the “or” after sub-paragraph (a);

(b)

after sub-paragraph (b) insert—

“; or

(c)

that a person to whom they have given approval to act as an account manager has not, within a period of 18 months beginning with the day on which approval was given, acted as an account manager in respect of an account.”.

22Amendment of regulation 17A

In regulation 17A (account manager - withdrawal by Board of approval of junior ISA manager), in paragraph (2)—

(a)

in sub-paragraph (a) for “manager”, in the first place it occurs, substitute “managed”;

(b)

omit the “or” after sub-paragraph (a);

(c)

after sub-paragraph (b) insert—

“; or

(c)

that a person to whom they have given approval to act as an account manager has not, within a period of 18 months beginning with the day on which approval was given, acted as an account manager in respect of an account.”.

23Amendment of regulation 21

In regulation 21 (transfers relating to accounts other than junior ISA accounts)—

(a)

for paragraph (3) substitute—

“(3)

The current year’s subscriptions and the previous years’ subscriptions may be transferred in whole or in part.”;

(b)

for paragraph (4B) substitute—

“(4B)

Subscriptions in sub-paragraphs (a) and (b) of the definition of “the current year’s subscriptions” in paragraph (1) are to be treated, for all purposes, as if they had been made to the account held with the transferee where—

(a)

the current year’s subscriptions (with or without other subscriptions) are transferred under this regulation, and

(b)

the transferor has provided the information specified in paragraph (6), if that paragraph applies in relation to the transfer.”;

(c)

in paragraph (4C) omit sub-paragraphs (a), (b) and (c);

(d)

for paragraph (5B) substitute—

“(5B)

Paragraph (5) does not apply where—

(a)

a transfer falls within paragraph (2)(b), or

(b)

a transferor provides information to a transferee in accordance with regulation 21A(2)(b)(ii).”;

(e)

in paragraph (6)—

(i)

omit sub-paragraph (ba);

(ii)

in sub-paragraph (d) omit paragraphs (vi) and (vii).

24Amendment of regulation 31

In regulation 31 (returns of information by account manager)—

(a)

in paragraph (3)(d)—

(i)

for “8A(2)(a) or 8A(2)(ca)” substitute “8A(2)(a), (ca) or (cb)”;

(ii)

for “(i) and (ii)” substitute “(i) to (ii)”;

(iii)

in paragraph (i), at the beginning insert “for investments of the kind specified in regulation 8A(2)(a) or (ca),”;

(iv)

after paragraphs (i) and (ii) omit “and”;

(v)

after paragraph (i) insert—

“(ia)

for investments of the kind specified in regulation 8A(2)(cb), their market value determined either as at 5th April in that year, or any other valuation date in that year, not falling earlier than 5th October; and”;

(b)

in paragraph (4)(d)—

(i)

after paragraphs (i) and (ii) omit “and”;

(ii)

after paragraph (iii) insert—

“, and

(iv)

the market value of investments specified in regulation 8A(2)(cb).”.

25Amendment of the Schedule

In the Schedule (Lifetime ISA further provision)—

(a)

in paragraph 1 (interpretation)—

(i)

in sub-paragraph (1)—

(aa)

for the definition of “claim period” substitute—

  • ““claim period” means—

    1. (a)

      a period beginning with the 6th day of a month and ending with the 5th day of the following month, or

    2. (b)

      such period as may be specified from time to time under paragraph 2(1);”;

(bb)

in the definition of “qualifying addition” omit “or a payment under regulation 10A(4)(c)”;

(ii)

omit sub-paragraphs (2), (3) and (4);

(b)

in paragraph 2 (government bonus claim) omit sub-paragraph (11);

(c)

in paragraph 7 (definitions for the purposes of paragraph 6), after the definition of “a legal interest in land” insert—

  • ““loan” does not include a loan made by a person who is connected to the account investor, and for this purpose “connected” has the meaning given by section 993 of ITA 2007f1;”;

(d)

in paragraph 13 (withdrawals: information returns) omit sub-paragraph (5).

Signature

Joy Morrissey

Scott Mann

Two of the Lords Commissioners of His Majesty's Treasury

11th March 2024

Explanatory note

(This note is not part of the Regulations)

These Regulations amend the Individual Savings Account Regulations 1998 by:

  • increasing the age at which a cash ISA can be held from 16 to 18, except in relation to individuals who are 16 or 17 years old on 5th April 2024 (and who have not subsequently reached the age of 18) who can continue to have, apply for or transfer a single cash ISA account (regulations 2, 17(a)(i) and 19(b)(iii));

  • updating definitions relating to certain investment funds (regulation 4);

  • permitting an individual to subscribe to more than one ISA account of the same type in a tax year, allowing the partial transfer of subscriptions made in the current tax year and removing the requirement to make a fresh application to open an account that they already hold (regulations 5, 6, 7(a) and (b), 8, 9, 11, 12, 13, 15, 17(a)(ii) and (b), 19(a), (b)(i) and (ii) and (c) and 23(a) to (c));

  • removing transitional provisions relating to the introduction of Lifetime ISAs in the tax year 2017/18, which are now obsolete (regulations 7(e), 10, 18, 23(e) and 25(a), (b) and (d));

  • allowing certain investments to be held in an innovative finance account, where those investments are subject to a notice period that means they cannot be held in a stocks and shares account (regulations 7(c) and (d), 14, 16 and 24);

  • removing a provision which allowed certain institutions based in EU member states to conduct business without being present in the United Kingdom (regulation 20);

  • allowing HMRC to withdraw their approval of an account manager who has not acted as such within 18 months of being approved (regulations 21 and 22(b) and (c));

  • correcting a typographical error in an earlier amendment (regulation 22(a));

  • removing a requirement for an account manager to provide information about a transfer if they are transferring the account to themselves (regulation 23(d));

  • providing that a first-time residential purchase will not qualify as a withdrawal from a Lifetime ISA if the purchase is funded by a loan from a person who is connected to the account investor (regulation 25(c)).

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