The Individual Savings Account (Amendment) Regulations 2023

The Individual Savings Account (Amendment) Regulations 2023 was published on legislation.gov.uk, the internet platform of the UK government for publicizing legal documents. The Regulations modify the Individual Savings Account Regulations 1998 to update the 1998 regulations to reflect developments in other regulations, clarify certain provisions, provide additional options for investors, and „protect the integrity of the tax-free savings landscape“.
To briefly recall, the Individual Savings Account Regulations 1998 – or brief ISA regulation – contains provisions for the opening of individual savings accounts (ISAs) that are taxed advantaged to facilitate (retirement) savings at an early age. The regulations thereby stipulate the type of ISAs that are available (Junior ISAs for persons aged under 18), the type of investments that can be made within such account (e.g. investments in equity shares), investment limits (for the purpose of being tax-exempt), and other relevant and relating matters.
The now published Individual Savings Account (Amendment) Regulations 2023 makes numerous amendments to the 1998 regulations to, among other things,
– revise the definition of a „recognized UCITS“ by referencing section 271A of FSMA which enables savers to also hold units of overseas collective investment schemes (CIS) in their accounts;
– enable investors in shares or stocks whose funds were transferred to the Dormant Asset Scheme and subsequently recovered to (re)transfer those funds into an ISA of their choice with the provider of their choice;
– enable account holders to also invest in „Alternative Finance ISAs“ which permit investments in loans and instruments other than stocks or shares;
– clarify that investments in investment trusts shares are subject to the same requirements and restrictions as those in other shares;
– require a departing ISA account manager to provide notice to its customers that they have to transfer their ISAs to another account manager within 30 days in order to remain eligible for tax exemption. The notification must be made at least 15 days before the Board approves the withdrawal of authorization of the account manager – in case of authorization withdrawal; and
– stipulate that investments in loans will not qualify as ISA eligible investments, if there is a close relationship between the ISA account holder and the borrower. Legacy investments will not be affected by this provision.
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As these are only the key provisions stipulated in the Individual Savings Account (Amendment) Regulations 2023, please refer to the original legislation for detailed, comprehensive information.