The Individual Savings Account Regulations 1998

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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 [F1([F2including any government bonus, but excluding] any building society bonus)], or

[F3(ia)in respect of alternative finance return paid by a financial institution in accordance with Part 10A of ITA 2007, or]

[F4(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 [F5limit] in [F6regulations [F74ZA(1) and 4ZB(1)]]); or]

(ii)on any annual profits or gains treated [F8under Part 12 of ITA 2007 (accrued income profits)] as having been received by any of them in respect of account investments, or

[F9(iii)on an offshore income gain to which a disposal by any of them of an account investment would otherwise give rise to a charge to tax under regulation 17 of the Offshore Funds (Tax) Regulations 2009, or]

[F10(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 [F11under Chapter 9 of Part 4 of ITTOIA 2005] as arising in connection with a policy of life insurance which is an account investmentF12...;

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

[F13(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;]

[F14(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; F15...

(e)[F16in relation to an account that is not a junior ISA account,] interest on a cash deposit which is an account investment held under a cash component shall not[F17, except for the purposes of [F18section 629 of ITTOIA 2005],] be regarded as income for any income tax purposes[F19;

(f)in relation to a junior ISA account, income arising from account investments shall not be regarded as income for any income tax purposes (including section 629 of ITTOIA 2005)]

(2) An account investor who, after [F20the opening of] 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.

[F21(3) A reference to “interest” in this regulation includes a reference to any bonus and to a dividend paid or credited in respect of a share account with a building society.]

Textual Amendments

F1Words in reg. 22(1)(a)(i) added (1.1.2007) by The Individual Savings Account (Amendment) Regulations 2006 (S.I. 2006/3194), regs. 1, 4(a)

F2Words in reg. 22(1)(a)(i) substituted (6.4.2017) by The Individual Savings Account (Amendment No. 2) Regulations 2017 (S.I. 2017/466), regs. 1, 27

F3Reg. 22(1)(a)(ia) substituted (1.11.2011) by The Individual Savings Account (Amendment No. 2) Regulations 2011 (S.I. 2011/1780), regs. 1, 27(a)

F4Reg. 22(1)(a)(ib) and preceding word inserted (1.1.2007) by The Individual Savings Account (Amendment) Regulations 2006 (S.I. 2006/3194), regs. 1, 4(b)

F5Word in reg. 22(1)(a)(ib) substituted (1.7.2014) by The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 20

F6Words in reg. 22(1)(a)(ib) substituted (1.11.2011) by The Individual Savings Account (Amendment No. 2) Regulations 2011 (S.I. 2011/1780), regs. 1, 27(b)

F7Words in reg. 22(1)(a)(ib) substituted (1.7.2014) by The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 20

F8Words in reg. 22(1)(a)(ii) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 12(2)

F9Reg. 22(1)(a)(iii) substituted (1.11.2011) by The Individual Savings Account (Amendment No. 2) Regulations 2011 (S.I. 2011/1780), regs. 1, 27(c)

F10Reg. 22(1)(a)(iv) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 12(3)

F11Words in reg. 22(1)(a)(v) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 12(4)