The Individual Savings Account Regulations 1998

Made: 31st July 1998

Laid before the House of Commons: 31st July 1998

Coming into force: In accordance with regulation 1

The Treasury, in exercise of the powers conferred on them by sections 333, 333A and 333B of the Income and Corporation Taxes Act 1988, section 151 of the Taxation of Chargeable Gains Act 1992 and sections 75 and 76(3) of the Finance Act 1998, hereby make the following Regulations:

Citation and commencement

1

These Regulations may be cited as the Individual Savings Account Regulations 1998 and shall come into force for the purposes of—

• (a) applications under regulations 12 and 13 relating to the year 1999—00, to subscribe to an account in that year,

• (b) applications under regulation 14 to be approved as an account manager to manage accounts in the year 1999—00 and subsequent years, and

• (c) regulations 16 to 18 and 20, so far as they relate to applications referred to in paragraph (b),

on 1st October 1998, and for all other purposes on 6th April 1999.

Interpretation

2

• (1) In these Regulations unless the context otherwise requires—

• (a) “account", except in the case of—

• (i) an account with a deposit-taker, or

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iii) a share or deposit account with a building society, or

• (iv) a deposit account with a person falling within section 991(2) of the Income Tax Act 2007,

shall be construed in accordance with regulation 4(1) and, where appropriate, regulation 2B(b) and shall include a personal equity plan treated on and from the 6th April 2008 as a stocks and shares account;

• an “account investment” is an investment under the account which is a qualifying investment for a stocks and shares component, a cash component, an innovative finance component or a Lifetime ISA component, as the case may be, within the meaning of regulation 7, 8, 8ZA or 8A;

• an “account investor” has the meaning given in regulation 2A;

• an “account manager" is a person who fulfils the conditions of these Regulations and is approved by the Board for the purposes of these Regulations as an account manager;

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• “approved profit sharing scheme" has the same meaning as in Chapter IV of Part V of the Taxes Act;

• “article 36H agreement” is to be construed in accordance with article 36H(4) of the Regulated Activities Order 2001 and is an agreement entered into by an account investor as lender with a borrower with the facilitation of an operator and for the purposes of regulation 8A(2) includes such an agreement notwithstanding that, after it is entered into, the operator or, in relation to a continuing account of a deceased investor, any person within the description of section 694A(2) of ITTOIA 2005 or referred to in section 694A(1) of that Act, assumes the rights of the lender under it;

• an “assurance undertaking" means a direct life insurance undertaking within the meaning of Article 2 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II);

• “bank” has the meaning given by section 991(2) to (5) of the Income Tax Act 2007;

• “the Board” means the Commissioners for Her Majesty’s Revenue and Customs;

• “borrower” is to be construed in accordance with article 36H(9) of the Regulated Activities Order 2001;

• “building society" means a building society within the meaning of the Building Societies Act 1986 , or the Irish Building Societies Act 1989 ;

• “building society bonus”, except in regulation 22(1)(a)(i), excludes any bonus, distribution of funds or the conferring of rights in relation to shares—in connection with an amalgamation, transfer of engagements or transfer of business of a building society, andmentioned in section 96 or 100 of the Building Societies Act 1986,and “payment under a building society bonus scheme” shall be construed accordingly;.

• “business day” means any day except—a Saturday, Sunday, Good Friday or Christmas Day;a bank holiday under the Banking and Financial Dealings Act 1971;

• “ceasing to be subject to the plan”, in relation to plan shares under a Schedule 2 SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003);

• “charity” has the meaning given in paragraph 1(1) of Schedule 6 to the Finance Act 2010;

• “child” means an individual under 18;

• “child trust fund” has the meaning given by section 1 of the Child Trust Funds Act 2004;

• “Child Trust Funds Regulations” means the Child Trust Funds Regulations 2004;

• “company", except in regulation 7(4), means any body corporate having a share capital other than—an open-ended investment company, within the meaning given by section 236 of the Financial Services and Markets Act 2000, or a UK UCITS, recognised UCITS or non-UCITS retail scheme ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “continuing account of a deceased investor” has the meaning given in regulation 2G;

• “credit union” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;

• “CTA 2010” means the Corporation Tax Act 2010;

• “CTF matured account” has the meaning given in regulation 5DZA;

• “current year payments” has the meaning given in regulation 10A(3);

• “debenture” includes any instrument creating or acknowledging indebtedness within the meaning of article 77(1) and (2) of the Regulated Activities Order 2001 but with the omission of the words “such of the following as do not fall within article 78;

• “deceased’s account” is an account which the deceased held with an account manager at the date of the deceased’s death;

• “deposit-taker" has the meaning given by section 853 of ITA 2007;

• “the Director of Savings” has the same meaning as in the National Debt Act 1972

• “dormant account” means an account which contains a “relevant dormant asset” within the meaning given in section 39(2) of the Finance Act 2008, omitting the words “is to be, or”;

• ...

• “EEA State” has the meaning given in Schedule 1 to the Interpretation Act 1978;

• “eligible child” means a child—born—on or after 3rd January 2011; orbefore the time mentioned in paragraph (i) but who is not an “eligible child” within the meaning given in the Child Trust Funds Act 2004; andwho, at the time when the application to open an account pursuant to a junior ISA application described in regulation 12A is made, is—resident ... in the United Kingdom;a person who has general earnings from overseas Crown employment subject to United Kingdom tax within the meaning given by section 28 of ITEPA 2003;married to, or in a civil partnership with, a person mentioned in paragraph (ii); ora dependant of a person mentioned in paragraph (ii);

• “eligible conveyancer” has the meaning given in paragraph 7 of the Schedule;

• “European institution” means a person who is treated as having permission to carry on a regulated activity in the United Kingdom under Part 4A of the Financial Services and Markets Act 2000 by virtue of regulations 8, 11, 28 or 34 of the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018;

• “51% subsidiary” and “75% subsidiary” have the same meanings as they do in section 1154 of CTA 2010;

• “first subscription”, in any year, means the first subscription into an account in that year which is not a subscription made in accordance with regulation 5D;

• “flexible account” has the meaning given in regulation 5DDB;

• “gains", except in regulations 22(1)(a)(ii) to (v) and 35(6), means “chargeable gains"within the meaning of the Taxation of Chargeable Gains Act 1992;

• “gilt-edged securities" has the meaning given by paragraphs 1 and 1A of Schedule 9 to the Taxation of Chargeable Gains Act 1992;

• “government bonus” has the meaning given in the Schedule;

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• an “incorporated friendly society" means a society incorporated under the Friendly Societies Act 1992 ;

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• “innovative finance account” has the meaning given in regulation 4(1ZA);

• “interim permission” is to be construed in accordance with Chapter 4 of Part 8 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013;

• “investment trust” means an investment trust within the meaning of section 1158 of the Corporation Tax Act 2010;

• “ITA 2007” means the Income Tax Act 2007;

• “ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;

• “ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;

• “junior ISA account” has the meaning given in regulation 2B;

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• “lender” is to be construed in accordance with article 36H(9) of the Regulated Activities Order 2001;

• “Lifetime ISA” has the meaning given in regulation 4(1ZB);

• “Lifetime ISA payment limit” has the meaning given in regulation 4ZA(1A);

• “Lifetime ISA qualifying individual” has the meaning given in regulation 10A;

• “Looked After Child” has the meaning given in regulation 2F (special provision in respect of Looked After Children);

• “the Management Act" means the Taxes Management Act 1970 ;

• “market value" shall be construed in accordance with section 272 of the Taxation of Chargeable Gains Act 1992;

• “named child” means a child who holds an account opened pursuant to a junior ISA application described in regulation 12A;

• “notice", except in regulations 9 and 36, means notice in writing and “notify" shall be construed accordingly;

• “operator” means a person who has permission (other than an interim permission) under Part 4A of FISMA 2000 to carry on the regulated activity specified in article 36H(1) of the Regulated Activities Order 2001;

• “outstanding principal balance” means, in respect of a qualifying investment for an innovative finance component, the amount in respect of the investment owing to the account investor at any time;

• “parental responsibility” means—parental responsibility within the meaning of the Children Act 1989 or the Children (Northern Ireland) Order 1995, orparental responsibilities within the meaning of the Children (Scotland) Act 1995;

• “participant”, in relation to a Schedule 2 SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003);

• “plan shares”, in relation to a Schedule 2 SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003) except that—paragraph 87(6) of Schedule 2 to ITEPA 2003 (meaning of the word “shares” in the context of company reconstructions) shall not apply, andin paragraph 88(2) of that Schedule (treatment of shares acquired under rights issue) the words “or securities or rights” shall be treated as omitted;

• “qualifying addition” has the meaning given in the Schedule;

• “qualifying distribution" has the same meaning as in section 1136 of the Corporation Tax Act 2010;

• “qualifying investments for an innovative finance component” has the meaning given in regulation 8A;

• “recognised stock exchange" has the same meaning as in section 1005 of ITA 2007 ;

• a “registered friendly society" has the meaning given by the Friendly Societies Act 1992 , and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society;

• “Regulated Activities Order 2001” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

• “release date" has the meaning given by section 187(2) of the Taxes Act ;

• “relevant authorised person" has the same meaning as in section 697(2)(b) of ITTOIA 2005;

• “replacement subscription” has the meaning given in regulation 5DDB;

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• “responsible person” means a person who is the responsible person in respect of the management of a junior ISA account in accordance with regulation 2C(4);

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• “Schedule 2 SIP” shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003);

• “Schedule 3 SAYE option scheme” shall be construed in accordance with the SAYE code (see section 516(3) of ITEPA 2003);

• “security", except in regulations 7(2)(c) to (cc) and (8)(b), 8(2)(f) and 34(3), means any loan stock or similar security of a company whether secured or unsecured, and in regulation 7(2)(cc) has the same meaning but with the omission of the words “of a company”;

• “the Stakeholder Products Regulations” means the Financial Services and Markets Act 2000 (Stakeholder Products) Regulations 2004;

• “tax" where neither income tax nor capital gains tax is specified means either of those taxes;

• “tax credit" means a tax credit under section 231 of the Taxes Act ;

• “the Taxes Act" means the Income and Corporation Taxes Act 1988;

• “transferable security” has the meaning given in section 102A(3) of FISMA 2000;

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• “year" means a year of assessment, and “the year 1999—00" means the year of assessment beginning on 6th April 1999;

• (b)

• “authorised fund” means—an authorised unit trust, oran open-ended investment company...;

• “authorised unit trust" means a unit trust scheme in the case of which an authorisation order ... under section 243 of the Financial Services and Markets Act 2000 is in force;

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• “collective investment scheme” has the meaning in section 235 of FISMA 2000;

• “COLL” means the Collective Investment Schemes Sourcebook made by the Financial Conduct Authority under FISMA 2000;

• “depositary interest” means the rights of the person mentioned in paragraph (b), under a certificate or other record (whether or not in the form of a document) acknowledging—that a person holds relevant investments or evidence of the right to them, andthat another person is entitled to rights in or in relation to those or identical relevant investments, including the right to receive such investments, or evidence of the right to them or the proceeds from such investments, from the person mentioned in paragraph (a),

• where “relevant investments” means investments which are exclusively qualifying investments for a stocks and shares component falling within any of regulation 7(2)(a) to (h), and the rights mentioned in paragraph (b) are exclusively rights in or in relation to relevant investments;

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• “FISMA 2000” means the Financial Services and Markets Act 2000;

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• “insolvency event” means the procedures listed in the definition of “insolvency event” in regulation 23(18) of the Payment Services Regulations 2017;

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• “long-term asset fund” means a scheme to which chapter 15 of COLL applies;

• “non-UCITS retail scheme”— has the meaning in COLL (that is, a scheme to which, or to whose authorised fund manager and depositary, sections 5.1, 5.4 and 5.6 of COLL apply),includes a “recognised scheme” by virtue of section 271A or ... 272 of FISMA 2000, which would fall within paragraph (a) of this definition if it were an authorised fund, andincludes a sub-fund of an umbrella which the terms of the scheme identify as a sub-fund which would fall within paragraph (a) or (b) of this definition if it were itself an authorised fund or a recognised scheme.In this definition, expressions defined in the Glossary of the Financial Conduct Authority Handbook have those defined meanings;

• “open-ended investment company” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies;

• “qualifying units in or shares of a non-UCITS retail scheme” means that—the instrument constituting the scheme secures that redemption of the units or shares in question shall take place no less frequently than bi-monthly (see Rule 6.2.16(6) of the ... COLL omitting the words “Except where (7) applies, and”, read with Rule 6.3.4(1), whether or not those Rules apply to the scheme), anda provision for suspension of dealings in exceptional conditions in accordance with Rule 7.2 of the COLL (or any foreign procedure which is a direct foreign equivalent of that Rule) shall not be treated as a provision contrary to paragraph (a) of this definition;

• “recognised UCITS” means—...an undertaking established in Gibraltar which is a UCITS under the law of Gibraltar which implemented Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities; ; or a recognised scheme by virtue of section 271A or 272 of FISMA 2000 that is a UCITS within the meaning given by section 236A of that Act;

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