The Individual Savings Account (Amendment) (No. 3) Regulations 2026

These Regulations may be cited as the Individual Savings Account (Amendment) (No. 3) Regulations 2026.

These Regulations come into force on 29th October 2026.

The amendments made by these Regulations have effect in relation to withdrawals made on or after 29th October 2026.

The Schedule (Lifetime ISA further provision) is amended as follows.

For paragraph 5 (specified percentage of withdrawal charge) substitute—

“Specified percentage for withdrawal charge

5

For the purposes of paragraph 8(2) of Schedule 1 (charge when unlisted withdrawal made), the specified percentage is—

(a)

20% in relation to a withdrawal to which paragraph 6A applies;

(b)

25% in relation to any other withdrawal.”.

After paragraph 6 (first-time residential purchase) insert—

“First-time residential purchase exceeding the property price cap

6A

(1)

This paragraph applies to a withdrawal which would fall within paragraph 6 but for the fact that the requirement in paragraph 6(3) is not met.

(2)

A withdrawal to which this paragraph applies is to be treated as if it were a first-time residential purchase falling under paragraph 6 for the purposes of—

(a)

regulation 5D(2)(a)(ib),

(b)

regulation 10A(4)(b), and

(c)

paragraphs 7 to 10.”.

After paragraph 10 (purchase failure) insert—

“Failed purchase of property exceeding the property price cap

10A

(1)

This paragraph applies in respect of a withdrawal where—

(a)

a withdrawal to which paragraph 6A applies has been made,

(b)

the account manager has deducted a withdrawal charge in respect of that withdrawal,

(c)

the purchase fails to complete in circumstances falling within paragraph 9(2)(b), and

(d)

the withdrawal is returned to the account manager in accordance with paragraph 10(1).

(2)

Where this paragraph applies—

(a)

the withdrawal is to be treated as a withdrawal to which paragraph 8 of Schedule 1 does not apply, and

(b)

the account manager must restore an amount equal to the withdrawal charge deducted in respect of the withdrawal to the account investor’s Lifetime ISA.”.

In paragraph 13 (withdrawals: information returns), after sub-paragraph (3) insert—

“(3A)

Where paragraph 10A applies, the account manager must—

(a)

if no return relating to the withdrawal charge has been made under sub-paragraph (1), take account of the application of paragraph 10A in the return, or

(b)

if such a return has been made, correct the return without delay.”.

In paragraph 14 (payment to the Board of withdrawal charges), after sub-paragraph (1) insert—

“(1A)

The amount payable by the account manager under sub-paragraph (1) is reduced by an amount equal to the withdrawal charge deducted in respect of the withdrawal where—

(a)

paragraph 10A applies, and

(b)

the account manager has not paid the withdrawal charge to the Board.

(1B)

The Board must repay the account manager an amount equal to the withdrawal charge deducted in respect of the withdrawal where—

(a)

paragraph 10A applies, and

(b)

the account manager has paid the withdrawal charge to the Board.”.