The Individual Savings Account Regulations 1998

General conditions for accounts and subscriptions to accountsU.K.

4.—[F1(1) An account is a scheme of investment, to which a subscription may be made, [F2which is an innovative finance account [F3or a Lifetime ISA] or in respect of which—]

(a)the conditions and requirements contained in paragraphs (1A) and (5) to (8) are fulfilled; and

(b)either—

(i)the conditions contained in paragraph (1B) are fulfilled, or

(ii)at the time when the subscription to the account is made, the account is a junior ISA account.]

[F4(1ZA) An innovative finance account is an account in respect of which—

(a)the conditions in paragraphs (1A)(a) and (ca); [F5(1B)(ba) and (c), d(i) and (e)]; (5); (6)(a), (e) and (g) are fulfilled;

(b)in relation to cash held in an account, the conditions in paragraphs (6)(f) and (fa) and (7) are fulfilled; and

(c)the application to open the account is made in accordance with regulation 12.]

[F6(1ZB) A Lifetime ISA is an account in respect of which—

(a)the conditions in paragraphs (1A)(a) and (cb), (1B)(bb), (c), (d)(ii), (e) and (f) and (5) to (10) are fulfilled; and

(b)the application to open the account is made in accordance with regulation 12B.]

[F7(1A) The conditions in this paragraph are—

(a)the account is set up as a stocks and shares account[F8, a cash account[F9, an innovative finance account or a Lifetime ISA]];

(b)a stocks and shares account is made up of a single stocks and shares component only;

(c)a cash account is made up of a single cash component only;

[F10(ca)an innovative finance account is made up of a single innovative finance component only;]

[F11(cb)a Lifetime ISA is made up of a single Lifetime ISA component only;]

(d)the application to open the account is made in accordance with regulation 12 or 12A.

(1B) The conditions in this paragraph are—

(a)[F12except for a subscription made in accordance with regulation 5D(2)(a)(i),(iv) or (v),] a qualifying individual who is 16 or over may only subscribe to a single cash account that is not a junior ISA account in a particular year;

(b)[F13except for a subscription made in accordance with regulation 5D(2)(a)(iv),] a qualifying individual who is 18 or over may only subscribe to a single stocks and shares account that is not a junior ISA account in a particular year;

[F14(ba)except for a subscription made in accordance with regulation 5D(2)(a)(iv), a qualifying individual who is 18 or over may only subscribe to a single innovative finance account in a particular year;]

[F15(bb)a Lifetime ISA qualifying individual may only make a qualifying addition to a single Lifetime ISA in a particular year;]

(c)it is an account to which only one qualifying individual subscribes [F16or, in the case of a Lifetime ISA, to which only one Lifetime ISA qualifying individual makes a qualifying addition];

[F17(d)subject to regulations 5DDA(2)(e) and 7(2)(h), it is—

(i)an account that is not a Lifetime ISA account to which the qualifying individual subscribes only by payment to the account manager of a sum or sums of the individual’s cash, or

(ii)a Lifetime ISA to which the Lifetime ISA qualifying individual makes qualifying additions only by—

(aa)payment to the account manager of a sum or sums of the individual’s cash; or

(bb)a transfer of qualifying investments for a Lifetime ISA component from another account of the account investor;]

(e)the subscriptions made by the qualifying individual to accounts (ignoring transfers and payments from account managers to the individual) do not in the aggregate in any year exceed the subscription [F18limit] in regulation 4ZA(1) F19... ][F20; and

(f)in the case of a Lifetime ISA the current year payments made by a Lifetime ISA qualifying individual do not in aggregate in any year exceed the Lifetime ISA payment limit in regulation 4ZA(1A).]

F21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F21(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F22(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) An account must at all times be managed in accordance with these Regulations by an account manager and under terms agreed in a recorded form between the account manager and the account investor.

(6) Apart from other requirements of these Regulations the terms agreed to which paragraph (5) refers shall [F23secure]—

[F24(a)that the account investments shall be in the beneficial ownership of—

(i)in the case of an account that is not a junior ISA account, the account investor; or

(ii)in the case of a junior ISA account, the named child;]

(b)that, except in relation to qualifying investments for a cash component within regulation 8(2)(a), (b) or (e) [F25and qualifying investments for an innovative finance component], and subject to regulation 15—

(i)[F26in relation to an account that is not a junior ISA account,] the title to all account investments shall be vested in the account manager or his nominee or jointly in one of them and the account investor,

[F27(ia)in relation to an account that is a junior ISA account, title to all investments shall be vested in the account manager or his nominee or jointly in one of them and either one of the registered contact or named child to the account in question as the account manager considers appropriate,] and

(ii)where a share certificate or other document evidencing title to an account investment is issued, it shall be held by the account manager or as he may direct;

(c)that, in relation to a stocks and shares component, [F28qualifying investments for an innovative finance component][F29, a Lifetime ISA component] [F30and qualifying investments falling within sub-paragraph (h) of regulation 8(2)], the account manager shall, if the account investor so elects, arrange for the account investor to receive a copy of the annual report and accounts issued to investors by every company, unit trust, open-ended investment company or other entity in which he has account investments;

(d)that, in relation to a stocks and shares component, [F31qualifying investments for an innovative finance component][F32, a Lifetime ISA component] [F33and qualifying investments falling within sub-paragraph (h) of regulation 8(2)], the account manager shall be under an obligation (subject to any provisions made under any enactment and if the account investor so elects) to arrange for the account investor to be able—

(i)to attend any meetings of investors in companies, unit trusts, open-ended investment companies and other entities in which he has account investments,

(ii)to vote, and

(iii)to receive, in addition to the documents referred to in sub-paragraph (c), any other information issued to investors in such companies, unit trusts, open-ended investment companies and other entities;

(e)that the account manager shall satisfy himself that any person to whom he delegates any of his functions or responsibilities under the terms agreed with the account investor is competent to carry out those functions or responsibilities;

(f)that [F34on the instructions of the account investor (“the transfer instructions”) and within such time as is stipulated by the account investor in the transfer instructions]—

(i)an account, with all rights and obligations of the parties to it, or

(ii)such parts thereof as may be agreed between the account investor and the account manager,

[F35shall] be transferred to another account manager subject to and in accordance with [F36regulation 21 or 21B] [F37and, where it applies, regulation 21A];

[F38(fa)that on the instructions, subject to regulation 9(3)(b), of the account investor (“the withdrawal instructions”) and within such time as is stipulated by the account investor in the withdrawal instructions, account investments, interest, dividends, rights or other proceeds in respect of such investments or any cash shall be transferred or paid to him [F39or, where paragraph 6(12) of the Schedule applies, an eligible conveyancer];]

(g)that the account manager shall notify the account investor if by reason of any failure to satisfy the provisions of these Regulations an account is or will become no longer exempt from tax by virtue of regulation 22(1).

[F40(7) The time stipulated in the transfer instructions or withdrawal instructions shall be subject to any reasonable business period of the account manager required for the practical implementation of the instructions, but such period—

(a)must not exceed 30 days; and

(b)must be consistent with regulation 21A where it applies.]

[F41Where the account is a Lifetime ISA and an amount is being withdrawn for the purpose of a first-time residential purchase by the account investor under paragraph 6 of the Schedule, the period of 30 days referred to in sub-paragraph (a) runs from the date on which the account manager receives the information from the account investor’s conveyancer in accordance with paragraph 8(2) and (3) of the Schedule.]

[F42(8) Where an account holds units in or shares of a UK UCITS, recognised UCITS or non-UCITS retail scheme, and dealings in the units or shares are suspended in accordance with Rule 7.2 of [F43COLL], or any direct foreign equivalent of that Rule, the business period in paragraph (7) may be extended to 7 days after the end of such suspension.]

[F44(9) A Lifetime ISA opened in accordance with regulation 12B is to be treated as such an account notwithstanding that the account investor reaches 50 years of age or over and that no further qualifying addition can be made to the account.

(10) A Lifetime ISA in relation to which an account manager has received notification of closure within 30 days after the latest applicable cancellation period start date for the purposes of the Conduct of Business Sourcebook (published by the Financial Conduct Authority under FISMA 2000) is to be treated for all purposes of these Regulations as never having been such an account.

(11) Where a Lifetime ISA is opened (“the new account”) on a transfer from another such account (“the original account”) of the account investor, the latest applicable cancellation period start date for the original account is to be treated for the purposes of paragraph (10) as the latest applicable cancellation start date for the new account.

(12) If during the year 2017-18 after the opening of a Lifetime ISA a withdrawal is made other than in any of the circumstances specified in paragraph (13) or described in paragraph 11 of the Schedule the account is to be treated for all purposes of these Regulations as never having been such an account.

(13) The circumstances specified in this paragraph are where—

(a)the withdrawal is by way of a transfer to another Lifetime ISA in accordance with regulation 21;

(b)the account investor is suffering from a terminal illness (within the meaning of paragraph 4(2) of the Schedule); or

(c)the withdrawal is made at a time after the account investor’s death.]