Regulation 5DDB Flexible accountF1F2

−The terms and conditions of an account (other than a junior ISA account F3or a Lifetime ISA) (“flexible account”) may provide for an account investor to be able to replace (in whole or part) a cash amount withdrawn by the account investor in any year by a replacement subscription of a cash amount F4or qualifying investments for a stocks and shares component within regulation 7(2)(h) (“replacement subscription”) made in that year.

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Any replacement of a previous years’ subscription may be made only to the account from which the withdrawal of a cash amount it is replacing was made.

Any replacement subscription that is not deemed to be a replacement of a previous years’ subscription is to be treated as a subscription to an account as specified in regulation 4ZA (subscriptions to an account other than a junior ISA account).

F7Subject to paragraph (4A), any withdrawal of a cash amount in any year is to be deemed to be made first out of a current year’s subscription.

No withdrawal under paragraph (1) may reduce the current year’s subscription amount to less than nil.

Any replacement subscription is to be deemed to be a replacement first of any withdrawal of a cash amount made out of a previous years’ subscription.

On any transfer under regulation 21 F9..., the right of the account investor under paragraph (1) in relation to an account transferred is to cease in respect of a withdrawal of a cash amount from the account made before the transfer.

Paragraph (6) does not apply where an account is transferred in a bulk transfer of accounts.

For the purposes of this regulation−

• “current year’s subscription” means (other than a subscription made in accordance with regulation 5D)−

  1. (a)

     a subscription made to the account by the account investor in the year in which a replacement subscription is made;

  2. (b)

     a subscription made to any other account by the account investor in the year in which a replacement subscription is made and transferred to the account; and

  3. (c)

     the qualifying investments and other proceeds (including income) representing the subscriptions in sub-paragraphs (a) and (b) of this definition;