Citation and commencementU.K.

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

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

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

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

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

InterpretationU.K.

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

(a)“account", except in the case of—

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

F1(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(iv)a deposit account with [F2a person falling within section 840A(1)(b) of the Taxes Act], or a relevant European institution,

shall be construed in accordance with regulation 4(1) [F3and shall include a personal equity plan treated on and from the 6^th April 2008 as a stocks and shares account];

• an “account investment" is an investment under the account which is a qualifying investment for a stocks and shares component [F4or a cash component, as the case may be, within the meaning of regulation 7 or 8];

• an “account investor" is an individual who subscribes to an account and who is a qualifying individual within the meaning of regulation 10;

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

• [F5“approved SAYE option scheme” shall be construed in accordance with the SAYE code (see section 516(3) of ITEPA 2003);

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

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

• an “assurance undertaking" means an assurance undertaking within the meaning of [F6Article 6 of Directive 2002/83/EC of the European Parliament and of the Council of 5th November 2002 concerning life assurance];

• [F7“the Board” means the Commissioners for Her Majesty’s Revenue and Customs;]

• “building society" means a building society within the meaning of the Building Societies Act 1986 M3, or the Irish Building Societies Act 1989 M4;

• [F8“building society bonus”, except in regulation 22(1)(a)(i), excludes any bonus, distribution of funds or the conferring of rights in relation to shares—

  (a)

  in connection with an amalgamation, transfer of engagements or transfer of business of a building society, and

  (b)

  mentioned in section 96 or 100 of the Building Societies Act 1986,

  and “payment under a building society bonus scheme” shall be construed accordingly;.]

• [F9“ceasing to be subject to the plan”, in relation to plan shares under an approved SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003);]

• “company", except in regulation 7(4), means any body corporate having a share capital other than—

  (i)

  an open-ended investment company, within the meaning given by section [F10236 of the Financial Services and Markets Act 2000],

  (ii)

  [F11a UK UCITS, recognised UCITS or non-UCITS retail scheme,]

  (iii)

  an industrial and provident society, or

  (iv)

  a body corporate which is a 51 per cent. subsidiary of any industrial and provident society;

• [F12“credit union” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;]

• “deposit-taker" has the meaning given by [F13section 853 of ITA 2007];

• [F14“the Director of Savings” has the same meaning as in the National Debt Act 1972]

• “EEA Agreement" means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 M5, as adjusted by the Protocol signed at Brussels on 17th March 1993[F15, as modified or supplemented from time to time] M6;

• “EEA State" means a State, other than the United Kingdom, which is a Contracting Party to the EEA Agreement;

• [F16“European institution” means an EEA firm of the kind mentioned in paragraph 5(a), (b) or (c) of Schedule 3 to the Financial Services and Markets Act 2000 which is an authorised person for the purposes of that Act as a result of qualifying for authorisation under paragraph 12 of that Schedule;]

• “51 per cent. subsidiary" and “75 per cent. subsidiary" have the meanings given by section 838 of the Taxes Act;

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

• “gilt-edged securities" has the meaning given by [F17paragraphs 1 and 1A] of Schedule 9 to the Taxation of Chargeable Gains Act 1992;

• F18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• an “incorporated friendly society" means a society incorporated under the Friendly Societies Act 1992 M7;

• an “industrial and provident society" means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 M8 or under the Industrial and Provident Societies (Northern Ireland) Act 1969 M9;

• “investment trust" has the meaning given by section 842 of the Taxes Act M10F19...;

• [F20“ITA 2007” means the Income Tax Act 2007;

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

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

• F21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “the Management Act" means the Taxes Management Act 1970 M11;

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

• “notice", except in [F22regulations 9 and 36], means notice in writing and “notify" shall be construed accordingly;

• [F23“participant”, in relation to an approved SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003);

• “plan shares”, in relation to an approved SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003) except that—

  (a)

  paragraph 87(6) of Schedule 2 to ITEPA 2003 (meaning of the word “shares” in the context of company reconstructions) shall not apply, and

  (b)

  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;]

• “qualifying distribution" has the same meaning as in section 832(1) of the Taxes Act;

• “recognised stock exchange" has the same meaning as in section 841 of the Taxes Act;

• a “registered friendly society" has the meaning given by the Friendly Societies Act 1992 M12, and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society;

• “release date" has the meaning given by section 187(2) of the Taxes Act M13;

• “relevant authorised person" has the same meaning as in [F24section 697(2)(b) of ITTOIA 2005];

• “relevant European institution" has the meaning given by [F25section 697(2)(a) of ITTOIA 2005];

• F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “security", except in regulations [F277(2)(c) to] [F28(cc) and (8)(b), 8(2)(f)] and 34(3), means any loan stock or similar security of a company whether secured or unsecured[F29, and in regulation 7(2)(cc) has the same meaning but with the omission of the words “of a company”];

• [F30“the Stakeholder Products Regulations” means the Financial Services and Markets Act 2000 (Stakeholder Products) Regulations 2004;]

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

• “tax credit" means a tax credit under section 231 of the Taxes Act M14;

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

• F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(b)

• [F32“authorised fund” means—

  (i)

  an authorised unit trust, or

  (ii)

  an open-ended investment companyF33...;]

• “authorised unit trust" means a unit trust scheme in the case of which an authorisation order made by the Financial Services Authority under section [F34243 of the Financial Services and Markets Act 2000] is in force;

• F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F36“collective investment scheme” has the meaning in section 235 of FISMA 2000;]

• [F37“the Collective Investment Schemes Sourcebook” means the sourcebook of that name made by the Financial Services Authority under the Financial Services and Markets Act 2000;]

• [F38“depositary interest” means the rights of the person mentioned in paragraph (b), under a certificate or other record (whether or not in the form of a document) acknowledging—

  (a)

  that a person holds relevant investments or evidence of the right to them, and

  (b)

  that another person is entitled to rights in or in relation to those or identical relevant investments, including the right to receive such investments, or evidence of the right to them or the proceeds from such investments, from the person mentioned in paragraph (a),

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

• F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F36“FISMA 2000” means the Financial Services and Markets Act 2000;]

• F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F40“non-UCITS retail scheme”—

  (a)

  has the meaning in the F41... Collective Investment Schemes Sourcebook (that is, a scheme to which, or to whose authorised fund manager and depositary, [F42COLL 5.1, 5.4 and 5.6] apply),

  (b)

  includes a “recognised scheme” by virtue of section 270 or 272 of the Financial Services and Markets Act 2000, which would fall within paragraph (a) of this definition if it were an authorised fund, and

  (c)

  includes a sub-fund of an umbrella which the terms of the scheme identify as a sub-fund which would fall within paragraph (a) or (b) of this definition if it were itself an authorised fund or a recognised scheme.

  In this definition, expressions defined in the Glossary forming part of the Financial Services Authority Handbook have those defined meanings;]

• [F43“open-ended investment company” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies;]

• [F40“qualifying units in or shares of a non-UCITS retail scheme” means that—

  (a)

  the instrument constituting the scheme secures that redemption of the units or shares in question shall take place no less frequently than bi-monthly (see Rule 6.2.16(6) of the F44... Collective Investment Schemes Sourcebook omitting the words “Except where (7) applies, and”, read with Rule 6.3.4(1), whether or not those Rules apply to the scheme), and

  (b)

  a provision for suspension of dealings in exceptional conditions in accordance with Rule 7.2 of that Sourcebook (or any foreign procedure which is a direct foreign equivalent of that Rule) shall not be treated as a provision contrary to paragraph (a) of this definition;]

• [F45“recognised UCITS” means—

  (a)

  a collective investment scheme constituted in an EEA State, which is a “recognised scheme” under section 264 of FISMA 2000, and complies with the requirements to be a “UCITS scheme” for the purposes of the Collective Investment Schemes Sourcebook (see in particular COLL 1.2.2); or

  (b)

  a part of a recognised UCITS mentioned in paragraph (a) of this definition, which would be a sub-fund of an umbrella scheme which is a recognised UCITS;]

• F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F36“UK UCITS” means—

  (a)

  a collective investment scheme authorised under section 31(1)(a) of FISMA 2000, which complies with the requirements to be a “UCITS scheme” for the purposes of the Collective Investment Schemes Sourcebook (see in particular COLL 1.2.2); or

  (b)

  a part of a UK UCITS mentioned in paragraph (a) of this definition which would be a sub-fund of an umbrella scheme which is a UK UCITS;]

• [F47“umbrella scheme” means an authorised fund which according to the terms of the scheme is an umbrella scheme belonging to the category under that name established by the Financial Services Authority, and

  (i)

  in the case of an authorised fund which is an authorised unit trust, references to a part of an umbrella scheme shall be construed in accordance with subsection (8) of section 468 of the Taxes Act, [F48and sub-paragraphs (6) and (7) of regulation 7 of the Authorised Investment Funds (Tax) Regulations 2006 shall apply for the purposes of these Regulations as they apply for the purposes of those Regulations, and]

  (ii)

  in the case of an authorised fund which is an open-ended investment company, references to a part of an umbrella scheme shall be construed in accordance with [F49subsection (4) of section 468A of the Taxes Act, and sub-paragraphs (2) and (3) of regulation 7 of the Authorised Investment Funds (Tax) Regulations 2006 shall apply for the purposes of these Regulations as they apply for the purposes of those Regulations;]]

• [F50“unit holder” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme;]

• [F50“unit trust scheme” has the meaning given by section 237 of the Financial Services and Markets Act 2000;]

• “units", in relation to an authorised unit trust, means the rights or interests (however described) of the unit holders in that authorised unit trust and, in relation to a part of an umbrella scheme, means the rights or interests for the time being of the unit holders in that part;

• “units in, or shares of, a F51... [F52UK UCITS or recognised] UCITS" means the rights or interests (however described) of the holders of the units or shares in that F51... [F52UK UCITS or recognised] UCITS;

• F53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The Table below indexes other definitions in these Regulations:

IntroductoryU.K.

3.  These Regulations provide for the setting up of plans in the form of an account, by account managers approved by the Board, under which individuals may make certain investments, for the conditions under which they may invest and under which those accounts are to operate, for relief from tax in respect of account investments and generally for the administration of tax in relation to such accounts.

General conditions for accounts and subscriptions to accountsU.K.

4.—(1) An account is a scheme of investment, to which an individual who is a qualifying individual may subscribe, and in respect of which the following conditions must be fulfilled—

[F58(a)the account is set up as a stocks and shares account or a cash account;]

[F58(b)a stocks and shares account is made up of a single stocks and shares component only;]

[F58(c)a cash account is made up of a single cash component only;]

[F58(d)a qualifying individual who is 16 years of age or over may only subscribe to a single cash account in a particular year,]

[F58(e)a qualifying individual who is 18 years of age or over may only subscribe to a single stocks and shares account in a particular year;]

[F58(f)it is an account to which only one qualifying individual subscribes;]

[F58(g)subject to regulation 7(2)(h), it is an account to which the qualifying individual subscribes only by payment to the account manager of a sum or sums of the individual’s cash; and]

[F58(h)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 limits in paragraphs (2) and (3).]

[F59(2) The overall subscription limit for any qualifying investor for any year (that is, the aggregate of the investor’s subscriptions to all accounts in that year) is [F60£10,200]—

(a)[F61the qualifying investor is 50 years of age or over, or is due to be aged 50 not later than 5^th April 2010, where it is £10,200, or]

(b)the qualifying investor is 16 years of age or over but less than 18 years at the end of the year, where it is [F62£5,100].]

[F59(3) Within and subject to that overall subscription limit, the qualifying investor may subscribe up to [F63£5,100] in any year to a cash account[F64, unless the qualifying investor is 50 years of age or over, or is due to be aged 50 not later than 5^th April 2010, when he or she may invest £5,100 in the year 2009-10.].]

[F59(4) Accordingly, by way of illustration, the qualifying investor [F65(who is not aged 50 or over, or due to be aged 50 not later than 5^th April 2010)] may subscribe in a year—

(a)[F66£5,100] to a cash account and [F66£5,100] to a stocks and shares account;

(b)£2,000 to a cash account and [F67£8,200] to a stocks and shares account; or

(c)nil to a cash account and [F68£10,200] to a stocks and shares account;

but while under the age of 18 years the qualifying investor may only subscribe [F69£5,100] to a cash account.]

(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 include the following conditions—

(a)that the account investments shall be in the beneficial ownership of the account investor;

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

(i)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, 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, and qualifying investments falling within [F70paragraphs (g), (h), (k), (l) and (m) 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, and qualifying investments falling within [F70paragraphs (g), (h), (k), (l) and (m) 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 [F71on 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,

[F72shall] be transferred to another account manager subject to and in accordance with regulation 21;

[F73(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;]

(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).

[F74(7) The time stipulated in transfer instructions or withdrawal instructions shall be subject to any reasonable business period (not exceeding 30 days) of the account manager required for the practical implementation of the instructions.]

[F75(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 the Collective Investment Schemes Sourcebook (COLL 7.2), 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.]

[F76Repair of certain incompatible accounts [F77and excess subscriptions] U.K.

4A.—(1) An invalid account is “eligible for repair” if, in relation to the year in which the subscriptions to the account were made (“the relevant year”), it satisfies—

[F78(a)both the First and Second Conditions below, or

(b)the Third Condition.

• First Condition

  The account is invalid because a subscription to the account causes the account investor to breach the conditions in regulation 4(1)(d) or (e) (which, taken together, allow an individual to subscribe to a single cash account and a single stocks and shares account, in a particular year) and for no other reason.

• Second Condition

  The account is (disregarding any account exempt from tax under regulation 4B) the earliest account in the relevant year, the subscriptions to which caused the account investor to breach the conditions in regulation 4(1)(d) or (e), as the case may be (that is, it was first subscribed to earlier in that year than any other such account).

• Third Condition

  The account is invalid because a subscription to the account breaches the overall subscription limit in regulation 4(2)(a), and for no other reason.]

(2) In this regulation—

(a)where an account investor subscribes to a particular account in more than one year, each year’s subscriptions shall be treated as a separate account for the purposes of this regulation, and regulation 4B (except for determining when an account is closed) only;

(b)“date of discovery” means the date on which an officer of the Board gives a notice (“notice of discovery”) to the account manager or account investor that the account is invalid, and (if appropriate) directions under paragraph (5) below;

F79(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)“valid account” means an account which (apart from under this regulation) is exempt from tax under regulation 22(I);

(e)“invalid account” means a scheme of investment which is not exempt from tax under these Regulations but which (if so exempt) would be an account, within the meaning in regulation 4(1)(a) and, in relation to an invalid account, references to an account [F80and component] have corresponding meanings; and

(f)(for the avoidance of doubt) “repair” of an account is without prejudice to loss of, and accounting to the Board for, any relief from tax given for the period up to the date of discovery.

(3) An invalid account which is eligible for repair shall be treated as—

(a)exempt from tax under this regulation (as if under regulation 22), and

(b)complying with the conditions of regulation [F814(1)(d) or (e), or 4(2)(a)], as the case may be,

as from the date of discovery, to the extent of the relevant proportion mentioned in paragraph (4)(b).

(4) [F82(a) Calculate the extent to which the subscriptions made (and counting towards the subscription limits) during the relevant year—

(i)to that account, any other account which is eligible for repair, and any valid account (but ignoring subscriptions to any closed account within the meaning in regulation 4B)) do not exceed,

(ii)the subscriptions limits in regulation 4(2) and (3), as the case may be, and]

(b)an officer of the Board shall apportion that result between the accounts mentioned in sub-paragraph (a)(i), and the amount apportioned to the account mentioned in paragraph (3) is the relevant proportion.

(5) The account manager must comply within 30 days with any directions in the notice of discovery which—

(a)make the apportionment under paragraph (4)(b) and identify the account and component from which excess subscriptions or allocations (if any) are to be removed;

(b)direct the removal of subscriptions and proceeds representing them from an account; or

(c)direct the removal of subscriptions and proceeds representing them from a component.]

[F83Closure of [F84cash] account prior to the opening of the same type of account to be disregarded onceU.K.

4B.—(1) Where—

(a)an account investor, within the same year—

(i)subscribes to a [F85cash] account,

(ii)then closes it (“the closed account”), and

(iii)subsequently first subscribes to another [F86cash account], and

(b)the closed account was (apart from under this regulation) exempt from tax under regulation 22(1),

the earliest account in that year to fall within the terms of sub-paragraph (a)(iii) (the “first later account”) shall be eligible for the relief in paragraph (2).

(2) The first later account shall be treated, as from the date of the first subscription to it mentioned in paragraph (1)(a)(iii) [F87as complying with the conditions of regulation 4(1)(d)] in the same manner as the closed account.

(3) In this regulation, an account is closed where—

(a)the account investor withdraws from the account all account investments, other proceeds in respect of such investments and cash, representing subscriptions to the account (and closure shall be treated as occurring at the date of such withdrawal), and

(b)no further subscriptions to the account are made during the remainder of the year, after such withdrawal.]

[F88Removal of insurance components at 6th April 2005U.K.

4C.—(1) This regulation applies to accounts which include (or are made up of) an insurance component immediately before 6th April 2005 (“the transitional time”).

(2) Where all the policies of life insurance falling within regulation 9, held under the component at the transitional time, were issued in respect of an insurance made before 6th April 2004, the component—

(a)if the account is, or had been, designated as a maxi-account, shall be treated on and from 6th April 2005 as merged into the stocks and shares component for that account; and

(b)if the account is, or had been, designated as a mini-account, shall be treated on and from 6th April 2005 as a stocks and shares component of the same account.

(3) Where any of the policies of life insurance falling within regulation 9, held under the component at the transitional time, were issued in respect of an insurance made on or after 6th April 2004—

[F89(a)the condition in regulation 7(15) shall be applied to those policies on 6th April 2005, modified as if for “the date” to “five years” there were substituted “6th April 2005”;]

(b)if all those policies satisfy that condition, paragraph (2)(a) or (b), as the case may be, shall apply to the component;

(c)if any of those policies does not satisfy that condition, the component—

(i)if the account is, or had been, designated as a maxi-account including a cash component, shall be treated on and from 6th April 2005 as merged into the cash component for that account; and

(ii)in any other case, shall be treated on and from 6th April 2005 as a cash component for the same account.]

[F90Removal of maxi-accounts, mini-accounts and TESSA only accounts at 6^th April 2008U.K.

4D.—(1) This regulation applies to accounts in existence immediately before 6^th April 2008 (“the transitional time”).

(2) An account that, at the transitional time, is or has been designated as a TESSA only account shall be treated as a cash account on and from 6^th April 2008.

(3) An account that, at the transitional time, is or has been designated as a mini-account made up of a cash component shall be treated as a cash account on and from 6^th April 2008.

(4) An account that, at the transitional time, is or has been designated as a mini-account made up of a stocks and shares component shall be treated as a stocks and shares account on and from 6^th April 2008.

(5) An account that, at the transitional time, is or has been designated as a maxi-account and is made up of a stocks and shares component only, shall be treated as a stocks and shares account on and from 6^th April 2008.

(6) Where an account, at the transitional time, is or has been designated as a maxi-account and is made up of two components—

(a)the stocks and shares component, if it holds investments or cash at the transitional time, shall be treated as a stocks and shares account on and from 6^th April 2008; and

(b)the cash component, if it holds investments or cash at the transitional time, shall be treated as a separate cash account on and from 6^th April 2008.]

[F91Treatment of sums held in accounts managed by Icesave BankU.K.

5A.—(1) This regulation applies if—

(a)at 8th October 2008, an account investor had an investment in an account (“the Icesave account”) for which the account manager was Landsbanki Islands hf (trading as Icesave);

(b)compensation is paid in respect of that investment by (or through) the Financial Services Compensation Scheme; and

(c)the account investor receives from the Financial Services Compensation Scheme a certificate containing the following information—

(i)the account investor’s full name;

(ii)his or her permanent address, including postcode;

(iii)his or her date of birth;

(iv)his or her national insurance number (if any);

(v)the Icesave account number;

(vi)the date on which the account was suspended;

(vii)the amount in the account (capital and interest) at the date of suspension;

(viii)the date of the first subscription (if any) to the account in the year 2008-09; and

(ix)the aggregate of the subscriptions made to the account in the year 2008-09 on or before 8th October 2008 (“current year subscriptions”).

(2) Where this regulation applies, the account investor may, not later than 5^th October 2009, make a single subscription to an account held by him or her with another account manager (“the receiving account”), giving the certificate to the account manager, in accordance with the following paragraphs.

(3) Where the subscription to the receiving account is made during the year 2008-09, the amount subscribed under this regulation may not exceed:

• X minus Y

• where X is the closing balance in the Icesave account (see paragraph (1)(c)(vii)), and

• Y is the amount (if any) by which the aggregate of—

  (a)

  the current year subscriptions (if any) made to the Icesave account (see paragraph (1)(c)(ix)), and

  (b)

  the subscriptions (if any) made to the receiving account by the account investor in the year 2008-09 (ignoring the subscription made under this regulation),

  would otherwise exceed the subscription limit for the year 2008-09 in regulation 4(3).

Paragraphs (4) to (6) shall also apply to a subscription made under this regulation during the year 2008-09.

(4) The subscription made under this regulation shall only count towards the subscription limit in regulation 4(3) to the extent that the current year subscriptions (if any) made to the Icesave account exceed Y (or where there is no amount for Y, exceed nil).

(5) Where the receiving account is a stocks and shares account—

(a)the references in paragraphs (3) and (4) to the subscription limit in regulation 4(3) shall be read as references to the subscription limit in regulation 4(2); and

(b)the current year subscriptions (if any) made to the Icesave account shall be treated, for all purposes including regulation 31(3)(c), as if they had been made to the stocks and shares account, and accordingly shall not count towards the cash subscription limit in regulation 4(3).

(6) The account manager for the receiving account must—

(a)in the case of a subscription made under this regulation to the account in the year 2008-09, treat the subscription in the same way as an account transferred from another account manager to him during the year 2008-09; and

(b)retain either the certificate mentioned in paragraph (2), or a copy of it.

(7) Where the subscription to the receiving account is made during the year 2009-10 (but not later than 5th October 2009), the amount subscribed under this regulation—

(a)may not exceed X (see paragraph (3)), and

(b)shall not count towards the subscription limits in regulation 4(2) or (3),

and paragraph (6) (omitting sub-paragraph (a)) shall also apply to that subscription.]

[F92Treatment of certain sums held in accounts managed by Keydata Investment Services LimitedU.K.

5B.—(1) This regulation applies if—

(a)at 8^th June 2009, an account investor had an account holding SLS Capital S.A. Secure Income Bonds, issue 1, 2 or 3 (“the Bonds”), for which the account manager was Keydata Investment Services Limited (“Keydata”) which went into administration on that date;

(b)the investor has received from the Administrators of Keydata a certificate containing the following information—

(i)the investor’s full name and permanent residential address, including postcode;

(ii)the investor’s Keydata client reference number;

(iii)the date of investment in the Bonds;

(iv)the amount (if any) subscribed in cash;

(v)the amount (if any) subscribed by an ISA transfer;

(vi)the total amount subscribed (for investment in the Bonds); and

(vii)the maximum amount that can be reinvested using the certificate.

(2) Where this regulation applies, the account investor may make a single subscription to a stocks and shares account held by him or her with another account manager—

(a)not exceeding the maximum stated in the certificate under paragraph (1)(b)(vii);

(b)not later than 5^th April 2011; and

(c)giving the certificate to the new account manager.

(3) The subscription made under this regulation shall not count towards the subscription limits in regulation 4(2).

(4) The new account manager must—

(a)treat the subscription made under this regulation in the same way as an account transferred from another account manager to him; and

(b)retain either the certificate mentioned in paragraph (1)(b), or a copy of it.]

Transfers from matured tax-exempt special savings accountsU.K.

F935.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General investment rulesU.K.

6.—(1) All transactions by way of purchase by an account manager of investments under an account shall be made—

[F94(a)in the case of an authorised fund which is a dual priced unit trust, at the manager’s price for the sale of the relevant class of units within the meaning of, and complying with the requirements of, [F95rules 6.3.5 and 6.3.5B of the Collective Investment schemes sourcebook];]

[F94(b)in the case of an authorised fund which is a single priced unit trust or an open-ended investment company, at the price of a unit or share within the meaning of, and complying with the requirements of, [F96rules 6.3.5 and 6.3.5A of the Collective Investment schemes sourcebook]; and]

(c)in the case of all other account investments, at the price for which those investments might reasonably be expected to be purchased in the open market.

[F97(1ZA) In paragraph (1)(a) and (b)—

F98...

“a dual priced unit trust” means an authorised unit trust in respect of which the manager gives different prices for buying and selling units at the same time;

“a single priced unit trust” means an authorised unit trust in respect of which the manager gives the same price for buying and selling units at the same time.]

(2) All other transactions by way of sale or otherwise by an account manager in investments under an account shall be made at the price for which those investments might reasonably be expected to be sold or otherwise transacted, as the case may be, in the open market.

(3) Investments, or rights in respect of investments, may not at any time—

(a)be purchased or made otherwise than out of cash which an account manager holds under an account [F99and component], for which those investments or rights are qualifying investments; or

(b)be purchased from—

(i)an account investor, or

(ii)the spouse [F100or civil partner] of an account investor,

so as to become account investments under an account to which the account investor subscribes or has subscribed.

(4) Subject to paragraphs (5) and (6), an account investor’s cash subscription and any other cash held by an account manager under an account shall be held only in sterling and be deposited in—

(i)an account with a deposit-taker [F101(including for this purpose a credit union)], or a deposit account or a share account with a building society, or

(ii)in the case where the account manager is [F102the Director of Savings], an account with [F102the Director of Savings],

which is designated as an ISA account for the purposes of these Regulations only.

(5) An account manager who is a European institution, a relevant authorised person or an assurance undertaking may hold an account investor’s cash subscription and other cash held under an account in the currency of the EEA State in which he has his principal place of business and may deposit such cash in an account, which is designated as mentioned in paragraph (4), with any person authorised under the law of that State to accept deposits.

(6) Cash by way of dividends, interest, distributions, and other rights or proceeds in respect of qualifying investments for any [F103account] shall at all times be recorded and accounted for separately from that for any other [F103account], and may be invested only—

(a)in qualifying investments for the [F104appropriate] component; or

(b)by way of cash deposit in accordance with paragraphs (4) and (5).

Qualifying investments for a stocks and shares componentU.K.

7.—(1) This regulation specifies the kind of investments (“qualifying investments for a stocks and shares component") which may be purchased, made or held under a stocks and shares component, and in this regulation and regulations 31 and 34, “shares" without more includes stock.

(2) Qualifying investments for a stocks and shares component to which paragraph (1) refers are—

(a)shares, not being shares in an investment trust[F105—

(i)issued by a company wherever incorporated,

(ii)subject to paragraph (3), officially listed on a recognised stock exchange, and

(iii)in circumstances where the shares in question satisfy the condition specified in paragraph (15), or were held under the component on 6th October 2005;]

(b)securities (“qualifying securities")—

(i)issued by a company wherever incorporated,

[F106(ii)where the securities in question satisfy—

(a)at least one of the conditions specified in paragraph (5), [F107and]

(b)the condition specified in paragraph (6),] F108...

F108(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii)in the case of securities of an investment trust, purchased or acquired by the account manager in circumstances where the trust satisfies the conditions specified in [F109paragraph] (8);

[F110(c)gilt-edged securities which satisfy the condition specified in paragraph (12);

(ca)any securities issued by or on behalf of a government of any EEA State, which satisfy the condition specified in paragraph (12);

(cb)any securities which–

(i)in relation to a security mentioned in sub-paragraph (ca), would be a strip of that security if “strip” had the same meaning as in section 47 of the Finance Act 1942, with the omission of the words “issued under the National Loans Act 1968”, and

(ii)satisfy the condition specified in paragraph (12);]

[F111(cc)securities issued by a multilateral institution, contributions to which may be reported as official development assistance, listed in Part I of Annex 2 to the DAC Statistical Reporting Directive (approved by the Development Assistance Committee of the Organisation for Economic Co-operation and Development), where the securities satisfy the conditions in paragraphs (5)(b) and (6);]

(d)shares in an investment trust, listed in the Official List of the Stock Exchange, in circumstances where the trust satisfies the conditions specified in [F112paragraph] (8);

F113(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)units in, or shares of, a [F114UK UCITS or recognised UCITS], in circumstances where the [F115units or shares satisfy the condition specified in paragraph (15)];

[F116(g)qualifying units in or shares of a non-UCITS retail scheme, in circumstances where the units or shares satisfy the condition specified in paragraph (15);]

(h)subject to the conditions specified in paragraph (10)[F117—

(i)shares which the qualifying individual has exercised the right to acquire in accordance with the provisions of [F118an approved SAYE option scheme],

(ii)shares which have been appropriated to the qualifying individual in accordance with the provisions of an approved profit sharing scheme, or

(iii)plan shares of an approved [F119SIP] which cease to be subject to the plan but have remained in the beneficial ownership of the participant,]

and such shares shall be treated as fulfilling the condition as to payment of cash in regulation 4(1)(h);

[F120(ha)a depositary interest;]

(j)cash deposited in accordance with regulation 6(4) to (6) which an account manager holds for the purpose of investment in investments which are qualifying investments for a stocks and shares component.

[F121(k)investments which—

(i)were held under a stocks and shares component [F122or a personal equity plan] on 28th November 2001,

(ii)on that date were admitted to trading on a recognised stock exchange in an EEA State and were not listed by a competent authority in an EEA State for the purposes of Council Directive 2001/34,

(iii)since that date have not ceased to be so admitted and have not become so listed,

(iv)do not fall within any of the other sub-paragraphs of this paragraph, and

(v)are not investments which, having fallen within any of those sub-paragraphs, have ceased so to fall on or after that date.]

[F123(l)investments which—

(i)were held under the stocks and shares component [F124or a personal equity plan] on 6th April 2004; and

(ii)immediately before that date, fell within sub-paragraphs (e), (f) or (g), or sub-paragraph (ha) so far as the relevant investments (within the meaning in the definition of “depositary interest”) fell within any of those sub-paragraphs.]

[F125(m)units in a relevant collective investment scheme specified as a stakeholder product by regulation 5 of the Stakeholder Products Regulations, in circumstances where the units satisfy the condition in paragraph (15);

(n)policies of life insurance falling within regulation 9, issued in respect of an insurance made on or after 6th April 2005, in circumstances where the policy satisfies the condition in paragraph (15);

(o)policies of life insurance falling within regulation 9, issued in respect of an insurance made before—

(i)6th April 2004, in a case where regulation 4C(2)(a) or (b) applies, or

(ii)6th April 2005, in a case where regulation 4C(3)(b) applies.]

[F126(p)in the case of a personal equity plan which is treated on and from 6^th April 2008 as a stocks and shares account, investments which, immediately before that date, were qualifying investments for the plan under regulation 6(2)(m) of the Personal Equity Plan Regulations 1989;]

(3) An investment in shares fulfils the condition as to official listing in paragraph (2)(a) or (d) if—

(a)in pursuance of a public offer, the account manager applies for the allotment or allocation to him of shares in a company or trust which are due to be admitted to such listing within 30 days of the allocation or allotment, and which, when admitted to such listing, would be qualifying investments for a stocks and shares component, and

(b)the shares are not allotted or allocated to the account manager in the circumstances specified in paragraph (4).

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

(a)the allotment or allocation of the shares was connected with the allotment or allocation of—

(i)shares in the company or trust of a different class, or

(ii)rights to shares in the company or trust of a different class, or

(iii)shares or rights to shares in another company or trust, or

[F127(iv)units in or shares in, or rights to units in or shares in, an authorised fund or a part of an umbrella scheme[F128, or]]

(vi)securities or rights to securities of the company or trust, or of another company or trust,

to the account manager, the account investor or any other person; and

(b)the terms on which the first-mentioned shares in this paragraph were offered were significantly more favourable to the account manager or account investor than they would have been if their allotment or allocation had not been connected as described in sub-paragraph (a).

(5) The conditions specified in this paragraph are—

(a)that the shares in the company issuing the securities are listed on the official list of a recognised stock exchange;

(b)that the securities are so listed;

(c)that the company issuing the securities is a 75 per cent. subsidiary of a company whose shares are so listed.

(6) The condition specified in this paragraph is that, judged at the date when each of the securities is first held under the account, the terms on which it was issued do not—

(a)require the loan to be repaid or the security to be re-purchased or redeemed, or

(b)allow the holder to require the loan to be repaid or the security to be repurchased or redeemed except in circumstances which are neither certain nor likely to occur,

within the period of five years from that date.

F129(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) The condition specified in this paragraph is that not more than 50 per cent. in value of the investments of the [F130investment trust] are [F131either–

(a)securities which would not be qualifying securities, or

(b)securities which would not fall within any of sub-paragraphs (c) to (cb) of paragraph (2),

if paragraph (6), or paragraph (6) as it applies with the modifications in paragraph (12), as the case may be,] required the terms on which they were issued to be judged at the date when they first became investments of the [F132investment trust].

F133(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) The conditions specified in this paragraph are—

(a)in relation to shares which the individual has exercised his right to acquire in accordance with the provisions of [F134an approved SAYE option scheme], that the shares are transferred to the account manager or his nominee before the expiry of the period of 90 days following the exercise of that right;

(b)in relation to shares appropriated to the individual in accordance with the provisions of an approved profit-sharing scheme, that the shares are transferred to the account manager or his nominee before the expiry of the period of 90 days following the date when the individual directed the trustees to transfer the ownership of the shares to him or, if earlier, the release date in relation to the shares;

[F135(ba)in relation to plan shares mentioned in paragraph (2)(h)(iii), that the shares are transferred to the account manager or his nominee before the expiry of the period of 90 days following the date when the plan shares ceased to be subject to the plan;]

(c)that the aggregate market value at the date of transfer of any shares transferred to the account manager or his nominee in accordance with sub-paragraphs [F136(a), (b) or (ba)] in any year, and the individual’s cash subscriptions in that year [F137to that account, do not together exceed the overall subscription limit in regulation 4(2)(a) in that year, reduced by the subscriptions by the individual in that year to a cash account].

(11) In paragraph (4)(a), “company" means any body corporate having a share capital.

[F138(12) The condition specified in this paragraph is the condition specified in paragraph (6), omitting sub-paragraph (b) of that paragraph and the word “or” after sub-paragraph (a).]

[F139(13) The references to “shares” in paragraphs (2)(h) and (10) shall include references to a depositary interest where the relevant investments in question (referred to in paragraphs (a) and (b) of the definition of “depositary interest”) are shares falling within both paragraphs (2)(h) and (10).]

[F140(14) Qualifying investments for a stocks and shares component falling within sub-paragraph (ha) of paragraph (2), so far as the relevant investments (within the meaning given in the definition of “depositary interest”) fall within any of sub-paragraphs [F141(a), F142...] F143... (f)[F144or (g)] of that paragraph, must satisfy the condition specified in paragraph (15).

[F145(15) The condition specified in this paragraph is that, judged at the date on which the qualifying investments in question become held in the account (and having regard to the contractual terms and conditions then in existence) the account investor will not be entitled to a secured minimum return at any time falling within the following 5 years. The account investor is entitled to a secured minimum return if—

(a)the contract under which the investments were acquired, or any other transaction entered into by the account investor or any other person, or

(b)the nature of the underlying subject matter of the investments,

have the effect that the account investor is not exposed, or not exposed to any significant extent, to the risk of loss from fluctuations in the value of the investments exceeding 5% of the capital consideration paid or payable for the acquisition of those investments.]

(16) In this regulation references, in relation to qualifying investments, to—

(a)the underlying subject matter are references to or to the value of the investments, currencies or other matters to which, or to the value of which, those qualifying investments or their value is referable [F146, and in the case of a policy of life insurance, under whose terms some or all of the benefits are determined by reference to fluctuations in, or in an index of, the value of any property of any description (whether or not specified in the policy or contract), that property or that index];

(b)the capital consideration paid [F147or payable include premiums paid or payable under a policy of life insurance, and] include the incidental costs of acquisition; and

(c)the value are to be construed applying regulation 6(2), but deducting the incidental costs that would be incurred by a disposal [F148and, in the case of a policy of life insurance, omitting any benefits payable in the event of the death of the account investor].]

[F149(17) Where a policy of life insurance confers on the person to whom it is issued an option to have another policy issued for it or to have any of its terms changed, the condition in paragraph (15) shall only be satisfied if it would also be satisfied if each or any of the changes capable of being made in pursuance of such an option had been made.]

Qualifying investments for a cash componentU.K.

8.—(1) This regulation specifies the kind of investments (“qualifying investments for a cash component") which may be purchased, made or held under a cash component.

(2) Qualifying investments for a cash component to which paragraph (1) refers are, subject to paragraph (3)—

[F150(a)cash deposited in a deposit account with—

(i)a building society,

(ii)a credit union,

(iii)a person within subsection (2)(b) of section 991 of the Income Tax Act 2007 (read with subsection (3) of that section), or

(iv)a relevant European institution;]

(b)cash deposited in a share account with a building society;

F151(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F151(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F152(e)such investment deposits with the National Savings Bank which, according to the terms and conditions subject to which they are made, are expressly permitted to be held under a cash component of an account;

(f)any securities issued under the National Loans Act 1968–

(i)for the purpose of or in connection with raising money under the auspices of the Director of Savings within the meaning of section 11(1)(a) of the National Debt Act 1972, and

(ii)other than national savings certificates, premium savings bonds, national savings stamps and national savings gift tokens,

which, according to the terms and conditions subject to which they are issued and purchased, are expressly permitted to be held under a cash component of an account.]

[F153(g)investments falling within sub-paragraphs [F154(a), F155...] F156... (f) [F157or (g)] of regulation 7(2), in circumstances where the unitsF155... or shares do not satisfy the condition specified in regulation 7(15);

(h)a depositary interest (with the references in that definition to a stocks and shares component and to regulation 7(2)(a) to (h) being replaced with references to a cash component and to regulation 8(2)(a) to (g)).]

[F158(j)a deposit account specified as a stakeholder product by regulation 4 of the Stakeholder Products Regulations;

(k)units in a relevant collective investment scheme specified as a stakeholder product by regulation 5 of the Stakeholder Products Regulations, in circumstances where the units do not satisfy the condition in regulation 7(15);

(l)policies of life insurance, falling within regulation 9, issued in respect of an insurance made on or after 6th April 2005, in circumstances where the policy does not satisfy the condition in regulation 7(15);

(m)policies of life insurance, falling within regulation 9, issued in respect of an insurance made before 6th April 2005, in a case where regulation 4C(3)(c)(i) or (ii) applies.]

[F159(n)arrangements falling within section 47 of the Finance Act 2005 (alternative finance arrangements) under which the person referred to in that section as Y is a financial institution;

(o)arrangements falling within section 49 of that Act.]

(3) A deposit account or share account which is a qualifying investment for a cash component falling within paragraph (2)(a) or (b) respectively must not be connected with any other account falling within the descriptions in those sub-paragraphs, held by the account investor or any other person, and for this purpose such an account is connected with another if—

(a)either was opened with reference to the other, or with a view to enabling the other to be opened on particular terms, or with a view to facilitating the opening of the other on particular terms, and

(b)the terms on which the first-mentioned account in this paragraph was opened would have been significantly less favourable to the holder if the other had not been opened.

[F160Insurance policies]U.K.

9.—[F161(1) Policies referred to in regulation 7(2)(n) or (o) or 8(2)(l) or (m) must, subject to compliance with paragraphs (4) to (7), satisfy the conditions specified in paragraph (3).]

[F161(2) In paragraph (1) “policies” includes rights under a linked long-term contract specified as a stakeholder product by regulation 6 of the Stakeholder Products Regulations.]

(3) The conditions specified in this paragraph are that—

(a)the insurance is on the life of the account investor only;

(b)the terms and conditions of the policy provide—

(i)that the policy may only be owned or held as a qualifying investment for F162...an account which satisfies the provisions of these Regulations;

(ii)that the policy shall automatically terminate if [F163it comes to the notice of the account manager, in any manner, that either of the events specified in paragraph (8) has occurred in relation to the policy;]

(iii)for an express prohibition of any transfer of the policy, or the rights conferred by the policy or any share or interest in the policy or rights respectively, other than the cash proceeds from the termination of the policy or a partial surrender of the rights conferred by the policy, to the account investor; and

(iv)that the policy, the rights conferred by the policy and any share or interest in the policy or rights respectively, shall not be capable of assignment or (in Scotland) assignation, other than that they may be vested in the account investor’s personal representatives, and that the title to the policy may be transferred to a new account manager subject to and in accordance with regulations 15 and 21;

[F164(c)the policy evidences or secures a contract of insurance which—

(i)falls within paragraph I or III of Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, or

(ii)would fall within either of those paragraphs if the insurer was a company with permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance;]

(d)the policy is not—

(i)a contract to pay an annuity on human life, or

(ii)a personal portfolio bond within the meaning given by [F165[F166section 516 of ITTOIA 2005], or]

(iii)a contract, the effecting and carrying out of which constitutes “pension business" within the meaning given by section 431B(1) of the Taxes Act M15; and

(e)after the first payment in respect of a premium in relation to the policy has been made, there is no contractual obligation on any person to make any other such payment.

(4) A policy F167...must not be connected with any other policy (“the linked policy"), held by the account investor or any other person, and for this purpose a policy is connected with another if—

(a)either policy was issued in respect of an insurance made with reference to the other, or with a view to enabling the other to be made on particular terms, or with a view to facilitating the making of the other on particular terms, and

(b)the terms on which the first-mentioned policy in this paragraph was issued would have been significantly less favourable to the holder if the linked policy had not been issued.

(5) References to “the linked policy" in paragraph (4) shall include a contract of insurance, and references to the issuing of the linked policy shall include the making of such a contract.

(6) No sum may at any time, at or after the making of the insurance, be lent to or at the direction of the account investor by or by arrangement with the insurer for the time being responsible for the obligations under the policy.

[F168(7) Where either of the events specified in paragraph (8) occurs in relation to a policy, the policy shall nevertheless be treated, for the purposes of these Regulations, excepting paragraphs (3)(b)(ii) and (8) and regulation 36, as if it had satisfied the conditions in paragraph (3)(b)(i) during the period–

(a)commencing at the time at which the specified event occurred, and

(b)ending immediately before–

(i)the end of the [F169final insurance year in relation to the policy, within the meaning given by section 499 of ITTOIA 2005], or

(ii)the time at which the specified event came to the notice of the account manager,

whichever first occurs (the “termination event”).

(8) The events specified in this paragraph are–

(a)that the policy has ceased to be one in respect of which the conditions in paragraph (3)(b)(i) are satisfied; and

(b)that those conditions were not satisfied in relation to the policy at the date on which the insurance was made.

(9) Where–

(a)it comes to the notice of the account manager, in any manner, that an event specified in paragraph (8) has occurred in relation to a policy, and

(b)the account manager is not the insurer for the time being responsible for the obligations under the policy or, where the policy is not still in existence, the person who was the last such insurer,

the account manager shall, within 30 days of the event coming to his notice, give notice to that insurer, specifying the event mentioned in sub-paragraph (a), and the termination event.]

Qualifying individuals who may invest under an accountU.K.

10.—(1) This regulation specifies the description of individual who may invest under an account (“qualifying individual").

(2) A qualifying individual to whom paragraph (1) refers is an individual—

[F170(a)who, in the case of a cash account, is 16 years of age or over and, in the case of a stocks and shares account, is 18 years of age or over;

(b)who, in the case of a stocks and shares account, has not subscribed, and will not subscribe, to any other stocks and shares account, in the year in which the subscription is made;

(c)who, in the case of a cash account, has not subscribed, and will not subscribe, to any other cash account, in the year in which the subscription is made;

(ca)who has not exceeded the appropriate overall subscription limit in regulation 4(2), or the [F171applicable] subscription limit in regulation 4(3), in that year;]

(d)(i)who is resident and ordinarily resident in the United Kingdom, or

[F172(ii)who, though not resident in the United Kingdom, has general earnings from overseas Crown employment subject to United Kingdom tax within the meaning given by section 28 of ITEPA 2003,]

(iii)who, though not resident in the United Kingdom, is married to [F173or in a civil partnership with] a person mentioned in paragraph (ii)

Account investor ceasing to qualifyU.K.

11.  Notwithstanding any other provision of these Regulations an account investor who, after subscribing to an account, at any time ceases to fulfil the conditions of regulation 10(2)(d) may retain the benefits of the account (including the right to any relief or exemption due under the account) subsisting at that time but, so long as he fails to fulfil those conditions, shall not be entitled to subscribe further to such an account.

Conditions for application to subscribe to an accountU.K.

12.—(1) An application by an individual to subscribe to an account in the year in which he first subscribes to that account, and in the year following a year in which that individual has not subscribed to the account, must be made to an account manager in a statement and, subject to paragraph (5), must fulfil the conditions specified in paragraphs (2), (3) and (4).

(2) An application must specify the first year to which the application relates.

(3) An application shall provide for a declaration by the applicant that—

[F174(a)his application is to subscribe to a stocks and shares account or cash account, as the case may be;]

(b)the declaration shall have effect for the year to which paragraph (2) refers, and each successive year following that year, in which the applicant subscribes to the account;

(c)all cash subscriptions made, and to be made, to the account are the applicant’s cash;

[F175(d)in the case of a stocks and shares account, the applicant—

(i)has not subscribed, and will not subscribe, to any other stocks and shares account, in the year to which paragraph (2) refers, and

(ii)will not subscribe to any other stocks and shares account, in each successive year following that year, in which the declaration has effect;]

[F175(e)in the case of a cash account, the applicant—

(i)has not subscribed, and will not subscribe, to any other cash account, in the year to which paragraph (2) refers, and

(ii)will not subscribe to any other cash account, in each successive year following that year, in which the declaration has effect;

(ea)that the applicant has not subscribed, and will not subscribe, more than the appropriate overall subscription limit in regulation 4(2) (aggregating subscriptions to all accounts)—

(i)in the year to which paragraph (2) refers, and

(ii)in each successive year following that year, in which the declaration has effect;

(eb)that in the case of a cash account, the applicant has not subscribed, and will not subscribe, more than the subscription limit in regulation 4(3)—

(i)in the year to which paragraph (2) refers, and

(ii)in each successive year following that year, in which the declaration has effect;]

[F176(f)the applicant is 16 years of age or over, and—

(i)is resident and ordinarily resident in the United Kingdom, or

(ii)[F177is 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 [F178or in a civil partnership with] a person mentioned in paragraph (ii),

and will inform the account manager if he ceases to be so resident and ordinarily resident, or to perform such duties, or to be married to [F179or in a civil partnership with] a person who performs such duties, as the case may be;]

(g)the applicant authorises the account manager—

(i)to hold the applicant’s cash subscription, account investments, interest, dividends and any other rights or proceeds in respect of those investments and any other cash;

(ii)to make on his behalf any claims to relief from tax in respect of account investments;

F180(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iv)where [F181a written declaration is required by paragraph (7)], to record the terms of the declaration in a written declaration made on behalf of the applicant.

(4) An application must contain—

(a)the applicant’s full name,

(b)the address of his permanent residence, including postcode,

(c)his national insurance number, or confirmation that he does not have one, and

(d)his date of birth.

F182(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(a)he is not or might not be a qualifying individual, or

(b)he has given untrue information in his application.

[F183(7) Where the application is not in writing or the manager operates a record system under which all original written applications are not retained, the account manager shall make the written declaration referred to in paragraph (3)(g)(iv) and notify the applicant of its contents.

(7A) Any such declaration shall take effect from the date on which it was made (subject to any corrections notified by the applicant to the manager within 30 days), and if he does not disagree with the contents within 30 days, he shall be treated as having agreed them.]

(8) Section 95 of the Management Act M16 shall have effect as if—

(a)the statement and declarations to which paragraphs (1), (3) and (7) refer were a statement or declarations, as the case may be, within the meaning of subsection (1)(b), and

(b)there were substituted for subsection (3) the following words—

“(3) The relevant years of assessment for the purposes of this section are the year of assessment in respect of which any claim to relief or exemption from tax in connection with which the statement or declarations are relevant, is made, the next following, and any preceding year of assessment.”

[F184(9) An application furnished by an individual under this regulation F185... shall be regarded as in writing if it is furnished—

(a)by telephonic facsimile transmission containing the signature of the individual, or

(b)by electronic communication containing an electronic signature of the individual.

(10) Declarations made by the account manager under paragraph [F186(7)] F187... shall be regarded as made in writing if they are produced by electronic means, and the copy of a declaration to be sent to the individual in accordance with paragraph (7) F188... may be sent by telephonic facsimile transmission or by electronic communication.

(11) In this regulation—

• [F189“electronic communication” includes any communication conveyed by means of an electronic communications network.]

• “electronic signature” has the meaning given by section 7(2) of the Electronic Communications Act 2000.]

[F190(12) An application may be made on behalf of an individual who is suffering from mental disorder, by a parent, guardian, spouse, [F191civil partner,] son or daughter of the individual, and shall be treated for the purposes of these Regulations as an application made by the individual.

(13) In paragraph (12) “mental disorder” has the meaning given by section 1(2) of the Mental Health Act 1983 or, in Scotland, [F192section 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 bonisU.K.

F19313.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Account manager—qualifications and Board’s approvalU.K.

14.—(1) This regulation specifies the circumstances (“qualifying circumstances") in which a person may be approved by the Board as an account manager.

(2) The qualifying circumstances to which paragraph (1) refers are the following—

(a)the person must make an application to the Board for approval in a form prescribed by the Board;

(b)an account manager must be—

(i)an authorised person within the meaning of [F194section 31(1)(a) or (c) of, or Schedule 5 to, the Financial Services and Markets Act 2000 who has permission to carry on one or more of the activities specified in Articles 14, 21, 25, 37, 40, 45, 51 and 53 and, in so far as it applies to any of those activities, Article 64 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 but excluding any person falling within paragraph (iv) below]; or

(ii)a European institution which [F195carries on one or more of those activities]; or

[F196(iia)in the case of a credit union, an authorised person within the meaning of section 31(1)(a) of the Financial Services and Markets Act 2000, who has permission to carry on one or more of the activities specified in Article 5 of the Financial Services And Markets Act 2000 (Regulated Activities) Order 2001;]

(iii)F197... [F198the Director of Savings], a building society, [F199a person falling within section 840A(1)(b) of the Taxes Act] or a relevant European institution; or

(iv)F200...an insurance company, within the meaning given by section 431(2) of the Taxes Act M17, an incorporated friendly society, or a registered friendly society; or

(v)[F201any] assurance undertaking which does not fall within paragraph (iv) above;

(c)an account manager must not be prevented from acting as such by [F202any requirement imposed under section 43 of the Financial Services and Markets Act 2000, or by any prohibition imposed by or under any rules made by the Financial Services Authority under that Act]; and

(d)an account manager who—

(i)is a European institution or a relevant authorised person and who does not have a branch or business establishment in the United Kingdom, or has such a branch or business establishment but does not intend to carry out all his functions as an account manager at that branch or business establishment, or

(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 [F203cash accounts only, or stocks and shares accounts only, or both], [F204and]

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

Special requirements relating to insurer-managersU.K.

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 representativeU.K.

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 [F205section 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 approvalU.K.

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.

(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; or

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

(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; and

(c)shall specify the disqualifying circumstances.

Account manager—appeal against withdrawal of Board’s approvalU.K.

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

F206(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The like provisions as are contained in Part V of the Management ActM18 (appeals and other proceedings) shall apply to an appeal and the [F207tribunal, on an appeal notified to it, shall] confirm the notice unless F208... satisfied that the notice ought to be quashed.

Account manager ceasing to actU.K.

19.  A person shall give notice to the Board and to the account investor in the account which he manages of his intention to cease to act as the account manager not less than 30 days before he so ceases so that his obligations to the Board under the account can be conveniently discharged at or about the time he ceases so to act, and the notice to the account investor shall inform him of his right to transfer the account under regulation 21.

Account manager ceasing to qualifyU.K.

20.—(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; or

(b)in the case of an individual, he becomes bankrupt [F209or is the subject of a bankruptcy restrictions order or an interim order] or, in Scotland, his estate is sequestrated, or he makes any arrangement or composition with his creditors generally; or

(c)in the case of a company, a resolution has been passed or a petition has been presented to wind it up; or

(d)in the case of a building society, [F210a person falling within section 840A(1)(b) of the Taxes Act] or a relevant European institution—

(i)it ceases to be a building society or to [F211fall within section 840A(1)(b) of the Taxes Act] or to be a relevant European institution, as the case may be; or

(ii)its directors have made a proposal under Part I of the Insolvency Act 1986 M19 for a composition in satisfaction of its debts or a scheme of arrangement of its affairs; or

(iii)[F212it enters administration]; or

(iv)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)(v), action corresponding to that described in sub-paragraph (b), (c) or (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, 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,

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.

[F213Transfers relating to accounts] U.K.

21.—[F214(1)  In this regulation, in relation to a transfer—

“the current year’s subscriptions” means—

“the previous years’ subscriptions” means—

[F214(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).]

[F214(3)  The current year’s subscriptions may only be transferred as a whole (with or without the whole or part of any previous years’ subscriptions).]

[F214(4)  In the case of a cash account, 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), or

(b)a cash account,

belonging to the same account investor.

(4A) In the case of a stocks and shares account, the current year’s subscriptions and the previous years’ subscriptions may only be transferred to a stocks and shares account belonging to the same account investor.

(4B) Where the current year’s subscriptions (with or without other subscriptions) are transferred from a cash account to a stocks and shares account (under paragraph (4)(a))—

(a)the subscriptions in sub-paragraphs (a) and (b) of the definition of “the current year’s subscriptions” in paragraph (1) shall be treated, for all purposes including regulation 31(3)(c), as if they had been made to the stocks and shares account, and

(b)accordingly, shall not count towards the cash subscription limit in regulation 4(3).

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

(a)a cash account to a cash account, or

(b)a stocks and shares account to a stocks and shares account,

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

(4D) The account investor shall make a fresh application under regulation 12 (with any necessary modifications to reflect that it is made on a transfer) to the transferee.

(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) [F215Except where the transferor has provided information to the transferee in accordance with regulation 21A(2)(b)(ii), the] transferor shall within 30 days after the date of the transfer give the transferee a notice containing the information specified in paragraph (6)F216....

(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)as regards an account [F217or any part of an account] transferred pursuant to paragraph (2)—

(i)whether the account is a [F218cash account or stocks and shares account,]

(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 transferF219...,

[F220(iv)the date on which the first subscription (if any) was made to the account, in the year in which the transfer takes place,]

(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, and

(vi)any amount which is, or will become, due under regulation 23 which has not been paid to the Board at the date of the transfer, F221...

F221(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F222(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F223Further requirements relating to transfers between cash accountsU.K.

21A.—(1) This regulation applies where an account investor, through the agency of an account manager (“the transferee”), gives instructions (“transfer instructions”) to an account manager with whom the account investor holds a cash account (“the transferor”) for that account or part of that account to be transferred, subject to and in accordance with regulation 21, to a cash account belonging to the account investor which is held with the transferee.

(2) Where this regulation applies—

(a)the transferee shall, within 5 business days beginning on the instruction day, send to the transferor—

(i)the transfer instructions; and

(ii)a notice specifying that the transferee consents to the transfer (“the consent notice”);

(b)the transferor shall, within 5 business days beginning on the day that the transferor receives the transfer instructions and the consent notice,—

(i)transfer to the transferee the subscriptions specified in the transfer instructions; and

(ii)send to the transferee a notice containing the information specified in paragraph (3); and

(c)the transferee shall ensure that the subscriptions specified in the transfer instructions are transferred to a cash account belonging to the account investor which is held with the transferee within 3 business days beginning on the day that the transferee receives the subscriptions and the notice referred to in sub-paragraph (b)(ii).

(3) The information specified in this paragraph is—

(a)as regards the account investor—

(i)the full name of the account investor,

(ii)the address of the account investor’s permanent residence, including postcode,

(iii)the date of birth of the account investor, and

(iv)the national insurance number of the account investor (if any), and

(b)as regards the cash account or any part of the cash account—

(i)the date of the transfer,

(ii)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,

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

(iv)the reference number or other means used by the transferor to identify the account belonging to the account investor in respect of which the transfer is made.

(4) For the purposes of paragraph (2)(a) and (b), the transfer instructions and the notices (as appropriate) shall be treated as sent if they are—

(a)posted to, or left at, the proper address of the transferor or the transferee (as appropriate); or

(b)transmitted by electronic communication.

(5) For the purposes of paragraph (2)(b), where the transferor receives the transfer instructions and consent notice on different days, they must both be treated as received on the latest of those days.

(6) For the purposes of paragraph (2)(c), where the transferee receives subscriptions specified in the transfer instructions and the notice described in paragraph (2)(b) on different days, they must all be treated as received on the latest of those days.

(7) In this regulation—

“business day” means any day except—

“electronic communication” includes any communication conveyed by means of an electronic communications network;

“instruction day” means—

“subscriptions” means the current year’s subscriptions and the previous years’ subscriptions as described in regulation 21(1).

(8) For the purposes of this regulation—

(a)a document is “posted” if it is sent pre-paid by a postal service which seeks to deliver documents by post within the United Kingdom no later than the next business day in all or the majority of cases, and to deliver by post outside the United Kingdom within such a period as is reasonable in all the circumstances; and

(b)the “proper address” to which a document is to be sent is any current address provided by the transferor or transferee as an address for service of such documents, but if no current address is provided then it shall be the address of its registered or principal office in the United Kingdom.]

Exemption from tax of account income and gainsU.K.

22.—(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 [F224(excluding any building society bonus)], or

[F225(ia)in respect of alternative finance return or profit share return paid by a financial institution (within the meanings in Chapter 5 of Part 2 of the Finance Act 2005);][F226 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 limits in regulation 4(2) to (3)); or]

(ii)on any annual profits or gains treated [F227under 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 made by any of them of an account investment gives rise, which is treated by section 761(1) of the Taxes Act M20 as constituting profits or gains, or

[F228(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 [F229under Chapter 9 of Part 4 of ITTOIA 2005] as arising in connection with a policy of life insurance which is an account investmentF230...;

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

[F231(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;]

[F232(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; and

(e)interest on a cash deposit which is an account investment held under a cash component shall not[F233, except for the purposes of [F234section 629 of ITTOIA 2005],] be regarded as income for any income tax purposes.

(2) An account investor who, after subscribing to 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.

Interest on cash deposits held under a stocks and shares componentF235...U.K.

23.—(1) When in any year, a sum of interest is paid or credited in respect of a cash deposit which is held under a stocks and shares component F236... in accordance with regulation 6(4) to (6)—

(a)no relief from tax shall apply to such interest, but

(b)paragraph (2) shall apply, and the amount determined in accordance with that paragraph shall be taken to represent the tax on such interest, in the place of the liabilities to tax which would otherwise arise.

(2) Where this paragraph applies—

(a)the account manager shall pay to the Board an amount representing income tax at the [F237basic rate] in force for the year on all sums of interest referred to in paragraph (1) paid or credited in that year; and

(b)any amount so payable—

(i)may be set-off against any repayment in respect of tax due under regulation 25, and subject thereto

(ii)shall be treated as an amount of tax due under an assessment which is final and conclusive and payable not later than 6 months after the end of the year in which the interest was paid or credited.

(3) The interest referred to in paragraph (1) shall in all other respects be regarded as if it were not income for any income tax purposes, and no repayment of tax or amounts representing tax shall be made to the account investor receiving or entitled to such interest.

(4) The reference to interest in paragraph (1), and in regulation 22, includes a reference to any bonus and to a dividend paid or credited in respect of a share account with a building society.

Tax liabilities and reliefs—account manager to act on behalf of account investorU.K.

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;

(b)any sum representing income tax which is payable under regulation 23 on amounts of interest paid or credited as mentioned in that regulation; and

(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 [F238Chapter 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 M21.

Repayments in respect of tax to account manager—interim claimsU.K.

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 [F239policies of life insurance falling within regulation 9], or on distributions and other rights or proceeds in respect of [F240such policies] [F241except in so far as regulation 26(2) requires a return of all sums of interest referred to in regulation 23(2)(a) and 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 claimsU.K.

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 of all sums of interest referred to in regulation 23(2)(a) [F242and 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, and the total amount payable under regulation 23(2)(a).

(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 provisionsU.K.

27.—(1) Section 42 of the Management Act M22 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 F243... from the Board’s decision on an annual claim F244... 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 [F245on 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 taxU.K.

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 Case VI of Schedule D.

Records to be kept by account managerU.K.

29.  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.

Information to be given to account investor by account managerU.K.

30.—(1) An account manager shall give notice to the account investor, at the commencement of, and in respect of, each successive year following the year in which the investor first subscribed to the account, during which the declaration referred to in regulation 12(3) has or may have effect, that—

[F246(a)in the case of a stocks and shares account, if the account investor subscribes to that account in the year to which the notice relates, the account investor may not subscribe to any other stocks and shares account, in that year;]

[F246(b)in the case of a cash account, if the account investor subscribes to that account in the year to which the notice relates, the account investor may not subscribe to any other cash account, in that year;

(c)the account investor must not subscribe more than the appropriate overall subscription limit in regulation 4(2) in that year (aggregating subscriptions to all accounts); and

(d)in the case of a cash account, the account investor must not subscribe more than the subscription limit in regulation 4(3), in that year.]

(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 managerU.K.

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)[F247, (5) and (7)], 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.

F248(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;

(b)as regards each such account—

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

(ii)the market value of the account investments held under [F249the] component of the account, subject to paragraph (6), 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 [F250account, to which subscriptions or a transfer under regulation 21] F251... were made in that year or part of a year—

(i)whether the account is a [F252cash account or stocks and shares account],

[F253(ii)the total amount of cash subscribed to the account, in the year or the part of the year for which the return is made;]

(iii)the date on which the first subscription (being either cashF254... 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, and

(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 [F255and—

(v)the date when any such [F256cash] account was closed, where that occurred during the year or the part of the year for which the return was made.]

(4) [F257Subject 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 [F258UK UCITS, recognised UCITS or non-UCITS retail scheme],

(ii)qualifying securities,

[F259(iia)government securities falling within regulation 7(2)(c), (ca) or (cb);]

(iii)shares in investment trusts,

[F260(iv)units in an authorised unit trust,]

(v)units in, or shares of, a [F261recognised UCITS, or non-UCITS retail scheme (constituted outside the United Kingdom)],

[F262(vi)shares in an open-ended investment company,]

[F263(via)the surrender value of life insurance policies which satisfy the condition of regulation 7(15),]

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

[F264with 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];

[F265(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,

(ii)the surrender value of life insurance policies which do not satisfy the condition in regulation 7(15), and

(iii)investments (other than those specified in paragraphs (i) and (ii)) which do not satisfy the condition in regulation 7(15); and]

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

(5) [F266Paragraph (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 policiesF267....

F268(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) [F269The 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—

[F270(i)cash accounts holding policies of life insurance falling within regulation 9,]

[F270(ii)all cash accounts,]

[F270(iii)stocks and shares accounts holding policies of life insurance falling within regulation 9, and

(iv)all stocks and shares accounts,]

(b)the total amount of cash subscriptions made in the [F271year or part of the year]—

(i)to stocks and shares components of accounts;

(ii)to cash components of accounts; F272...

F272(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F273(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.]

(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.

Information to be provided to the BoardU.K.

32.  The Board may by notice require any person who is or who at any time has been an account manager or account investor to furnish them, within such time (not being less than 14 days) as may be provided by the notice, such information about any account or about any account investment (including copies of or extracts from any books or other records) as they may reasonably require for the purposes of these Regulations.

Inspection of records by officer of the BoardU.K.

33.—(1) The Board may by notice require any person who is or who at any time has been an account manager or account investor, within such time (not being less than 14 days) as may be provided in the notice, to make available for inspection at a place within the United Kingdom by an officer of the Board authorised for that purpose all documents (including books and other records) in his possession or under his control containing information relating to any account or to any account investment.

(2) Where records are maintained by computer the person required to make them available for inspection shall provide the officer making the inspection with all the facilities necessary for obtaining information from them.

Capital gains tax—adaptation of enactmentsU.K.

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 M23 shall apply for the purposes of pooling and identifying account investments as if—

(a)in section 106A M24 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 [F274(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 [F2757(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 [F2767(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, [F277or

(iii)in the case of securities which were plan shares of an approved [F278SIP] 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.

[F279(c) “approved 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 an approved 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 M25 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 [F280in 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—supplementaryU.K.

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 M26 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 “[F281section 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".

[F282(6) If—

(a)a chargeable event, within the meaning given by [F283Chapter 9 of Part 4 of ITTOIA 2005], has happened in relation to a policy of life insurance which is an account investmentF284...; 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.]

[F285(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 M27 then, so far as they consist of policies of life insurance which are account investmentsF286..., 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.

(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.

[F287Application of the provisions of Chapter II of Part XIII of the Taxes Act [F288and of Chapter 9 of Part 4 of ITTOIA 2005] to policies where an investor ceases to be or was not entitled to relief from taxU.K.

36.—(1) This paragraph applies to a case where–

(a)an event specified in regulation 9(8) has occurred in relation to a policy of life insurance, and

(b)a termination event within the meaning given by regulation 9(7) occurs in relation to that policy.

(2) Where–

(a)there is a case to which paragraph (1) applies, and

(b)a chargeable event in relation to the policy, [F289falling within section 484(1) of ITTOIA 2005], has occurred prior to the time at which the termination event mentioned in paragraph (1)(b) occurs,

the account investor shall cease to be, and shall be treated as not having been, entitled to relief from tax under regulation 22(1)(a)(v), in respect of gains treated as arising on the occurrence of any chargeable event mentioned in sub-paragraph (b).

(3) The provisions of Chapter II of Part XIII of the Taxes Act [F290and of Chapter 9 of Part 4 of ITTOIA 2005] shall apply, in a case to which paragraph (1) applies, to–

(a)the termination event mentioned in paragraph (1)(b), and

(b)any chargeable event mentioned in paragraph (2)(b),

with the modifications provided for in regulation 35(7) and paragraphs (4) to (7) of this regulation, and the account investor and the account manager shall account to the Board in accordance with this regulation for tax from which relief under regulation 22(1)(a)(v) has been given on the basis that the account investor was so entitled, or in circumstances such that the account investor was not so entitled.

[F291(4) Section 530 of ITTOIA 2005 does not apply to a gain in a case in which paragraph (1) applies.]

(5) Relief under [F292section 535 of ITTOIA 2005] shall be computed as if paragraph (4) had not been enacted.

[F293(6) In section 552 of the Taxes Act—

(a)in subsection (1)(b) for the words “policy holder” there shall be substituted “account investor”;

(b)in subsection (3)—

F294(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)for the words “the name and address of the appropriate policy holder” there shall be substituted “the name and address of the account investor”;

F294(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)in subsection (5)—