The Individual Savings Account (Amendment) (No. 2) Regulations 2024

• Citation: S.I. 2024/1022
• Sections: 9

Section 1 Citation, commencement and effect

(1) These Regulations may be cited as the Individual Savings Account (Amendment) (No. 2) Regulations 2024 and come into force on 4th November 2024.

(2) The amendments made by regulation 7 have effect in relation to the tax year 2025-26 and subsequent tax years.

Section 2 Amendment of the Individual Savings Account Regulations 1998

The Individual Savings Account Regulations 1998 are amended as follows.

Section 3 Amendment of regulation 4

In regulation 4 (general conditions for accounts and subscriptions to accounts) , in paragraph (6)—

(a) after sub-paragraph (a), insert—

(aa) where the account investments are fractional interests, that—

(i) the requirement under sub-paragraph (a) applies in relation to the beneficial ownership of the whole share in which the account investor holds a fractional interest, and

(ii) the beneficial interest held by the account investor shall be in proportion to the fractional interest in the whole share;

(b) in sub-paragraph (b), after “except in relation to” insert “a fractional interest,” ;

(c) after sub-paragraph (b) insert—

(ba) that fractional interests are treated as meeting the requirements of sub-paragraph (b)(i) or (ia) if (and only if) the title to the whole share in which the account investor holds a fractional interest meets the requirements of those paragraphs;

(d) in sub-paragraph (d), after “stocks and shares component” insert “(excluding an investment in fractional interests)” ; and

(e) after sub-paragraph (d) insert—

(da) that, in relation to investments in fractional interests, where the account investor holds more than one fractional interest in relation to the same investment, the aggregated value of which amounts to at least one whole share (“aggregated whole share”)—

(i) the obligations under sub-paragraph (d) apply to the manager in relation to the account investor who holds such an aggregated whole share, and

(ii) the aggregated whole share is subject to the requirements in sub-paragraph (b);

Section 4 Amendment of regulation 4ZA

In regulation 4ZA (subscriptions to an account other than a junior ISA account) , in paragraph (4)(b), for “have” substitute “qualify for” .

Section 5 Amendment of regulation 6

For paragraph (2) of regulation 6 (general investment rules) substitute—

(2) All other transactions by way of sale or otherwise in an investment under account, and all transactions by way of trade or otherwise by an account manager of an investment in fractional interests—

(a) 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, and

(b) in the case of transactions in fractional interests, the price shall be proportionate to the size of the fraction relative to the whole share.

Section 6 Amendment of regulation 7

(1) In paragraph (2)(a) of regulation 7 (qualifying investments for a stocks and shares component) before the word “shares” insert “subject to paragraphs (2B) and (2C),” .

(2) In paragraph (2)(d), before “shares” insert “and subject to paragraphs (2B) and (2C),” .

(3) After paragraph (2)(g) insert—

(ga) subject to paragraphs (2B) and (2C), shares of a UK UCITS, a recognised UCITS or a non-UCITS retail scheme that are listed on or admitted to trading on a recognised stock exchange;

(4) After paragraph (2)(q) insert—

(r) an interest in a fraction of a share where the account investor holds the beneficial interest in a fraction that is less than one whole share under the terms which are contained in a contractual arrangement between the account investor and the account manager (“fractional interest”).

(5) After paragraph (2A) insert—

(2B) An interest in a fraction of a qualifying investment falling within any of sub-paragraphs (a) to (ha) of paragraph (2) is not a qualifying interest for the stocks and shares component unless it is a fractional interest within the meaning of sub-paragraph (r) of that paragraph.

(2C) In sub-paragraph (r) of paragraph (2), “ shares ” means shares which are qualifying investments in accordance with sub-paragraphs (a), (d) or (ga) of that paragraph.

(6) In paragraph (3) for “(2)(a) or (d)” substitute “(2)(a), (d) or (ga)” .

Section 7 Amendment of regulation 12

In regulation 12 (conditions for application to open an account that is not a junior ISA account or a Lifetime ISA) , in paragraph (4)(c), for “, or confirmation that he does not have one” substitute “or, where applicable, confirmation that the applicant does not qualify for a national insurance number” .

Section 8 Amendment of regulation 21

In regulation 21 (transfers relating to accounts other than junior ISA accounts) —

(a) in paragraph (6)(b), at the beginning, insert “subject to paragraph (6ZA),” , and

(b) after paragraph (6) insert—

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

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

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

Section 9 Amendment of regulation 21A

In regulation 21A (further requirements relating to transfers between cash accounts) —

(a) in paragraph (3)(b), in each of sub-paragraphs (ii) and (iii), at the beginning insert “subject to paragraph (3ZA),” , and

(b) after paragraph (3) insert—

(3ZA) But there is no obligation to provide the information specified in paragraph (3)(b)(ii) or (iii) where, in relation to an account—

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

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