The Individual Savings Account Regulations 1998

• (iii) ... the Director of Savings, a building society or a person falling within section 991(2)(b) or (c) or (3)(c) of ITA 2007 (bank or credit union); or

• (iv) ... an insurance company, within the meaning given by section 431(2) of the Taxes Act , an incorporated friendly society, or a registered friendly society; or

• (v) any assurance undertaking which does not fall within paragraph (iv) above;

• (c) an account manager must not be prevented from acting as such by any requirement imposed under Part 4A of FISMA 2000, or by any prohibition imposed by or under any rules made by the Financial Conduct Authority or the Prudential Regulation Authority under that Act; and

• (d) an account manager who—

• (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ii) falls within sub-paragraph (b)(v),

must fulfil one of the three requirements specified in regulation 16.

• (3) The terms of the Board’s approval may—

• (a) approve a person to set up and administer cash accounts only, or stocks and shares accounts only, or innovative finance accounts only, or Lifetime ISAs only, or any combination of such accounts, and

• (b) include conditions designed to ensure that the provisions of these Regulations are satisfied.

Special requirements relating to insurer-managers

15

If and so long as a person falling within regulation 14(2)(b)(iv) or (v) acts as account manager of an account, and the account investments include a policy of life insurance—

• (a) the title to all such policies shall be vested in the account investor; and

• (b) where a policy document or other document evidencing title to such policies of life insurance is issued, it shall be held by the account investor.

Account manager—appointment of tax representative

16

• (1) This regulation specifies the requirements mentioned in regulation 14(2)(d).

• (2) The first requirement specified in this regulation is that—

• (a) a person who falls within section 698(2)(b) of ITTOIA 2005 is for the time being appointed by the account manager to be responsible for securing the discharge of the duties prescribed by paragraph (5) which fall to be discharged by the account manager, and

• (b) his identity and the fact of his appointment have been notified to the Board by the account manager.

• (3) The second requirement specified in this regulation is that there are for the time being other arrangements with the Board for a person other than the account manager to secure the discharge of such duties.

• (4) The third requirement specified in this regulation is that there are for the time being other arrangements with the Board designed to secure the discharge of such duties.

• (5) The duties prescribed by this paragraph are those that fall to be discharged by an account manager under these Regulations.

• (6) The appointment of a person in pursuance of the first requirement shall be treated as terminated in circumstances where—

• (a) the Board have reason to believe that the person concerned—

• (i) has failed to secure the discharge of any of the duties prescribed by paragraph (5), or

• (ii) does not have adequate resources to discharge those duties, and

• (b) the Board have notified the account manager and that person that they propose to treat his appointment as having terminated with effect from the date specified in the notice.

• (7) Where, in accordance with the first requirement, a person is at any time responsible for securing the discharge of duties, the person concerned—

• (a) shall be entitled to act on the account manager’s behalf for any of the purposes of the provisions relating to the duties;

• (b) shall secure (where appropriate by acting on the account manager’s behalf) the account manager’s compliance with and discharge of the duties; and

• (c) shall be personally liable in respect of any failure of the account manager to comply with or discharge any such duty as if the duties imposed on the account manager were imposed jointly and severally on the account manager and the person concerned.

Account manager—withdrawal by Board of approval

17

• (1) This regulation specifies the circumstances (“the disqualifying circumstances") in which the Board may by notice withdraw their approval of a person as an account manager in relation to an account which is not a junior ISA account.

• (2) The disqualifying circumstances to which paragraph (1) refers are that the Board have reason to believe—

• (a) that any provision of these Regulations is not or at any time has not been satisfied in respect of an account managed by the account manager; ...

• (b) that a person to whom they have given approval to act as an account manager is not qualified so to act ; 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.

• (3) The notice to which paragraph (1) refers—

• (a) may withdraw an approval in part, that is, in respect of particular types of accounts specified in the notice;

• (b) shall specify the date from which the Board’s approval is withdrawn; ...

• (c) shall specify the disqualifying circumstances ; and

• (d) may specify that, from the date of the notice, the account manager—

• (i) must not accept any subscriptions or open new accounts, or

• (ii) must not accept any subscriptions or open new accounts except to the extent specified in the notice.

• (4) On receiving the notice referred to in paragraph (1), subject to any appeal in accordance with regulation 18, the account manager shall notify the person who is the account investor in relation to the account held with the account manager of the right to transfer the account under regulation 21 ..., and the provision made by regulation 20(4).

• (5) Where the account manager does not intend to make a bulk transfer of accounts, the account manager must, in addition to notifying the account investor in accordance with paragraph (4), notify the account investor of that intention and draw to the account investor’s attention the fact the account will cease to be exempt from tax unless it is transferred as specified in regulation 20(4).

• (6) The account manager must comply with paragraph (5) within the period beginning with the date of the Board’s notice under paragraph (1) and ending with the date which is 15 days before the date on which the Board’s approval is withdrawn.

• (7) Where a notice under paragraph (1) makes a specification under paragraph (3)(d)(i), from the date of the notice the account manager must not accept any subscriptions or open any new accounts.

• (8) Where a notice under paragraph (1) makes a specification under paragraph (3)(d)(ii), from the date of the notice the account manager must not accept any subscriptions or open any new accounts except to the extent specified in the notice.

Account manager—appeal against withdrawal of Board’s approval

18

• (1) An account manager to whom notice of withdrawal of approval has been given under regulation 17 or 17A may appeal against the withdrawal by notice given to the Board within 30 days after the date of the notice of withdrawal.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The like provisions as are contained in Part V of the Management Act (appeals and other proceedings) shall apply to an appeal and the tribunal, on an appeal notified to it, shall confirm the notice unless ... satisfied that the notice ought to be quashed.

Account manager ceasing to act

19

• (1) An account manager must give notice to the Board if the account manager—

• (a) intends to cease to act as an account manager; or

• (b) intends to make a bulk transfer of accounts.

• (2) An account manager must give notice to a person who is the account investor in relation to an account held with the account manager if the account manager—

• (a) intends to cease to act as an account manager; or

• (b) intends that the account will be one of the accounts transferred in a bulk transfer of accounts.

• (3) The notices described in paragraphs (1) and (2) must—

• (a) specify whether the account manager—

• (i) intends to cease to act as an account manager; or

• (ii) intends to make a bulk transfer of accounts;

• (b) where the notice specifies an intention to cease to act as an account manager,—

• (i) specify the day on or after which the account manager intends to cease to act as an account manager; and

• (ii) be given no less than 30 days before that day;

• (c) where the notice specifies an intention to make a bulk transfer of accounts,—

• (i) specify the day on or after which the account manager intends to make the first transfer in the bulk transfer of accounts;

• (ii) be given no less than 30 days before that day; and

• (iii) advise the name and address of the person to whom the account manager intends to transfer accounts.

• (4) The notice described in paragraph (2) must also—

• (a) identify the account to which it relates;

• (b) advise the account investor that the account may be transferred in accordance with regulation 21 or 21B otherwise than in a bulk transfer of accounts if sufficient instructions are provided to enable the account manager to do so;

• (c) advise the day by which the account manager must receive sufficient instructions for the account to be transferred otherwise than in a bulk transfer of accounts.

• (d) where the account is not a junior ISA account, include a statement that, unless the account is transferred in accordance with these Regulations, it will cease to be exempt from tax.

• (5) Where an account manager intends to make a bulk transfer of accounts in consequence of an intention to cease to act as an account manager, such intention may be specified in the same notice to the Board or an account investor (as appropriate) provided the requirements of paragraphs (3) and (4) are met.

• (6) Paragraph (7) applies in relation to an account manager of a junior ISA account who has given a notice referred to in paragraph (1).

• (7) An account manager must not cease to act as an account manager in relation to a junior ISA account until that junior ISA account has been transferred to another account manager in accordance with paragraph (8) or (8H) of regulation 21B.

• (8) Where the account manager does not intend to make a bulk transfer of accounts, the account manager must notify the account investor of that intention and draw their attention to the provisions in regulation 20(3).

Account manager ceasing to qualify

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• (1) A person shall cease to qualify as an account manager and shall notify the Board within 30 days of the relevant event in sub-paragraphs (a) to (e), of that relevant event, where—

• (a) the person no longer fulfils the conditions of regulation 14;

• (b) there is an insolvency event in relation to the account manager;

• (ba) a debt relief order is made in respect of the person (under Part 7A of the Insolvency Act 1986) or;

• (c) an application has been made for a bank insolvency order or a bank administration order;

• (d) in the case of a building society, a person falling within section 991 of ITA 2007 or a credit union—

• (i) it ceases to be a building society or to fall within section 991 of ITA 2007 or to be a credit union, as the case may be;

• (ii) its directors have made a proposal under Part 1 of the Insolvency Act 1986 for a composition in satisfaction of its debts or a scheme of arrangement of its affairs; or

• (iii) a receiver or manager of its property has been appointed; or

• (e) in the case of a European institution, a relevant authorised person or an assurance undertaking which falls within regulation 14(2)(b)(iv) and (v), action corresponding to any described in sub-paragraphs (b) to (d) has been taken by or in relation to the institution, person or undertaking under the law of an EEA State.

• (2) On giving the notice referred to in paragraph (1), the person shall also notify the account investor of his right to transfer the account under regulation 21 or 21B (as appropriate), and the notice shall inform the account investor of his rights under paragraph (3).

• (3) Where the account investor—

• (a) receives a notice under paragraph (2), or regulation ...19, and

• (b) within 30 days of the sending of the notice to him, transfers the account to another account manager pursuant to regulation 21 or 21B (as appropriate),

the period between the transferor ceasing to act or to qualify as an account manager, and the transfer to the transferee, shall be ignored in determining whether the account has at all times been managed by an account manager.

• (4) Where an account investor—

• (a) receives a notice under regulation 17(4), and

• (b) within the period of 30 days beginning with the date from which the Board’s approval is withdrawn transfers the account to another manager pursuant to regulation 21 or 21B (as appropriate),

the period between the date from which the approval is withdrawn and the transfer to the transferee shall be ignored for the purposes of determining whether the account has at all times been managed by an account manager.

• (5) Paragraph (6) applies in relation to an account manager of a junior ISA whohas sent a notice referred to in paragraph (1).

• (6) An account manager must not cease to act as an account manager in relation to a junior ISA account until that account has been transferred to another account manager in accordance with paragraph (8) or (8H) of regulation 21B.

Transfer of accounts to other account managers

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• (1) In this regulation, in relation to a transfer of an account that is not a junior ISA account—

• “the current year’s subscriptions” means—subscriptions made to the account by the account investor in the year in which the transfer takes place, but before the transfer,subscriptions made to any other account by the account investor in the year in which the transfer takes place and transferred to the account before the transfer, andthe qualifying investments and other proceeds (including income and any government bonus) representing the subscriptions in sub-paragraphs (a) and (b) of this definition;

• “the previous years’ subscriptions” means—subscriptions made to the account (or any other account or former personal equity plan) in any earlier year or years, andthe qualifying investments and other proceeds (including income and any government bonus) representing those subscriptions.

• “subscriptions” includes all payments made into a Lifetime ISA.

• (2) Any transfer relating to an account or part of an account shall be made—

• (a) directly between one account manager (“the transferor”) and another account manager (“the transferee”), or

• (b) where the same person is account manager before and after the transfer, solely by that manager (who shall maintain the records of both transferor and transferee required by this regulation).

• (3) The current year’s subscriptions and the previous years’ subscriptions may be transferred in whole or in part.

• (4) ... The current year’s subscriptions and the previous years’ subscriptions may only be transferred to—

• (a) a stocks and shares account (if the account investor is 18 years of age or over), ...

• (b) a cash account, ...

• (c) an innovative finance account (if the account investor is 18 years of age or over),, or

• (d) a Lifetime ISA (if the account investor is 18 or over),

belonging to the same account investor.

• (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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.

• (4C) Where the current year’s subscriptions (with or without other subscriptions) are transferred from—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) a Lifetime ISA to a Lifetime ISA,

the subscriptions transferred, and no other subscriptions, shall be treated as the same account, for the purpose of making any remaining permitted subscriptions or qualifying additions in that year.

• (4CA) Regulations 12(1) and 12B(1) do not prevent the current year’s subscriptions and the previous years’ subscriptions being transferred to an account that was held immediately before the transfer but to which no subscription has been made in the year in which the transfer occurs or the year immediately before that year.

• (4D) The account investor shall, subject to paragraph (4DA), make a fresh application under regulation 12 or 12B, as the case may be, (with any necessary modifications to reflect that it is made on a transfer) to the transferee.

• (4DA) Paragraph (4D) does not apply where—

• (a) an account is transferred in a bulk transfer of accounts;

• (b) a cash account (whether or not in a bulk transfer of accounts) is transferred to a cash account held with the transferee immediately before the time when the transfer is made;

• (c) a stocks and shares account (whether or not in a bulk transfer of accounts) is transferred to a stocks and shares account held with the transferee immediately before the time when the transfer is made; ...

• (ca) an innovative finance account (whether or not in a bulk transfer of accounts) is transferred to an innovative finance account held with the transferee immediately before the time when the transfer is made;

• (cb) a Lifetime ISA (whether or not in a bulk transfer of accounts) is transferred to a Lifetime ISA held with the transferee immediately before the time when the transfer is made;

• (d) a cash account is transferred (otherwise than in a bulk transfer of accounts) to a Lifetime ISA, a stocks and shares account or an innovative finance account held with the transferee immediately before the time when the transfer is made, ...

• (e) a stocks and shares account is transferred (otherwise than in a bulk transfer of accounts) to a Lifetime ISA, a cash account or an innovative finance account held with the transferee immediately before the time when the transfer is made ...; or

• (f) an innovative finance account is transferred (otherwise than in a bulk transfer of accounts) to a Lifetime ISA, a cash account or a stocks and shares account held with the transferee immediately before the time when the transfer is made.

• (4DB) Where an account is transferred in a bulk transfer of accounts that is not also a transfer described in paragraph (4DA)(b), (c), or (ca), a subscription to the account after the transfer may only be made if—

• (a) the subscription is made after the account investor has, during the period of time determined in accordance with paragraph (4DC), made an application to the transferee in relation to the account in accordance with regulation 12 (with any necessary modifications where appropriate to reflect that the account has been transferred in a bulk transfer of accounts);

• (b) the subscription is made in the year immediately following a year in which a subscription has been made to the account other than a subscription permitted by virtue of paragraph (4DE); or

• (c) the subscription is permitted by virtue of paragraph (4DE).

This paragraph does not apply to a Lifetime ISA.

• (4DC) The period of time referred to in paragraph (4DB)(a) is the period—

• (a) starting at the beginning of the year immediately preceding the year in which the subscription is made, and

• (b) ending immediately before the subscription is made.

• (4DCA) In the case of a Lifetime ISA, where the account is transferred in a bulk transfer of accounts which is not a transfer described in paragraph (4DA)(cb) a payment by the account investor to the account after the transfer may only be made (unless permitted by paragraph (4DE)) after the account investor has made an application to the transferee in relation to the account in accordance with regulation 12B (with any necessary modifications where appropriate to reflect the fact that the account has been transferred in a bulk transfer of accounts).

• (4DD) For the purposes of paragraphs (4DB) and (4DE), the current year’s subscriptions and the previous years’ subscriptions transferred are not subscriptions to the account.

• (4DE) A subscription to an account is permitted by this paragraph if—

• (a) the account has been transferred to the transferee in a bulk transfer of accounts pursuant to a scheme described in regulation 2(1A)(a)(ii) or in a group transfer of accounts;

• (b) the most recent application in accordance with regulation 12 or 12B relating to the transferred account made before its transfer is available to the transferee; and

• (c) except in relation to a Lifetime ISA, the subscription is made—

• (i) in the year in which the account is transferred (provided a subscription has been made to the account in that year before the account was transferred); or

• (ii) in a year immediately following a year in which a subscription has been made to the transferred account (including a subscription made before the transfer).

• (4DF) For the purposes of paragraph (4DE)(b), an application in accordance with regulation 12 or 12B as described in that paragraph is available to a transferee if—

• (a) paragraph (4DG) or (4DH) applies; and

• (b) except in relation to a Lifetime ISA, the transferor has advised the transferee whether a subscription has been made to the transferred account in the year immediately preceding the year in which the transfer takes place.

• (4DG) This paragraph applies where the application described in paragraph (4DE)(b) (or a copy of it) is held by the transferee.

• (4DH) This paragraph applies where—

• (a) the application described in paragraph (4DE)(b) (or a copy of it) is held by the transferor; and

• (b) the transferee can require the transferor to make it available to the transferee for any purpose necessary to ensure the transferee’s compliance with these regulations.

• (4DI) An account transferred in accordance with this regulation in a bulk transfer of accounts is an account opened in accordance with regulation 12 or 12B for the purposes of these Regulations whether or not an application in accordance with regulation 12 or 12B as described in paragraph (4DB)(a) or (4DCA), as the case requires, is made.

• (4E) This regulation shall also apply where an account is transferred in consequence of an account manager (“the transferor”) ceasing to act or to qualify as an account manager.

• (5) Where an account is transferred, the transferor must, subject to paragraph (5B), give to the transferee a notice containing the information specified in paragraph (6) before the relevant time specified in paragraph (5A).

• (5A) The relevant time specified in this paragraph is—

• (a) in the case of an account transferred in a bulk transfer of accounts, the time of the transfer;

• (b) in any other case, the expiry of 30 days after the day of the transfer.

• (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).

• (6) The information specified in this paragraph is—

• (a) as regards the account investor—

• (i) his full name,

• (ii) the address of his permanent residence, including postcode,

• (iii) his date of birth, and

• (iv) if he has one, his national insurance number, and

• (b) subject to paragraph (6ZA), as regards an account or any part of an account transferred pursuant to paragraph (2)—

• (i) whether the account is a cash account, stocks and shares account, an innovative finance account or a Lifetime ISA,

• (ia) whether the account is a continuing account of a deceased investor;

• (ii) the date of the transfer,

• (iii) the total amount of cash subscribed to the account during the period from the beginning of the year in which the transfer takes place to the date of the transfer... , disregarding a subscription made in accordance with regulation 5D (except for a replacement subscription), less, in the case of a flexible account, the amount of any cash withdrawn from it during that period and if the result is in the negative, the amount to be reported is nil,

• (iv) the date on which the first subscription (if any) was made to the account, in the year in which the transfer takes place, and

• (v) the amount of any dividends on account investments which are payable to, but have not been received by, the transferor at the date of the transfer.

• (vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .and

• (d) as regards an account or any part of an account transferred pursuant to paragraph (2) which is a Lifetime ISA—

• (i) the date on which that Lifetime ISA was first opened and for the purposes of a payment made in accordance with regulation 5D(2)(a)(ia) or (ib), a Lifetime ISA opened for the purpose of receiving the payment is to be treated as being the same Lifetime ISA from which the money the subject of the payment originated;

• (ii) the date of the first qualifying addition to the account in the year of transfer;

• (iii) the amount of any government bonus that has accrued, but not been claimed, at the date of the transfer,

• (iv) the number allocated to the account by the transferor;

• (v) any government bonus already paid within the current year;

• (vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (vii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (viii) confirmation of whether or not there has been a withdrawal for a first-time residential purchase, for which information required under paragraph 9 of the Schedule and expected by the transferor has not been received;

• (ix) if there has been such a withdrawal, an undertaking to pass on to the transferee any such information received without delay.

• (6ZA) But there is no obligation to provide the information specified in paragraph (6)(b)(iii) or (iv) where, in relation to an account—

• (a) there is a transfer in part of the current year’s subscriptions, and

• (b) a current year’s subscription remain with the transferor after the transfer.

• (6A) Where a Lifetime ISA is transferred, the transferee must before the time of the transfer give to the transferor a notice stating whether or not the account to which the investments are being transferred is a Lifetime ISA.

• (6B) A Lifetime ISA of an account investor to which another Lifetime ISA of the account investor (“the original”) is transferred in accordance with this regulation is a successor to the original.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption from tax of account income and gains

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• (1) Subject to these Regulations—

• (a) no tax shall be chargeable on the account manager or his nominee or on the account investor—

• (i) in respect of interest, dividends, distributions or gains in respect of account investments (including any government bonus, but excluding any building society bonus), or

• (ia) in respect of alternative finance return paid by a financial institution in accordance with Part 10A of ITA 2007, or

• (ib) in respect of a payment under a building society bonus scheme, so far as the payment is calculated by reference to account investments (and if paid directly by the society into the account, the payment shall not count towards the subscription limit in regulations 4ZA(1) and 4ZB(1)); or

• (ii) on any annual profits or gains treated under Part 12 of ITA 2007 (accrued income profits) as having been received by any of them in respect of account investments, or

• (iii) on an offshore income gain to which a disposal by any of them of an account investment would otherwise give rise to a charge to tax under regulation 17 of the Offshore Funds (Tax) Regulations 2009, or

• (iv) on a profit on the disposal of a deeply discounted security within the meaning given by section 430 of ITTOIA 2005, or

• (v) in respect of gains treated under Chapter 9 of Part 4 of ITTOIA 2005 as arising in connection with a policy of life insurance which is an account investment...;

• (b) losses in respect of account investments shall be disregarded for the purposes of capital gains tax;

• (ba) any gain or loss accruing on and attributable to a payment within paragraph (ib) of sub-paragraph (a) shall not be a chargeable gain or allowable loss for capital gains tax purposes;

• (c) a deficiency arising in a tax year and falling within section 539(1) of ITTOIA 2005, so far as it relates to an account investment, shall not be allowable as a deduction from the total income of the account investor;

• (d) relief in respect of tax shall be given in the manner and to the extent provided by these Regulations; ...

• (e) in relation to an account that is not a junior ISA account, interest on a cash deposit which is an account investment held under a cash component shall not, except for the purposes of section 629 of ITTOIA 2005, be regarded as income for any income tax purposes;

• (f) in relation to a junior ISA account, income arising from account investments shall not be regarded as income for any income tax purposes (including section 629 of ITTOIA 2005)

• (2) An account investor who, after the opening of an account, at any time ceases to be resident in the United Kingdom, shall be treated as if he were resident in the United Kingdom for the purposes of determining his entitlement to, or to payment of, tax credits in respect of qualifying distributions, so far as they relate to account investments under an account held by him.

• (3) A reference to “interest” in this regulation includes a reference to any bonus and to a dividend paid or credited in respect of a share account with a building society.

Interest on cash deposits held under a stocks and shares component or insurance component

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax liabilities and reliefs—account manager to act on behalf of account investor

24

• (1) An account manager may under these Regulations make claims, conduct appeals and agree on behalf of the account investor liabilities for and reliefs from tax in respect of an account.

• (2) Claims shall be made to the Board in accordance with the provisions of regulations 25 and 26.

• (3) Where any relief or exemption from tax previously given in respect of an account has by virtue of these Regulations become excessive, in computing the relief due on any claim there shall be deducted (so that amounts equal to that excess are set-off or repaid to the Board, as the case may be) notwithstanding that those amounts have been invested—

• (a) any amount repaid in respect of income tax or paid in respect of a tax credit; and

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) any other amount due to the Board by an account manager in respect of any tax liability in respect of account investments under an account including (but without prejudice to the making of an assessment under the provisions of that Schedule) any amount falling due in respect of a liability under Chapter 9 of Part 15 of ITA 2007.

• (4) Any amount deducted under paragraph (3) shall be treated as an amount of income tax deducted at source and not repayable within the meaning and for the purposes of section 95(2)(a) of the Management Act .

Repayments in respect of tax to account manager—interim claims

25

• (1) Notwithstanding the provisions of any other enactment, the Board shall not be under an obligation to make any repayment in respect of tax under these Regulations earlier than the end of the month following the month in which the claim for the repayment is received.

• (2) A claim for repayment in respect of tax which is not an annual claim (“interim claim") may be made only for a period of a month (or a number of months not exceeding six) beginning on the 6th day of the month and ending on the 5th day of the relevant following month.

• (3) No claim for repayment may be made for the month ending 5th October or any subsequent month until the annual return under regulation 26(2) due in respect of an account for the preceding year has been duly made by the account manager and received by the Board.

• (4) Where, on the occasion of a claim, there is due to the Board an amount in respect of tax, that amount shall be recoverable by the Board in the same manner as tax charged by an assessment on the account manager which has become final and conclusive.

• (5) This regulation and regulation 26 shall not apply to any repayment in respect of tax on policies of life insurance falling within regulation 9, or on distributions and other rights or proceeds in respect of such policies except in so far as a return is required in respect of any gain treated as arising in accordance with regulation 36(3)(a) or (b).

Repayments in respect of tax to account manager—annual returns and annual claims

26

• (1) An annual claim is a claim for repayment in respect of tax for a year and may not be made at any time more than six years after the end of the year.

• (2) An account manager shall within six months after the end of the year make a return of all income ... and any gain treated as arising in accordance with regulation 36(3)(a) or (b), and in addition an annual claim to establish the total of repayments due under an account for that year ...

• (3) Where the aggregate of the repayments in respect of interim claims for the year shown by an annual claim exceeds the amount repayable for the year shown on the claim, the account manager shall repay the amount of the excess to the Board with the claim.

• (4) If an account manager fails to make the return and the annual claim required under this regulation within the time limited, the Board may issue a notice to the account manager showing the aggregate of payments in respect of the interim claims for the year, and stating that the Board are not satisfied that the amount due to the account manager for that year exceeds the lower amount stated in the notice.

• (5) If a return and an annual claim are not delivered to the Board within 14 days after the issue of such a notice under paragraph (4) the amount of the difference between the aggregate and the lower amount stated in the notice shall immediately be recoverable by the Board in the same manner as tax charged by an assessment on the account manager which has become final and conclusive.

• (6) Where a return and an annual claim have been made and the account manager subsequently discovers that an error or mistake has been made in the return or claim the account manager may make a supplementary return or annual claim within the time allowed in paragraph (1).

Account manager’s returns and claims—supplementary provisions

27

• (1) Section 42 of the Management Act shall not apply to claims under these Regulations.

• (2) No appeal shall lie from the Board’s decision on an interim claim.

• (3) An appeal ... from the Board’s decision on an annual claim ... shall be brought by giving notice to the Board within 30 days of receipt of notice of the decision.

• (4) No payment or repayment made or other thing done on or in relation to an interim claim or a notice under regulation 26(4) shall prejudice the decision on an annual claim.

• (5) The like provisions as are contained in Part V of the Management Act (appeals and other proceedings) shall apply to an appeal under paragraph (3) above, and on an appeal that is notified to the tribunal, the tribunal may vary the decision appealed against whether or not the variation is to the advantage of the appellant.

• (6) All such assessments, payments and repayments shall be made as are necessary to give effect to the Board’s decision on an annual claim or to any variation of that decision on appeal.

• (7) Returns and claims under these Regulations shall be in such form and contain such particulars as the Board prescribe and, subject to regulation 31(1) and (2), shall be signed by the account manager, and forms prescribed for annual claims may require a report to be given by a person qualified for appointment as auditor of a company.

Assessments for withdrawing relief and recovering tax

28

• (1) Where—

• (a) any relief or exemption from tax given in respect of income or gains under an account is found not to be due or to be excessive, or

• (b) the full amount of tax in respect of the income or gains under an account has not otherwise been fully accounted for and paid to the Board by or on behalf of the account investor,

an assessment to tax may be made by the Board in the amount or further amount which in their opinion ought to be charged.

• (2) An assessment to which paragraph (1) refers may be made on the account manager or on the account investor.

• (3) If the assessment is made to recover tax in respect of income (including any amount in respect of a tax credit) under an account it shall be made under Chapter 8 of Part 5 of ITTOIA 2005.

Records to be kept by account manager

29

• (1) An account manager shall at all times keep sufficient records in respect of an account to enable the requirements of these Regulations to be satisfied.

• (2) Where an account is transferred by an account manager (“the transferor”) to another account manager (“the transferee”) in a group transfer of accounts, any records (or copies of records) kept by the transferor in respect of the account at the time when it is transferred shall be treated for the purposes of this regulation as kept by the transferee for so long as sub-paragraphs (a), (b) and (c) of paragraph (3) apply.

• (3) For the purposes of paragraph (2)—

• (a) this sub-paragraph applies if the records described in paragraph (2) are kept by the transferor;

• (b) this sub-paragraph applies if the transferor and transferee are members of the same group of companies; and

• (c) this sub-paragraph applies if the transferee can require the transferor to make the records available to the transferee for any purpose necessary to ensure the transferee’s compliance with these regulations.

Information to be given to account investor by account manager

30

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) An account manager who makes a payment to an account investor out of or in respect of which tax, or a sum representing tax, has been deducted shall, if the account investor so requests in writing, furnish the account investor with a statement in writing showing the gross amount of the payment, the amount deducted and the amount actually paid.

• (3) On the transfer to an account investor of an account investment, subject to regulation 9(3)(b), the account manager shall provide for the account investor details in writing of the market value on the date of transfer.

Returns of information by account manager

31

• (1) An account manager shall within 60 days after the end of each year (beginning with the year 1999—00) in which he acts as an account manager, and after ceasing to act or to qualify as an account manager, deliver to the Board a return for that year, or for the part of that year in which he so acted or qualified, which contains the information specified in paragraphs (3), (4), (5), (7), (7A) and (7B), and is accompanied by a certificate as to the contents of the return, in the form prescribed by the Board, signed by the account manager or on his behalf.

• (1A) For the purposes of a Lifetime ISA in relation to paragraphs (3) and (10), paragraph (1B) applies instead of paragraph (1).

• (1B) An account manager of a Lifetime ISA must, within 60 days after the end of each year in which the account manager acts as an account manager, and after ceasing to act or qualify as an account manager, deliver to the Board a return for the year or part of a year in which the account manager so acted or was qualified, in a form or manner prescribed by the Board, which contains the information specified in the sub-paragraphs referred to in paragraph (9).

• (1C) The Board may authorise an extension of any period of time provided for under this regulation.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The information specified in this paragraph is information relating to each account, in respect of which he acted as account manager, in the year or the part of the year for which the return is made, other than accounts transferred to another account manager under Regulation 21(2) in that year or part of a year, as to—

• (a) as regards the account investor—

• (i) his full name,

• (ii) the address of his permanent residence, including postcode,

• (iii) his date of birth, and

• (iv) if he has one, his national insurance number (otherwise, any unique reference number he may have had as mentioned in the Child Trust Funds Regulations 2004);

• (b) as regards each such account—

• (i) the number allocated to the account by the account manager, and

• (ii) in relation to a cash account or stocks and shares account, the market value of the account investments held under the component of the account, ...the value of each account investment being determined either as at 5th April in that year, or any other valuation date in that year, not falling earlier than 5th October, and

• (c) as regards each such account ... —

• (i) whether the account is a cash account , a stocks and shares account or an innovative finance account,

• (ia) whether the account was a junior ISA account at any time in the year or part of the year for which the return is made,

• (ib) whether the account is a flexible account,

• (ii) subject to paragraphs (3A) and (3AB)(a), the total amount, disregarding a subscription made in accordance with regulation 5D, subscribed to the account, in the year or the part of the year for which the return is made;

• (iia) in place of the provision in paragraph (ii) in the case of a flexible account, in the year or part of the year for which the return is made, disregarding a subscription made in accordance with regulation 5D (except for a replacement subscription), the total amount subscribed to the account less the amount of any cash withdrawn from it and if the result is in the negative, the amount to be reported is nil,

• (iii) subject to paragraphs (3AB)(b) and (3B), the date on which the first subscription, if any, (being either cash ... or shares pursuant to regulation 7(2)(h)) was made to the account, in the year or the part of the year for which the return is made, ...

• (iv) the aggregate market value at the date of transfer of any shares transferred to the account manager or his nominee in accordance with regulation 7(2)(h) in the year or the part of the year for which the return is made ... and

• (v) subject to paragraph (3C), the date when any such cash account was closed, where that occurred during the year or the part of the year for which the return was made....

• (vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ; and

• (d) in relation to an innovative finance account comprising investments of the kind specified in regulation 8A(2)(a), (ca) or (cb) , the aggregate of the amounts set out at sub-paragraphs (i) to (ii)—

• (i) for investments of the kind specified in regulation 8A(2)(a) or (ca), the outstanding principal balance as at 5th April in that year, or the date on which an account manager ceases to act or qualify as an account manager, under those qualifying investments for an innovative finance component in respect of which payments are due to be made; ...

• (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

• (ii) the amount of cash held in the account as at 5th April in that year, or the date on which an account manager ceases to act or qualify as an account manager; ...

• (3A) Where a subscription is made to an account that ceases to be a junior ISA account in the year or part of the year for which the return is made, the return must show, as separate amounts, the total amount of cash subscribed to the account at times—

• (a) when the account is a junior ISA account; and

• (b) when the account is not a junior ISA account.

• (3AB) Where a defaulted cash account subscription in accordance with regulation 5D (subscriptions disregarded for the purposes of the subscription limits in regulations 4ZA and 4ZB) is made to an account in the year or part of the year for which a return required by this regulation is made—

• (a) the amount of subscriptions reported to an account manager in accordance with regulation 5DF(1)(a)(ii) (current year’s subscriptions made to the defaulted cash account) must be included as part of the total amount of cash subscribed to the account required by paragraph (3)(c)(ii);

• (b) paragraph (3)(c)(iii) must be construed as requiring (in addition to the information specified in that paragraph) the date reported to the account manager in accordance with regulation 5DF(1)(a)(iii).

• (3B) In relation to an account that is a junior ISA account, the information described in paragraph (3)(c)(iii) shall only be provided in the return for the year or part of the year in which the application to open the account in accordance with regulation 12A is made.

• (3C) The information provided in accordance with paragraph (3)(c)(v) must not include information relating to an account that was a junior ISA account immediately before it was closed.

• (4) Subject to paragraph (5), the information specified in this paragraph is—

• (a) the respective market values at the end of the year or the part of the year for which the return is made of account investments held under stocks and shares components, by him or a nominee for him on behalf of account investors, under all the accounts in respect of which he acted as account manager in that year or part, with separate values for—

• (i) shares, not being shares in an investment trust or in a UK UCITS, recognised UCITS or non-UCITS retail scheme, officially listed on a recognised stock exchange;

• (ia) such shares admitted to trading on a recognised stock exchange in the United Kingdom or an EEA State,

• (ii) qualifying securities listed on the official list of a recognised stock exchange,

• (iiaa) qualifying securities admitted to trading on a recognised stock exchange in the United Kingdom or an EEA State,

• (iia) government securities falling within regulation 7(2)(c), (ca) or (cb);

• (iii) shares in investment trusts,

• (iv) units in an authorised unit trust,

• (v) units in, or shares of, a recognised UCITS, or non-UCITS retail scheme (constituted outside the United Kingdom),

• (vi) shares in an open-ended investment company,

• (via) the surrender value of life insurance policies...,

• (vii) cash, including cash represented in share accounts with building societies,

with depositary interests being included in the paragraph to which their relevant investments (referred to in paragraphs (a) and (b) of the definition of “depositary interest”) relate;

• (aa) the information specified in sub-paragraph (a) in respect of any such account investments (excluding cash (including cash represented in share accounts with building societies)) that are held under Lifetime ISA components;

• (b) the respective market values at the end of the year or the part of the year for which the return is made of account investments held under cash components, by him or a nominee for him on behalf of account investors, under all the accounts in respect of which he acted as account manager in that year or part, with separate values for—

• (i) cash, including cash represented in share accounts with building societies, and

• (ii) investments other than those specified in paragraph (i); and

• (ba) the information specified in sub-paragraph (b), in respect of any such account investments that are held under Lifetime ISA components;

• (c) the aggregate market value at that date of all such account investments held by him or his nominee; and

• (d) the amount at the end of the year or part of the year for which the return is made of account investments held under innovative finance components, by him or a nominee for him on behalf of account investors, under all the accounts in respect of which he acted as account manager in that year or part of a year, with separate values for—

• (i) cash, ...

• (ii) the outstanding principal balance under those article 36H agreements in respect of which payments are due to be made to the account manager, ...

• (iii) the outstanding principal balance under those investments specified in regulation 8A(2)(ca) in respect of which payments are due to be made , and

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

• (5) Paragraph (4) shall apply to policies of life insurance falling within regulation 9 with the omission of the words “by him or a nominee for him on behalf of account investors," with references to the market value of account investments, in the case of policies of life insurance, being replaced with references to the surrender value of such policies, and as if separate valuations were required of such policies....

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) The information specified in this paragraph is information relating to all accounts to which subscriptions were made in the year or part of the year, in respect of which he was acting as account manager immediately before the end of the year or part of the year for which the return is made, or in the case of an account that was closed during the year, in respect of which he was acting as manager at the date the account was closed, as to—

• (a) the total number of accounts to which subscriptions were made, with separate figures for—

• (i) cash accounts holding policies of life insurance falling within regulation 9,

• (ii) all cash accounts,

• (iii) stocks and shares accounts holding policies of life insurance falling within regulation 9, and

• (iv) all stocks and shares accounts,

• (v) accounts receiving subscriptions made in accordance with regulation 5D(2)(a)(iv); and

• (vi) all innovative finance accounts; and

• (b) the total amount of ... subscriptions made in the year or part of the year, disregarding a subscription made in accordance with regulation 5D, —

• (i) to stocks and shares components of accounts;

• (ii) to cash components of accounts; ...

• (iia) in respect of subscriptions made in accordance with regulation 5(D)(2)(a)(iv);

• (iib) to innovative finance components of accounts;

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iii) invested in policies (within the meaning in regulation 9(1)) under stocks and shares components; and

• (iv) invested in policies (within that meaning) under cash components.

In relation to this paragraph (7), in the case of a flexible account, in the year or part of the year for which the return is made, there is to be disregarded, in respect of each account, a subscription made in accordance with regulation 5D (except for a replacement subscription) and there is to be deducted from the total amount subscribed the amount of any cash withdrawn from the account and if the result is in the negative, the amount to be reported is nil.

• (7A) The information specified in this paragraph is information relating to all accounts in respect of which the account manager was acting as account manager immediately before the end of the year or part of the year for which the return is made that were junior ISA accounts at the end of the period covered by the return (whether or not a subscription was made to the account during that period) with separate figures for cash accounts and stocks and shares accounts.

• (7B) The information specified in this paragraph is the total number of continuing accounts of a deceased investor.

• (8) No claim for repayment, or repayment, may be made under regulations 25 and 26 until the returns which have become due under this regulation have been duly made by the account manager and received by the Board.

• (9) Paragraphs (3) (except as provided in paragraph (10)) and (3A), (3B), (3C), (7) and (7A) do not apply to a Lifetime ISA.

• (10) The following provisions of paragraph (3) apply to a Lifetime ISA—

• (a) sub-paragraph (a) with the omission of “if he has one” and the words in parentheses;

• (b) sub-paragraph (b) with the substitution of “a Lifetime ISA” for “ a cash account or stocks and shares account”;

• (c) sub-paragraph (c)(ii) with the substitution of “paragraph (3AB)(a)” for “paragraphs (3A) and (3AB)(a)”; and

• (d) sub-paragraph (c)(iv).

Information to be provided to the Board

32

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inspection of records by officer of the Board

33

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital gains tax—adaptation of enactments

34

• (1) For the purposes of capital gains tax on the occasion when the title to account investments is transferred from an account manager to an account investor there shall be deemed to be a disposal and reacquisition by the account investor of those investments for a consideration equal to their market value at the date of the transfer.

• (2) Sections 104 to 114 of the Taxation of Chargeable Gains Act 1992 shall apply for the purposes of pooling and identifying account investments as if—

• (a) in section 106A after subsection (11) there were added—

(12) This section and sections 104, 110, 110A and 114— (a) shall apply separately in relation to any securities which are held by a person as account investments so long as they are so held, and (b) shall apply in relation to any such securities which became account investments by being transferred or renounced to an account manager or to a nominee for an account manager in the circumstances specified in regulation 7(2)(h) and (10)(a), (b) or (ba) as if they had been account investments— (i) in the case of securities acquired by that person in accordance with the provisions of a savings-related share option scheme, which were transferred in the circumstances specified in regulation 7(2)(h)(i) and (10)(a), from the date of their acquisition by him, or (ii) in the case of securities appropriated to that person in accordance with the provisions of an approved profit sharing scheme, which were transferred in the circumstances specified in regulation 7(2)(h)(ii) and (10)(b), from the date when he directed the trustees to transfer the ownership of the securities to him or, if earlier, the release date in relation to those securities, or (iii) in the case of securities which were plan shares of a Schedule 2 SIP before being transferred in the circumstances specified in regulation 7(2)(h)(iii) and (10)(ba), from the date when the securities ceased to be subject to the plan, and (c) while applying separately to any such securities, shall have effect as if that person held them in a capacity other than that in which he holds any other securities of the same class whether under another such account or otherwise. (13) In this section— (a) “account", “account investment" and “account manager" have the same meanings as in the Individual Savings Account Regulations 1998 and “regulation" means a regulation of those Regulations; (b) “approved profit sharing scheme" has the same meaning as in Chapter IV of Part V of the Taxes Act and “savings-related share option scheme" has the meaning given by paragraph 1 of Schedule 9 to that Act. (c) “Schedule 2 SIP” and “ceased to be subject to the plan” shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003); and (d) “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— (i) paragraph 87(6) of Schedule 2 to ITEPA 2003 (meaning of the word “shares” in the context of company reconstructions) shall not apply, and (ii) in paragraph 88(2) of that Schedule (treatment of shares acquired under rights issue) the words “or securities or rights” shall be treated as omitted.

; and

• (b) in section 110A after subsection (5) there were added—

(6) Where part of a section 104 holding is treated by section 106A(12)(b)(ii) as having been account investments since a particular date— (a) an operative event shall be regarded as having occurred for the purposes of this section immediately before that date, consisting of the disposal of the part of that section 104 holding which is so treated, and (b) this section shall apply in relation to the occurrence of that operative event as it would have applied if it had always applied separately in relation to the part of that section 104 holding which is so treated.

• (3) Section 106A of the Taxation of Chargeable Gains Act 1992 shall apply for the purposes of identifying securities within the meaning of that section which are eligible to become account investments as if—

• (a) in subsection (4), there were added at the beginning the words “Subject to subsection (14) below";

• (b) in subsection (6), the words “subsections (4) and (5) above" were replaced with the words “subsections (4), (5) and (14)"; and

• (c) after subsections (12) and (13), as added by paragraph (2), there were added—

(14) Where a person disposes of securities and securities of the same class which were eligible for transfer to an account under regulation 7(2)(h) were— (a) held by him immediately before that disposal, or (b) acquired by him on the same day as that disposal, or (c) acquired by him within the period of thirty days after that disposal, and those securities were acquired in the circumstances specified in that regulation, he shall be treated as having first disposed of any securities of that class held or acquired by him which were not so eligible.

• (4) Sections 127 to 131 of the Taxation of Chargeable Gains Act 1992 shall not apply in relation to qualifying investments falling within any of sub-paragraphs (a), (b), (d), (e), (f), (g) and (h) of regulation 7(2) which are held under an account if there is by virtue of any allotment for payment as is mentioned in section 126(2) of that Act a reorganisation affecting those shares or securities.

Administration of tax in relation to accounts—supplementary

35

• (1) Nothing in these Regulations shall be taken to prejudice any powers conferred or duties imposed by or under any enactment in relation to the making of returns of income or gains, or for the recovery of tax, penalties or interest by means of an assessment or otherwise.

• (2) Notwithstanding the provisions of these Regulations an account manager shall not be released from obligations under these Regulations in relation to an account except under conditions agreed in writing with and notified to that person by the Board.

• (3) The like provisions as are contained in the Management Act shall apply to any assessment under these Regulations as if it were an assessment to tax for the year in which, apart from these Regulations, the account investor would have been liable (by reason of his ownership of the investments).

• (4) In the application of the like provisions as are contained in section 86 of the Management Act by virtue of paragraph (3) in relation to any sums due and payable by virtue of an assessment made on an account manager under these Regulations, the relevant date—

• (a) is the 1st January in the year for which the account investor would have been liable where the account manager has made an interim claim for a period falling within that year; and

• (b) in any other case, is the later of the following dates, that is to say—

• (i) the 1st January in that year; or

• (ii) the date of the making of the repayment by the Board following receipt of the annual claim for that year.

• (5) The like provisions as are contained in section 97(1) of the Management Act shall apply as if—

• (a) there were inserted after the words “section 95 above" the words “or the Individual Savings Account Regulations 1998", and

• (b) there were inserted after the words “that they were" the words “or have become".

• (5A) Paragraphs (3) to (5) do not apply to an assessment made or deemed to be made under the Schedule.

• (6) If—

• (a) a chargeable event, within the meaning given by Chapter 9 of Part 4 of ITTOIA 2005, has happened in relation to a policy of life insurance which is an account investment...; and

• (b) the body by whom the policy was issued is satisfied that no gain is to be treated as chargeable to tax on the happening of the event by virtue of regulation 22(1)(a)(v),

the body shall not be obliged to deliver the certificates mentioned in section 552(1) of that Act.

This paragraph does not prevent the operation of section 552(1) in a case to which regulation 36(1) applies.

• (7) A termination of a policy of insurance pursuant to regulation 9(3)(b)(ii) shall be treated as the surrender of all rights under the policy for the purposes of section 484(1)(a)(i) of ITTOIA 2005.

• (8) Where there are in force relevant insurances within the meaning given by section 552A of the Taxes Act then, so far as they consist of policies of life insurance which are account investments..., they shall be disregarded in calculating the amount or value of gross premiums, for the purposes of subsection (4)(b) of that section.

• (9) Any form prescribed by the Board for the purposes of these Regulations shall provide for a declaration that all the particulars given in the form are correctly stated to the best of the knowledge and belief of the person concerned.

• (9A) Paragraph (9) does not apply to any form prescribed under regulation 31(1B) or the Schedule.

• (10) No obligation as to secrecy imposed by statute or otherwise shall preclude the Board from disclosing to an account manager or account investor that any provision of these Regulations has not been satisfied or that relief has been given or claimed in respect of investments under an account.

Signed

Graham Allen — Bob Ainsworth — Two of the Lords Commissioners of Her Majesty’s Treasury — 1998-07-31

Explanatory note

(This note is not part of the Regulations)

Footnotes