The Individual Savings Account Regulations 1998

• (1) Regulations 5DJ to 5DM make special provision in respect of an investment that is a Lehman Brothers investment or a Keydata investment.

• (2) An investment is a Lehman Brothers investment if—

• (a) the investment was a qualifying investment held by an account investor in a stocks and shares account on 15th September 2008;

• (b) Lehman Brothers Holdings Inc. acted as the sole counterparty underwriting the investment on that day; and

• (c) the investment was not sold or otherwise disposed of on that day so as to cause it to cease to be a qualifying investment of the account on that day or any other day.

• (3) An investment is a Keydata investment if—

• (a) the investment was a qualifying investment held by an account investor in a stocks and shares account on 8th June 2009;

• (b) Keydata Investment Services Limited (Keydata) on that day—

• (i) was the account manager of the account, or

• (ii) administered the account for another account manager; and

• (c) the investment was not sold or otherwise disposed of on that day so as to cause it to cease to be a qualifying investment of the account on that day or any other day.

Special application of regulations 5DB, 5DD, 5DF and 5DH in respect of a Lehman Brothers investment

5DJ

In respect of a Lehman Brothers investment—

• (a) regulation 5D shall apply as if after paragraph (2) there is added—

(3) No defaulted investment subscription may be made in respect of a defaulted investment payment made or treated as made on 8th August 2012 other than a single defaulted investment payment treated as made by virtue of regulation 5DL(2).

• (b) regulation 5DB shall apply as if paragraph (b) provided that a defaulted investment subscription must not exceed the amount of the defaulted investment payment determined in accordance with regulation 5DL;

• (c) regulation 5DD is subject to regulation 5DL(2);

• (d) regulation 5DF(1)(b) shall apply as if the information specified by it is—

• (i) the information specified in paragraphs (i)-(iv) of that regulation;

• (ii) the value of the defaulted investment at the opening of trading on the London Stock Exchange on 15th September 2008;

• (iii) the date and amount of any earlier defaulted investment subscriptions in respect of the Lehman Brothers investment in question made before the making of the defaulted investment subscription;

• (iv) the name and address (including postcode) of the account manager to whom any subscription referred to in sub-paragraph (iii) of this paragraph was made;

• (e) regulation 5DH—

• (i) shall apply as if the period mentioned in that regulation were the period commencing on 16th September 2008 and ending on 7th August 2012;

• (ii) is subject to regulation 5DL(2).

Deemed defaulted investment payment in respect of a Lehman Brothers investment

5DK

A defaulted investment payment shall be treated as made on 8th August 2012 in respect of a Lehman Brothers investment to the account investor who held it.

Specified amount for the purposes of a defaulted investment subscription in respect of a Lehman Brothers investment

5DL

• (1) This regulation determines the amount which a defaulted investment subscription must not exceed for the purposes of regulation 5DB(b) in relation to a defaulted investment payment made or treated as made in respect of a Lehman Brothers investment.

• (2) Where one or more defaulted investment payments in respect of a Lehman Brothers investment are made on 8th August 2012 or are treated as made on that day by virtue of regulations 5DH or 5DK, they shall be treated as if they comprised a single defaulted investment payment made on that day of an amount which is the greater of—

• (a) the value of the investment at the opening of trading on the London Stock Exchange on 15th September 2008; or

• (b) the total of the payments made or treated as made by virtue of regulation 5DH on 8th August 2012.

• (3) Where a defaulted investment payment in respect of a Lehman Brothers investment is made after 8th August 2012, its amount for the purposes of regulation 5DB(b) is the greater of—

• (a) the amount determined by the formula $A−B$where—

• (i) “A” is the total of the single defaulted investment payment treated as made on 8th August 2012 in respect of the investment by virtue of paragraph (2) and all defaulted investment payments made in respect of it in the period commencing immediately after that day and ending immediately after the defaulted investment payment in question;

• (ii) “B” is the total of all defaulted investment subscriptions made in respect of the Lehman Brothers investment before the subscription in question; or

• (b) the amount determined by the formula $C−D$where—

• (i) “C” is the value of the investment at the opening of trading on the London Stock Exchange on 15th September 2008;

• (ii) “D” is the total of all defaulted investment subscriptions made in respect of the Lehman Brothers investment before the subscription in question.

Special application of regulations 5DJ to 5DL in respect of a Keydata investment

5DM

In respect of a Keydata investment—

• (a) regulations 5DJ to 5DL shall apply as if—

• (i) a reference to a Lehman Brothers investment were a reference to a Keydata investment;

• (ii) the reference in regulation 5DJ(e)(i) to 16th September 2008 were a reference to 9th June 2009;

• (b) regulation 5DJ(d)(ii) shall apply as if the information it requires is the amount for which the Keydata investment in question was acquired;

• (c) regulation 5DL(2)(a) shall apply as if it referred to the amount of subscriptions made to the account (or any other account or personal equity plan) and other proceeds (including income) representing those subscriptions used to purchase the investment;

• (d) regulation 5DL(3)(a)(i) shall apply as if element “A” is the amount described in regulation 5DL(2)(a) as construed in accordance with paragraph (c) of this regulation;

• (e) regulation 5DL(3)(b)(i) shall apply as if element “C” is the total of the single defaulted investment payment treated as made on 8th August 2012 in respect of the investment by virtue of regulation 5DL(2) and all defaulted investment payments made in respect of it in the period commencing immediately after that day and ending immediately after the defaulted investment payment in question.

Transfers from matured tax-exempt special savings accounts

General investment rules

Qualifying investments for a stocks and shares component

Qualifying investments for a cash component

Insurance policies

Qualifying individuals who may invest under an account that is not a junior ISA account

Account investor ceasing to qualify

Conditions for application to open an account that is not a junior ISA account

Conditions for application to open an account that is not a junior ISA account

Application by curator bonis

Account manager—qualifications and Board’s approval

Special requirements relating to insurer-managers

Account manager—appointment of tax representative

Account manager—withdrawal by Board of approval

Account manager—appeal against withdrawal of Board’s approval

Account manager’s intention to make a bulk transfer of accounts or to cease to act as an account manager

Account manager ceasing to qualify

Transfers relating accounts other than junior ISA accounts

Further requirements relating to transfers between cash accounts

Transfers relating to junior ISA accounts

Repair of invalid junior ISA accounts

Exemption from tax of account income and gains

Interest on cash deposits held under a stocks and shares component of an account that is not a junior ISA account

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

Repayments in respect of tax to account manager—interim claims

Repayments in respect of tax to account manager—interim claims

Account manager’s returns and claims—supplementary provisions

Assessments for withdrawing relief and recovering tax

Records to be kept by account manager

Information to be given to account investor by account manager in relation to an account that is not a junior ISA account

Returns of information by account manager

Information to be provided to the Board

Inspection of records by officer of the Board

Capital gains tax—adaptation of enactments

Administration of tax in relation to accounts—supplementary

Application of the provisions of Chapter II of Part XIII of the Taxes Act and of Chapter 9 of Part 4 of ITTOIA 2005 to policies where an investor ceases to be or was not entitled to relief from tax

Subscriptions made by account investors issued with certificates by Royal Bank of Scotland Group disregarded for the purposes of regulations 4ZA and 31(3)(c)(ii)

5E

• (1) A subscription to an account made in accordance with this regulation on or before 5th April 2013 must be disregarded for the purposes of—

• (a) the subscription limit in regulation 4ZA (subscriptions to an account other than a junior ISA account); and

• (b) regulation 31(3)(c)(ii) (returns of information by account manager).

• (2) A subscription to an account is made in accordance with this regulation if—

• (a) it is made to a cash account held by an account investor;

• (b) a withdrawal was made during the relevant period from a cash account held by the account investor with the account manager holding the cash account to which the subscription is made;

• (c) the account manager of the account to which the subscription is made holds the certificate issued to the account investor in accordance with paragraph (3) (or a copy of it);

• (d) the subscription does not exceed the amount determined in accordance with paragraph (4); and

• (e) no earlier subscription in accordance with this regulation has been made to an account held by the account investor with the account manager holding the cash account to which the subscription in question is made.

• (3) A certificate is issued to an account investor in accordance with this paragraph if—

• (a) it is issued to the account investor by a RBSG bank;

• (b) it contains the name and address (including postcode) of the account investor;

• (c) it identifies the period in respect of which the delay certified in accordance with sub–paragraph (d) occurred; and

• (d) it certifies—

• (i) that the account investor held with a RBSG bank a banking facility (other than an account opened in accordance with regulation 12), in respect of which the updating of the records of deposits made to and payments from the facility was delayed during the relevant period; or

• (ii) that a deposit, payment or other transfer of money to the account investor was delayed in the relevant period by reason of the delay described in paragraph (i).

• (4) The amount referred to in paragraph (2)(d) is the total of all withdrawals made in the relevant period from any cash account held with the account manager holding the cash account to which the subscription in question is made.

• (5) In this regulation—

• (a) a bank is a “RBSG bank” if it is—

• (i) The Royal Bank of Scotland plc, a company incorporated in Scotland (Company Number 090312);

• (ii) National Westminster Bank plc, a company incorporated in England and Wales (Company Number 00929027);

• (iii) Ulster Bank, Limited, a company incorporated in Northern Ireland (Company Number R0000733);

• (b) the “relevant period” is 19th June to 6th July 2012 (but to 22nd July 2012 where the bank in paragraph (3)(d) is Ulster Bank, Limited).

Transfers from matured tax-exempt special savings accounts

General investment rules

Qualifying investments for a stocks and shares component

Qualifying investments for a cash component

Insurance policies

Qualifying individuals who may invest under an account that is not a junior ISA account

Account investor ceasing to qualify

Conditions for application to open an account that is a junior ISA account

Application by curator bonis

Account manager—qualifications and Board’s approval

Special requirements relating to insurer-managers

Account manager—appointment of tax representative

Account manager—withdrawal by Board of approval

Account manager—appeal against withdrawal of Board’s approval

Account manager’s intention to make a bulk transfer of accounts or to cease to act as an account manager

Account manager ceasing to qualify

Transfers relating accounts other than junior ISA accounts

Further requirements relating to transfers between cash accounts

Transfers relating to junior ISA accounts

Repair of invalid junior ISA accounts

Exemption from tax of account income and gains

Interest on cash deposits held under a stocks and shares component of an account that is not a junior ISA account

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

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

Account manager’s returns and claims—supplementary provisions

Assessments for withdrawing relief and recovering tax

Records to be kept by account manager

Information to be given to account investor by account manager in relation to an account that is not a junior ISA account

Returns of information by account manager

Information to be provided to the Board

Inspection of records by officer of the Board

Capital gains tax—adaptation of enactments

Administration of tax in relation to accounts—supplementary

Application of the provisions of Chapter II of Part XIII of the Taxes Act and of Chapter 9 of Part 4 of ITTOIA 2005 to policies where an investor ceases to be or was not entitled to relief from tax

Additional permitted subscription to an account other than a junior ISA account

5DDA

• (1) A subscription to an account other than a junior ISA account is permitted by this regulation if—

• (a) it is made in the circumstances described in paragraph (2); and

• (b) the amount of the subscription, or the aggregate of a number of such subscriptions, does not exceed in value the amount determined in accordance with paragraph (3).

• (2) The circumstances are—

• (a) an account investor dies on or after 3rd December 2014 leaving a surviving spouse or civil partner (S);

• (b) subject to paragraph (6), a subscription is made by S to an account or accounts managed by a single account manager or, in a case within sub-paragraph (e), the deceased’s account manager;

• (c) the subscription is within the permitted period;

• (d) S and the deceased were living together at the date of the deceased’s death; and

• (e) where the subscription comprises non-cash assets—

• (i) the deceased held an account either comprising or including non-cash assets at the date of the deceased’s death;

• (ii) S inherits all or part of those assets;

• (iii) S makes a subscription comprising those assets or any part therof; ...

• (iv) throughout the period beginning with the day on which the deceased’s account manager was notified of the deceased’s death and ending immediately before the subscription is made, title to those assets is vested in the deceased’s account manager, that manager’s nominee or jointly in one of them and another; and

• (v) in the case of non-cash assets comprised or included in an innovative finance account, other than those specified in regulation 8A(2)(cb), paragraph (iv) shall apply but with the words from “title to” to “and another.” being substituted by “those assets remain under the management of the deceased’s account manager.

• (3) The amount is—

• (a) where the deceased held a single account with a single account manager, then the value of that account at the date of the deceased’s death or, in the event that the period for an administration-period investment in a continuing account of a deceased investor with an account manager ends and S has not made a subscription under paragraph (1), immediately before the account ceasing to be a continuing account of a deceased investor (whichever is the higher); or

• (b) where the deceased held more than one account with a single account manager, then the combined value of those accounts at the date of the deceased’s death or, in the event mentioned in paragraph 3(a) occurring, immediately before the account ceasing to be a continuing account of a deceased investor (whichever is the higher);

but does not include any sums the deceased held in a junior ISA account.

• (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.

• (3B) For the purposes of paragraph (3) the value of a Lifetime ISA at the date of the deceased’s death or, in the event mentioned in paragraph 3(a) occurring, immediately before the account ceasing to be a continuing account of a deceased investor (whichever is the higher) includes any government bonus that has accrued to the date of death but has not been paid.

• (4) In this regulation, the permitted period means—

• (a) in the case of a subscription comprising non-cash assets made in accordance with paragraph (2), the period beginning with distribution to S by the deceased’s estate of the non-cash assets and ending no more than 180 days thereafter;

• (b) in the case of any other subscription under this regulation, the period beginning with the date of the deceased’s death and ending either—

• (i) no more than 3 years thereafter; or

• (ii) no more than 180 days after administration of the estate is complete;

whichever is the later.

• (5) Where the deceased died in the period beginning with 3rd December 2014 and ending on 5th April 2015—

• (a) for the purposes of paragraph (4)(a), distribution to S by the deceased’s estate of non-cash assets is treated as occurring on either 6th April 2015, or, the actual date of distribution, whichever is the later; and

• (b) for the purposes of paragraph(4)(b), the deceased is treated as dying on 6thApril 2015.

• (6) The requirement in paragraph (2)(b) is deemed as met where the Board authorises an account manager to accept a subscription from S.

• (7) The following regulations do not apply to a subscription permitted by this regulation—

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

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

• (c) 6(3);

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (11) In this regulation—

• (a) “inherits” in paragraph (2)(e)(ii) includes inherits under a will trust or as a result of a deed of variation;

• (b) “non-cash assets” means—

• (i) those investments specified in regulation 7, other than those in paragraph (2)(j); and

• (ii) those investments specified in regulation 8(2)(f), (h), (p) or (q); and

• (iii) the right to exercise the rights of the lender in respect of the outstanding principal balance under an article 36H agreement; and

• (iv) those investments specified in regulation 8A(2)(ca) or (cb); and

• (c) the value of a subscription comprising non-cash assets made pursuant to paragraph (2) is the value of the assets at the date of the subscription.

Additional permitted subscription to a junior ISA account

Information required by regulation 5D

Declarations required by regulation 5D

5DFA

• (1) The declarations in regulation 5D(2)(c) required by S in relation to a subscription permitted by regulation 5DDA are—

• (a) in all cases, those specified in paragraph (2);

• (b) in a case where the subscription is made with the deceased’s account manager (A), those specified in paragraph (3); and

• (c) in a case where the subscription is being made with an account manager other than the deceased’s account manager (B), those specified in paragraph (4).

• (2) The declarations specified in this paragraph are—

• (a) that S is the surviving spouse or civil partner of the deceased;

• (b) that S and the deceased were living together so as to meet the requirements specified in section 1011 of the Income Tax Act 2007, at the date of the deceased’s death; and

• (c) that the subscription is being made under regulation 5DDA.

• (3) The declarations specified in this paragraph are that the subscription is being made—

• (a) in the case of a subscription of non-cash assets made in accordance with paragraph (2) of that regulation—

• (i) in the period beginning with distribution to S by the deceased’s estate of those assets and ending no more than 180 days thereafter; or

• (ii) in the case of the deceased’s death occurring in the period beginning with 3rd December 2014 and ending with 5th April 2015, no later than 2nd October 2015;

whichever is the later; and

• (b) in the case of any other subscription under that regulation, in the period beginning with the date of the deceased’s death and ending—

• (i) no more than 3 years thereafter, or in the case of the deceased’s death occurring in the period beginning with 3rd December 2014 and ending with 5th April 2015, no later than 5th April 2018; or

• (ii) no more than 180 days after administration of the estate is complete.

• (4) The declarations specified in this paragraph are—

• (a) that the subscription is being made by a payment of cash;

• (b) that, in the permitted period, S has not made, with A, any subscription permitted by regulation 5DDA in respect of the amount determined in accordance with paragraph (3) of that regulation; and

• (c) that the subscription is being made in the period beginning with the date of the deceased’s death and ending—

• (i) no more than 3 years thereafter, or in the case of the deceased’s death occurring in the period beginning with 3rd December 2014 and ending with 5th April 2015, no later than 5th April 2018; or

• (ii) no more than 180 days after administration of the estate is complete.

• (5) The requirements in sub-paragraphs (2)(a), (b) and (4)(b) are met where the information is provided on the first instance a subscription permitted by regulation 5DDA in respect of an amount determined in accordance with paragraph (3) of that regulation is made to an account.

Notices required by regulation 5D

5DFB

• (1) Where an account manager (B) has—

• (a) been notified by S that S wishes to make a subscription under regulation 5DDA; or

• (b) received an application from S to make such a subscription;

that account manager shall, within the period of 30 days beginning with the day on which the notification or application is received, give to the deceased’s account manager (A) a notice containing the information specified in paragraph (2).

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

• (i) the name and address of the deceased;

• (ii) the deceased’s date of birth and date of death;

• (iii) the deceased’s National Insurance number, if known;

• (iv) S’s name and address;

• (v) a statement that B has either received an application from S to make a subscription under regulation 5DDA or been notified that S wishes to make such a subscription; and

• (vi) a statement that B has, subject to relevant checks, accepted that application or, where B has been notified that S wishes to make such a subscription, that B will accept such an application subject to relevant checks.

• (3) Where A receives from B a notice under paragraph (1), A shall, within the period of 30 days beginning with the day on which that notification is received, give B a notice containing—

• (i) the deceased’s full name;

• (ii) the full address of the deceased’s permanent residence at the date of death;

• (iii) the deceased’s date of birth and date of death;

• (iv) the deceased’s National Insurance number, if known;

• (v) the amount determined in accordance with paragraph (3) of regulation 5DDA;

• (vi) a declaration that, in the permitted period, S has not made to an account held by A, any subscription permitted by regulation 5DDA in respect of the amount determined in accordance with paragraph (3) of that regulation;

• (vii) an undertaking that, other than in the case of an authorisation given under paragraph (6) of regulation 5DDA, A will not accept a subscription made by S in respect of the amount determined in accordance with paragraph (3) of that regulation; and

• (viii) an undertaking that, other than in the case of an authorisation given under paragraph (6) of regulation 5DDA, A will not provide the information and declarations in this paragraph to another account manager in respect of the amount determined in accordance with paragraph (3) of that regulation.

• (4) In this regulation relevant checks means checks by B in relation to the information and declarations provided by S pursuant to regulations 5DF and 5DFA.

5DFC

• (1) Where the deceased’s account manager receives a request from S made in accordance with paragraph (2), that account manager shall, within the period of 30 days beginning with the day on which the request is received, provide to S a statement of the amount determined in accordance with paragraph (3) of regulation 5DDA.

• (2) The request shall contain the information required by regulation 5DF(1)(c) and the declarations required by regulation 5DFA(1)(a) and (b).

5DFD

—Regulation 12(7) to (11), (12) and (13) applies in relation to any information or declaration required under regulations 5DF(1)(c) and 5DFA as it applies to any application to open an account.

Single regulation 5D subscription

Default event or default investment payment occurring in the period beginning on 6th April 2011 and ending on 7th August 2012

Special provision in respect of Lehman Brothers investments and Keydata investments

Special application of regulations 5DB, 5DD, 5DF and 5DH in respect of a Lehman Brothers investment

Deemed defaulted investment payment in respect of a Lehman Brothers investment

Specified amount for the purposes of a defaulted investment subscription in respect of a Lehman Brothers investment

Special application of regulations 5DJ to 5DL in respect of a Keydata investment

Subscriptions made by account investors issued with certificates by Royal Bank of Scotland Group disregarded for the purposes of regulations 4ZA and 31(3)(c)(ii)

Transfers from matured tax-exempt special savings accounts

General investment rules

Qualifying investments for a stocks and shares component

Qualifying investments for a cash component

Insurance policies

Qualifying individuals who may invest under an account that is not a junior ISA account

Account investor ceasing to qualify

Conditions for application to open an account that is not a junior ISA account

Conditions for application to open an account that is a junior ISA account

Application by curator bonis

Account manager—qualifications and Board’s approval

Special requirements relating to insurer-managers

Account manager—appointment of tax representative

Account manager—withdrawal by Board of approval

Account manager—appeal against withdrawal of Board’s approval

Account manager’s intention to make a bulk transfer of accounts or to cease to act as an account manager

Account manager ceasing to qualify

Transfers relating accounts other than junior ISA accounts

Further requirements relating to transfers between cash accounts

Transfers relating to junior ISA accounts

Repair of invalid junior ISA accounts

Exemption from tax of account income and gains

Interest on cash deposits held under a stocks and shares component of an account that is not a junior ISA account

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

Repayments in respect of tax to account manager—interim claims

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

Account manager’s returns and claims—supplementary provisions

Assessments for withdrawing relief and recovering tax

Records to be kept by account manager

Information to be given to account investor by account manager in relation to an account that is not a junior ISA account

Returns of information by account manager

Information to be provided to the Board

Inspection of records by officer of the Board

Capital gains tax—adaptation of enactments

Administration of tax in relation to accounts—supplementary

Application of the provisions of Chapter II of Part XIII of the Taxes Act and of Chapter 9 of Part 4 of ITTOIA 2005 to policies where an investor ceases to be or was not entitled to relief from tax

Flexible account

5DDB

• (1) −The terms and conditions of an account (other than a junior ISA account or 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 or qualifying investments for a stocks and shares component within regulation 7(2)(h) (“replacement subscription”) made in that year.

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

• (3) 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.

• (3A) 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).

• (4) Subject 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.

• (4A) No withdrawal under paragraph (1) may reduce the current year’s subscription amount to less than nil.

• (5) 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.

• (6) On any transfer under regulation 21 ..., 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.

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

• (8) For the purposes of this regulation−

• “current year’s subscription” means (other than a subscription made in accordance with regulation 5D)−a subscription made to the account by the account investor in the year in which a replacement subscription is made;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; andthe qualifying investments and other proceeds (including income) representing the subscriptions in sub-paragraphs (a) and (b) of this definition;

• “previous years’ subscription” means−a subscription made to the account (or any other account or former personal equity plan) in any earlier year or years;any replacement subscription of a withdrawal of a cash amount made out of that subscription; andthe qualifying investments and other proceeds (including income) representing the subscriptions in sub-paragraphs (a) and (b) of this definition.

Additional permitted subscription of cash to an account other than a junior ISA on closure of Help to Buy ISA

5DDC

• (1) A subscription of cash to an account, other than a junior ISA account, is permitted by this regulation if—

• (a) it is made in the circumstances described in paragraph (2); and

• (b) the amount of the subscription does not exceed in value the amount determined in accordance with paragraph (3).

• (2) The circumstances are—

• (a) the account investor has closed their Help to Buy ISA;

• (b) the account investor has provided to the account manager evidence in accordance with the terms and conditions of the Help to Buy ISA of a failure of a completion of a purchase of a home;

• (c) the subscription is within the permitted period described in paragraph (4).

• (3) The amount is an amount up to that which the account investor withdrew from the Help to Buy ISA at the time of closure.

• (4) In this regulation, the permitted period means the period of no more than 12 months beginning with the date of closure of the Help to Buy ISA.

• (5) Only one subscription may be made under paragraph (1) in the circumstances of paragraph (2), even if the subscription made is less than the full amount which could have been made in accordance with paragraph (3).

• (6) In this regulation “Help to Buy ISA” means a cash account (or an element of one) which is managed and held in accordance with these Regulations and scheme rules from time to time made by the Treasury in order to help an individual who is eligible under those rules to purchase a home.

Additional permitted subscription to a junior ISA account

Information required by regulation 5D

Declarations required by regulation 5D

Notices required by regulation 5D

Single regulation 5D subscription

Default event or default investment payment occurring in the period beginning on 6th April 2011 and ending on 7th August 2012

Special provision in respect of Lehman Brothers investments and Keydata investments

Special application of regulations 5DB, 5DD, 5DF and 5DH in respect of a Lehman Brothers investment

Deemed defaulted investment payment in respect of a Lehman Brothers investment

Specified amount for the purposes of a defaulted investment subscription in respect of a Lehman Brothers investment

Special application of regulations 5DJ to 5DL in respect of a Keydata investment

Subscriptions made by account investors issued with certificates by Royal Bank of Scotland Group disregarded for the purposes of regulations 4ZA and 31(3)(c)(ii)

Transfers from matured tax-exempt special savings accounts

General investment rules

Qualifying investments for a stocks and shares component

Qualifying investments for a cash component

Insurance policies

Qualifying individuals who may invest under an account that is not a junior ISA account

Account investor ceasing to qualify

Conditions for application to open an account that is not a junior ISA account

Conditions for application to open an account that is not a junior ISA account

Application by curator bonis

Account manager—qualifications and Board’s approval

Special requirements relating to insurer-managers

Account manager—appointment of tax representative

Account manager—withdrawal by Board of approval

Account manager—appeal against withdrawal of Board’s approval

Account manager’s intention to make a bulk transfer of accounts or to cease to act as an account manager

Account manager ceasing to qualify

Transfers relating accounts other than junior ISA accounts

Further requirements relating to transfers between cash accounts

Transfers relating to junior ISA accounts

Repair of invalid junior ISA accounts

Exemption from tax of account income and gains

Interest on cash deposits held under a stocks and shares component of an account that is not a junior ISA account

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

Repayments in respect of tax to account manager—interim claims

Repayments in respect of tax to account manager—interim claims

Account manager’s returns and claims—supplementary provisions

Assessments for withdrawing relief and recovering tax

Records to be kept by account manager

Information to be given to account investor by account manager in relation to an account that is not a junior ISA account

Returns of information by account manager

Information to be provided to the Board

Inspection of records by officer of the Board

Capital gains tax—adaptation of enactments

Administration of tax in relation to accounts—supplementary

Application of the provisions of Chapter II of Part XIII of the Taxes Act and of Chapter 9 of Part 4 of ITTOIA 2005 to policies where an investor ceases to be or was not entitled to relief from tax

Qualifying investments for an innovative finance component

8A

• (1) This regulation specifies the kind of investments (“qualifying investments for an innovative finance component”) which may be purchased, made or held under an innovative finance account.

• (2) Qualifying investments for an innovative finance component to which paragraph (1) refers are—

• (a) payments by a borrower made under an article 36H agreement where the conditions in paragraphs (3) and (3A) are met;

• (b) payments by an assignee for the right to exercise the rights of the lender under an article 36H agreement where the conditions in paragraphs (3)(c) and (d) and (3A) are met;

• (c) payments by a novatee in respect of the novation of an article 36H agreement where the conditions in paragraphs (3)(c) and (d) and (3A) are met;

• (ca) debentures where the conditions in paragraph (4) are met;

• (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;

• (cc) investments in a long-term asset fund;

• (d) cash deposited in accordance with regulation 6(4) to (6); and

• (e) payments by way of compensation in respect of a matter described in regulation 5DD in relation to an investment specified in this regulation.

• (3) The conditions in this paragraph are—

• (a) the payment is a payment of interest , capital or profit, or any combination of these payments;

• (b) the payment is made to the account manager of the account investor;

• (c) the article 36H agreement is made on genuine commercial terms; and

• (d) the article 36H agreement is not part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax.

• (3A) The conditions in this paragraph are—

• (a) the payment is not made to the lender by reason of that person’s or another person’s status, whether past, present or prospective, as an employee, director, partner, trustee or the holder of any office;

• (b) the borrower is not connected with the lender, and for this purpose “connected” has the meaning given in section 170 of ITA 2007 with the omission of “in period A” in subsection (7); and

• (c) the payment must not be connected with any other investment held outside an account by the account investor or any other person, and for this purpose an investment is to be treated as connected with another investment if—

• (i) either investment was made with reference to the other or with a view to enabling the other investment to be made on particular terms; or

• (ii) the terms on which either investment was made would have been significantly less favourable if the other investment had not been made.

• (4) The conditions in this paragraph are—

• (a) the debenture is a transferable security issued by a company or a charity;

• (b) the investment in the debenture is facilitated by a person carrying on an activity of the kind specified in article 25 of the Regulated Activities Order 2001 through an electronic system operated by that person in the United Kingdom or an EEA State for such purpose;

• (c) that person or another, acting under an arrangement with that person or at that person’s direction, in respect of the investment, treats the account investor as its client and undertakes on behalf of the account investor to—

• (i) receive payments in respect of the debenture;

• (ii) make payments, when due, in respect of the debenture to the account investor; and

• (iii) exercise, or facilitate the exercise of, rights in respect of the debenture;

• (d) the investment in the debenture is not part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax;

• (e) the debenture is not made available to the account investor by reason of their or of another’s status, whether past, present or prospective, as an employee, director, partner, trustee or the holder of any office;

• (f) the account investor is not connected with the issuer of the debenture, and for this purpose “connected” has the meaning given in section 170 of ITA 2007 with the omission of the reference to “in period A” in sub-section (7);

• (g) the debenture must not be connected with any other investment held outside an account by the account investor or any other person, and for this purpose an investment is to be treated as connected with another if—

• (i) either was made with reference to the other or with a view to enabling the other to be made on particular terms;

• (ii) the terms on which either investment was made would have been significantly less favourable if the other investment had not been made; and

• (h) the investment in the debenture is made on genuine commercial terms.

• (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 COLL.

Insurance policies

Qualifying individuals who may invest under an account that is not a junior ISA account

Account investor ceasing to qualify

Conditions for application to open an account that is a junior ISA account

Application by curator bonis

Account manager—qualifications and Board’s approval

Special requirements relating to insurer-managers

Account manager—appointment of tax representative

Account manager—withdrawal by Board of approval

Account manager—appeal against withdrawal of Board’s approval

Account manager’s intention to make a bulk transfer of accounts or to cease to act as an account manager

Account manager ceasing to qualify

Transfers relating accounts other than junior ISA accounts

Further requirements relating to transfers between cash accounts

Transfers relating to junior ISA accounts

Repair of invalid junior ISA accounts

Exemption from tax of account income and gains

Interest on cash deposits held under a stocks and shares component of an account that is not a junior ISA account

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

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

Account manager’s returns and claims—supplementary provisions

Assessments for withdrawing relief and recovering tax

Records to be kept by account manager

Information to be given to account investor by account manager in relation to an account that is not a junior ISA account

Returns of information by account manager

Information to be provided to the Board

Inspection of records by officer of the Board

Capital gains tax—adaptation of enactments

Administration of tax in relation to accounts—supplementary

Application of the provisions of Chapter II of Part XIII of the Taxes Act and of Chapter 9 of Part 4 of ITTOIA 2005 to policies where an investor ceases to be or was not entitled to relief from tax

Application of the repair provisions to Lifetime ISAs

4AA

• (1) The following modifications to regulation 4A apply where one or more of the accounts to which the investor subscribes in the relevant year is a Lifetime ISA.

• (2) Where an investor has made current year payments in excess of the Lifetime ISA payment limit in regulation 4ZA(1A) to a single Lifetime ISA, an officer of the Board may direct the removal of the excess and proceeds representing the excess, whether or not the overall subscription limit in regulation 4ZA(1) has been exceeded.

• (3) Where an investor has exceeded the overall subscription limit in regulation 4ZA(1), but has not exceeded the Lifetime ISA payment limit in regulation 4ZA(1A), the excess shall be removed from the accounts which are not Lifetime ISAs.

• (4) Where an investor has made current year payments ... to more than one Lifetime ISA, only one account will be a valid account which is eligible for the payment of a government bonus.

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

Removal of insurance components at 6th April 2005

Removal of maxi-accounts, mini-accounts and TESSA only accounts at 6th April 2008

Treatment of sums held in accounts managed by Icesave Bank

Treatment of certain sums held in accounts managed by Keydata Investment Services Limited

Treatment of certain sums held in dormant accounts

Subscriptions disregarded for the purposes of the subscription limits in regulations 4ZA(1) and 4ZB

Defaulted cash account subscription

Defaulted Lifetime ISA subscription

5DAA

A subscription is a defaulted Lifetime ISA subscription if—

• (a) it is made to a Lifetime ISA held by the account investor who held the Lifetime ISA in respect of which a defaulted investment payment has been made no more than 180 days before the subscription is made; and

• (b) it does not exceed the defaulted investment payment.

Defaulted investment subscription

Default event in respect of cash account

Defaulted investment payment

Additional permitted subscription to an account other than a junior ISA account

Flexible account

Additional permitted subscription of cash to an account other than a junior ISA on closure of Help to Buy ISA

Additional permitted subscription to a junior ISA account

Information required by regulation 5D

Declarations required by regulation 5D

Notices required by regulation 5D

Single regulation 5D subscription

Default event or default investment payment occurring in the period beginning on 6th April 2011 and ending on 7th August 2012

Special provision in respect of Lehman Brothers investments and Keydata investments

Special application of regulations 5DB, 5DD, 5DF and 5DH in respect of a Lehman Brothers investment

Deemed defaulted investment payment in respect of a Lehman Brothers investment

Specified amount for the purposes of a defaulted investment subscription in respect of a Lehman Brothers investment

Special application of regulations 5DJ to 5DL in respect of a Keydata investment

Subscriptions made by account investors issued with certificates by Royal Bank of Scotland Group disregarded for the purposes of regulations 4ZA and 31(3)(c)(ii)

Transfers from matured tax-exempt special savings accounts

General investment rules

Qualifying investments for a stocks and shares component

Qualifying investments for a cash component

Qualifying investments for a Lifetime ISA component

8ZA

The kind of investments (“qualifying investments for a Lifetime ISA component”) which may be purchased, made or held under a Lifetime ISA are—

• (a) qualifying investments for a stocks and shares component; and

• (b) qualifying investments for a cash component.

Qualifying investments for an innovative finance component

Insurance policies

Qualifying individuals who may invest under an account that is not a junior ISA account nor a Lifetime ISA

Lifetime ISA qualifying individuals who may invest under a Lifetime ISA

10A

• (1) This regulation specifies the description of individual (“Lifetime ISA qualifying individual”) who may invest under a Lifetime ISA.

• (2) A Lifetime ISA qualifying individual to whom paragraph (1) refers is an individual who—

• (a) is 18 years of age or over;

• (b) in relation to a current year payment is under 50 years of age;

• (c) in relation to a current year payment or a payment under paragraph (4)(c), has not made, and will not make, any such payment to any other Lifetime ISA in the year in which the payment is made;

• (d) has not exceeded the overall subscription limit in regulation 4ZA(1) in that year;

• (e) has not exceeded the overall Lifetime ISA payment limit in regulation 4ZA(1A) in that year; and

• (f) in relation to a current year payment or a payment under paragraph (4)(c), is resident in the United Kingdom or, if not so resident—

• (i) is 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, or

• (ii) is married to or in a civil partnership with a person mentioned in paragraph (i).

• (3) Subject to paragraph (4), the following are current year payments—

• (a) a subscription of money;

• (b) a subscription of shares to which regulation 7(2)(h) applies;

• (c) a subscription to which regulation 5D applies;

• (d) an additional permitted subscription in accordance with regulation 5DDA;

• (e) a replacement subscription in accordance with regulation 5DDB;

• (f) an additional permitted subscription on closure of a Help to Buy ISA in accordance with regulation 5DDC; and

• (g) a transfer of qualifying investments for a Lifetime ISA component from an account which is not a Lifetime ISA.

• (4) The following are not current year payments—

• (a) a defaulted Lifetime ISA subscription under regulation 5D(2)(a)(ia);

• (b) a returned withdrawal under regulation 5D(2)(a)(ib); ...

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

Account investor ceasing to qualify

Conditions for application to open an account that is not a junior ISA account or a Lifetime ISA

Conditions for application to open an account that is not a junior ISA account or a Lifetime ISA

Conditions for application to open an account that is a junior ISA account

12B

• (1) An application by an individual to open a Lifetime ISA must be made to an account manager in the year in which the applicant first makes a payment to that account and must fulfil the conditions specified in paragraph (2).

• (2) The application must state that it is an application to open a Lifetime ISA and—

• (a) specify the first year to which the application relates;

• (b) contain the information and authorisation specified in paragraph (3); and

• (c) contain a declaration by the applicant in accordance with paragraph (4).

• (3) The application must contain—

• (a) the applicant’s full name;

• (b) the address and postcode of the applicant’s permanent residence;

• (c) the applicant’s national insurance number;

• (d) the applicant’s date of birth; and

• (e) the authorisation specified in paragraph (7).

• (4) The application must contain a declaration by the applicant that—

• (a) all subscriptions of money made, and to be made, to the account are or will be the applicant’s money;

• (b) in the first year and in any subsequent year to which the application relates, the applicant has not—

• (i) in relation to a qualifying addition made into the account, made and will not make, any such addition to any other Lifetime ISA,

• (ii) exceeded, and will not exceed, the overall subscription limit in regulation 4ZA(1), and

• (iii) made, and will not make, current year payments that exceed the overall Lifetime ISA payment limit in regulation 4ZA(1A);

• (c) the applicant is 18 years of age or over;

• (d) except where paragraph (5) applies, the applicant is under 40 years of age, and

• (i) is resident in the United Kingdom, or

• (ii) is 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, or

• (iii) is married to or in a civil partnership with a person mentioned in sub-paragraph (ii); and

• (e) the applicant will inform the account manager if any of the circumstances under sub-paragraph (d)(i) to (iii) changes.

• (5) This paragraph applies where the Lifetime ISA is being opened to receive—

• (a) a transfer of current year’s subscriptions or previous years’ subscriptions from another Lifetime ISA (within the meaning of regulation 21(1)), or

• (b) a payment in accordance with regulation 5D(2)(a)(ia) or (ib).

• (6) A declaration under paragraph (4) shall have effect for each year in which the applicant makes a payment to the account to which the declaration relates except that after the account has been opened the reference to 40 in paragraph (4)(d) is deemed to be 50.

• (7) The authorisation specified by this paragraph is authority given by the applicant to the account manager—

• (a) to hold the payments, account investments, interest, dividends and any other rights or proceeds (including any government bonus) in respect of those investments and cash;

• (b) to make on behalf of the applicant any claims to relief from tax in respect of account investments;

• (c) to submit any government bonus claims to the Board on the applicant’s behalf;

• (d) to withhold and deduct from a balance in the account and pay to the Board—

• (i) any charges due to the Board from the account manager on withdrawals from the account; and

• (ii) any amount wrongly paid by way of government bonus accountable to the Board by the account manager under paragraph 12 of the Schedule; and

• (e) to make a record in writing in accordance with paragraph (9)(a) where that paragraph requires the account manager to do so.

• (8) An account manager may not accept as an account investor any individual if the account manager has reason to believe that—

• (a) the individual is not, or might not be, a Lifetime ISA qualifying individual;

• (b) the individual has given untrue information in an application; or

• (c) subject to the exceptions described in paragraph (5), the individual is 40 years of age or over.

• (9) Where an application is not in writing, or the account manager operates a record system under which all original written applications are not retained—

• (a) the account manager must, immediately after receiving the application, record in writing on behalf of the applicant, the declaration required by paragraph (2)(c) and the authorisation required by paragraph (3)(e);

• (b) the account manager must notify the applicant of the contents of the written record within 5 business days of making it; and

• (c) the written record, as amended by any corrections notified to the account manager by the applicant within 30 days of the notification mentioned in sub-paragraph (b), shall be treated as the applicant’s declaration required by paragraph (2)(c) and the authorisation required by paragraph (3)(e).

• (10) For the purposes of paragraph (9), “in writing” and “written record” have the same meanings as in regulation 12A(12) to (14).

• (11) The application may be made on an individual’s behalf—

• (a) if the individual is resident in England and Wales—

• (i) pursuant to an order under section 16(2)(a) of the Mental Capacity Act 2005; or

• (ii) by a deputy appointed under section 16(2)(b) of that Act; or

• (b) if the individual is resident in Scotland or Northern Ireland and is suffering from mental disorder, by a parent, guardian, spouse, civil partner, son or daughter of the individual.

• (12) In paragraph (11)(b) “mental disorder” has the meaning given by, in Scotland section 328 of the Mental Health (Care and Treatment) (Scotland) Act 2003 or, in Northern Ireland, Article 3 of the Mental Health (Northern Ireland) Order 1986.

Application by curator bonis

Account manager—qualifications and Board’s approval

Special requirements relating to insurer-managers

Account manager—appointment of tax representative

Account manager—withdrawal by Board of approval

Account manager—appeal against withdrawal of Board’s approval

Account manager’s intention to make a bulk transfer of accounts or to cease to act as an account manager

Account manager ceasing to qualify

Transfers relating accounts other than junior ISA accounts

Further requirements relating to transfers between cash accounts

Transfers relating to junior ISA accounts

Repair of invalid junior ISA accounts

Exemption from tax of account income and gains

Interest on cash deposits held under a stocks and shares component of an account that is not a junior ISA account

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

Repayments in respect of tax to account manager—interim claims

Repayments in respect of tax to account manager—interim claims

Account manager’s returns and claims—supplementary provisions

Assessments for withdrawing relief and recovering tax

Records to be kept by account manager

Information to be given to account investor by account manager in relation to an account that is not a junior ISA account

Returns of information by account manager

Information to be provided to the Board

Inspection of records by officer of the Board

Capital gains tax—adaptation of enactments

Administration of tax in relation to accounts—supplementary

Application of the provisions of Chapter II of Part XIII of the Taxes Act and of Chapter 9 of Part 4 of ITTOIA 2005 to policies where an investor ceases to be or was not entitled to relief from tax

37

The Schedule makes further provision for Lifetime ISA.

SCHEDULE — LIFETIME ISA FURTHER PROVISION

Interpretation

1

• (1) In this Schedule—

• “claim period” means—a period beginning with the 6th day of a month and ending with the 5th day of the following month, orsuch period as may be specified from time to time under paragraph 2(1);

• “government bonus” is an amount equal to 25% of the aggregate of qualifying additions made to a Lifetime ISA in a relevant period;

• “qualifying addition” means a current year payment ... which is made into a Lifetime ISA;

• “relevant period” means the year 2017-2018 and any subsequent year;

• “Schedule 1” means Schedule 1 to the Savings (Government Contributions) Act 2017;

• ”withdrawal charge” has the meaning given in paragraph 9(4) of Schedule 1.

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

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Government bonus claim

2

• (1) The Board may from time to time specify—

• (a) the information to be included in a claim for a government bonus;

• (b) the periods to which such a claim is to relate; and

• (c) the form or manner in which such a claim is to be made.

• (2) A government bonus is only payable if a claim for it is made in accordance with this Schedule.

• (3) The person who must make a claim for a government bonus for qualifying additions made to the Lifetime ISA in a claim period is—

• (a) subject to sub-paragraph (b), the person who is, or was, the account manager of a Lifetime ISA at the end of a claim period or on closure of a Lifetime ISA;

• (b) where a Lifetime ISA is transferred to another such account of the account investor during a claim period, the account manager of the account at the end of the period.

• (4) The claim is to be made within 14 days beginning with the day after the end of a claim period.

• (5) The Board (subject to checking and if necessary correcting the amount of the claim) must pay the account manager any government bonus amount that is due—

• (a) where the claim is made by the due date, within 14 days beginning with the day after the due date for the claim; and

• (b) where the claim is made later than the due date, within 14 days beginning with the day after the due date for a claim for the claim period in which the late claim is made.

• (6) Any government bonus payment which on being made is not paid into a Lifetime ISA of the account investor must be treated as a withdrawal.

• (7) Where a claim has been made and the account manager becomes aware within six years after the end of the claim period that—

• (a) anything which should have been included in the claim has not been included,

• (b) anything which should not have been included in the claim has been included, or

• (c) any other error has occurred in the claim,

the account manager must correct the error without delay.

• (8) If the account manager corrects a claim, such assessments, adjustments, payments or repayments of government bonus as are necessary for achieving the objective mentioned in sub-paragraph (9) must be made.

• (9) The objective is that the entitlement (or otherwise) of the account investor to a government bonus should be the same as it would have been if a correct claim had been delivered.

• (10) The Board may enquire into a claim and return if—

• (a) they have reasonable grounds for believing that an error has occurred in the claim, and

• (b) they give notice to the account manager of their intention to do so no later than 12 months after the date on which the claim is made.

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rejection of government bonus claim

3

• (1) The Board must notify the account manager of a rejection of any claim for a government bonus together with reasons for the decision—

• (a) where the claim is made by the due date, within 14 days beginning with the day after the due date for the claim, and

• (b) where the claim is made later than the due date, within 14 days beginning with the day after receipt of the claim.

• (2) The account manager on receipt of such notification must notify the account investor within 14 days beginning with the day after the day of receipt.

• (3) An account investor may within 90 days beginning with the day after receipt of a notification under sub-paragraph (2) apply to the Board for payment of a government bonus which has been refused.

• (4) Paragraph 16 (appeals) applies, in relation to an account manager, to a notification under sub-paragraph (1), and, in relation to an account investor, to a decision in respect of an application under sub-paragraph (3).

• (5) The effect of any notification or decision is not suspended by the making of an application or an appeal.

Specified age; terminal illness; transfer to another Lifetime ISA-no withdrawal charge

4

• (1) For the purposes of paragraph 7(1)(a) of Schedule 1 (withdrawals not triggering a charge-specified age) the specified age is 60.

• (2) For the purposes of paragraph 7(5)(c) of Schedule 1 (withdrawals not triggering a charge-terminal illness) an account investor is to be considered as suffering from a terminal illness if the account manager of the account investor’s Lifetime ISA has received written evidence from a registered medical practitioner that the account investor is expected to live for less than one year.

• (3) For the purposes of paragraph 7(5)(d) of Schedule 1 (withdrawals not triggering a charge-transfer to another Lifetime ISA), a withdrawal by way of transfer from one Lifetime ISA of the account investor to another such account of the investor must be made in accordance with regulation 21.

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 25%.

First-time residential purchase

6

• (1) For the purposes of paragraph 7(5)(a) and (b) of Schedule 1 (withdrawals not triggering a charge) the provisions in sub-paragraphs (2) to (14) apply.

• (2) The withdrawal must only be used by the account investor towards defraying the purchase price for the acquisition by the account investor as a first-time buyer of a residential property.

• (3) The purchase price must not exceed £450,000.

• (4) The account investor must be purchasing as sole owner or as joint owner with another individual who may already own the property.

• (5) The purchase must be of a legal interest in land situated in the United Kingdom with a view to the account investor becoming a residential property owner.

• (6) The purchase must be—

• (a) funded by a loan that will be secured by a charge over the land by way of—

• (i) a legal mortgage (if land in England andWales),

• (ii) a heritable security (if land in Scotland), or

• (iii) a legal charge, mortgage by conveyance,demise, assignment or sub-demise (if land in Northern Ireland);or

• (b) made under the terms of a regulated home purchase plan.

• (7) Except in the circumstances specified in paragraph (8) the charge under paragraph (6) (a) must not be by way of a Buy to Let Mortgage.

• (8) The circumstances specified in this paragraph are where the account investor is an individual described in regulation 10A(2)(f)(i) or (ii) who is unable to occupy the land as their only or main residence at the time of the acquisition but intends, in the future, to so occupy such land.

• (9) The account investor must—

• (a) on completion of the purchase occupy the land as their only or main residence; or

• (b) in consequence of the land comprising a residential property in the process of being constructed or adapted for use as a dwelling, on completion of the purchase must intend it to be their only or main residence and must occupy it as such on its becoming suitable for such use; or

• (c) in consequence of the account investor being an individual described in regulation 10A(2)(f)(i) or (ii), be unable to so occupy the land but must intend to do so in the future.

• (10) The withdrawal and, where there is more than one withdrawal made for the purposes of the purchase, the aggregate of them, must not exceed the purchase price on completion of the purchase.

• (11) The account investor’s Lifetime ISA from which the withdrawal is made must have been open for at least 12 months after the date of the first payment into it and, for this purpose, a Lifetime ISA opened in the circumstances provided for in regulation 12B(5) is to be treated as being the same Lifetime ISA as the one from which the moneys transferred or paid into the account originated.

• (12) The amount of the withdrawal must be passed directly by the account manager to the account investor’s conveyancer, who must be an eligible conveyancer.

• (13) The account investor must—

• (a) provide to their conveyancer the information specified in paragraph 8(1) together with the declaration specified in paragraph 8(3); and

• (b) procure that the conveyancer provide the information set out in paragraph (8)(2) to their account manager together with the declaration specified in paragraph 8(3).

• (14) Where the account manager has received all of the information specified in paragraph (13)(b) and has no reason to believe that the information and declarations are not true and complete, the account manager must transfer the amount of the withdrawal to the account investor’s conveyancer within the period stipulated under regulation 4(7).

Definitions for the purposes of paragraph 6

7

The following definitions apply for the purposes of paragraph 6—

• “Buy to Let Mortgage” means a loan made to one or more borrowers to be secured by a mortgage over a residential property that is—either —let at the date the mortgage is granted, orintended by the borrower or borrowers to be let either at that time or in the future, andmarketed as being intended for such purpose;

• “eligible conveyancer” means—in England and Wales, a conveyancer within the meaning of rule 217A of the Land Registration Rules 2003;in Scotland, a solicitor or advocate within the meaning of section 65 of the Solicitors (Scotland) Act 1980, or a conveyancing practitioner as defined in section 23 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990; orin Northern Ireland, a person enrolled as a solicitor of the Court of Judicature of Northern Ireland pursuant to the Solicitors (Northern Ireland) Order 1976;

• “first-time buyer” means an account investor who is not, and never has been, a residential property owner;

• “a legal interest in land” includes land which will be acquired under the terms of a regulated home purchase plan;

• “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 2007;

• “purchase price” means—in connection with the acquisition of any legal interest in land in circumstances other than those described in paragraph (b), (c) or (d), the value of the consideration required to be paid, and which is paid, by the purchaser under the sale and purchase agreement entered into in connection with the acquisition of that interest in land; orin connection with the acquisition of any legal interest in land under the terms of a regulated home purchase plan, the value of the consideration required to be paid, and which is paid, to the original seller for the interest in that land; orin connection with the acquisition of a legal interest in land by an individual who as a result of the acquisition becomes a joint owner of the land with another individual who previously owned the land, the market value of the whole of the land as determined at the time of the acquisition; orin connection with the acquisition of a leasehold legal interest in land under a shared ownership arrangement—the value determined in accordance with paragraph (a), orthe value of the premium required to be paid, and which is paid, by the purchaser under the sale and purchase agreement entered into in connection with the acquisition of that interest, divided by the fraction representing the share of the property to be acquired on completion by the purchaser in return for the premium (howsoever described in the sale and purchase agreement or the lease);

• “regulated home purchase plan” means a home purchase plan that is a regulated home purchase plan within the meaning of article 63F of the Regulated Activities Order 2001;