The Individual Savings Account Regulations 1998

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reg. 4(6)(aa) inserted by S.I. 2024/1022 reg. 3(a)
reg. 4(6)(ba) inserted by S.I. 2024/1022 reg. 3(c)
reg. 4(6)(da) inserted by S.I. 2024/1022 reg. 3(e)
reg. 7(2)(r) inserted by S.I. 2024/1022 reg. 6(4)
reg. 7(2B)(2C) inserted by S.I. 2024/1022 reg. 6(5)
reg. 21(6ZA) inserted by S.I. 2024/1022 reg. 8(b)
reg. 21A(3ZA) inserted by S.I. 2024/1022 reg. 9(b)

[F1Application of the provisions of Chapter II of Part XIII of the Taxes Act [F2and 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, [F3falling 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 [F4and 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.

[F5(4) Section 530 of ITTOIA 2005 does not apply to a gain in a case in which paragraph (1) applies.]

(5) Relief under [F6section 535 of ITTOIA 2005] shall be computed as if paragraph (4) had not been enacted.

[F7(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)—

F8(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”;

F8(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)in subsection (5)—

(i)for the words “the appropriate policy holder” there shall be substituted “the account investor”;

(ii)sub-paragraph (b)(ii) shall be omitted;

(iii)paragraph (c) shall be omitted;

(iv)in paragraph (d) the words “except where paragraph (c) above applies,” shall be omitted; and

(v)paragraph (f) shall be omitted;

(d)in subsection (6)—

(i)paragraph (b) shall be omitted;

(ii)for paragraph (c) there shall be substituted—

“(c)if the event is a death, the period of three months beginning with the receipt of written notification of the death;”;

(iii)after paragraph (c) there shall be inserted—

[F9“(d)if the event is—

(i)a termination event, or

(ii)a chargeable event preceding such a termination event (as mentioned in regulation 36(2) of the Individual Savings Account Regulations 1998),

the period of three months beginning with the date on which the insurer received notice under regulation 9(9)(b) of those Regulations or, if earlier, actual notice of the termination event.”];

(e)in subsection (7)—

F10(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)paragraph (b) shall be omitted;

(iii)for paragraph (c) there shall be substituted—

“(c)if the event is a death, the period of three months beginning with the receipt of written notification of the death;”;

(iv)after paragraph (c) there shall be inserted—

[F11“(ca)if the event is—

(i)a termination event, or

(ii)a chargeable event preceding such a termination event (as mentioned in regulation 36(2) of the Individual Savings Account Regulations 1998),

the period of three months beginning with the date on which the insurer received notice under regulation 9(9)(b) of those Regulations or, if earlier, actual notice of the termination event.”]; and

(v)in paragraph (d) for the words “paragraph (c)” there shall be substituted “paragraph (c) or (ca)”;

(f)in subsection (8)—

(i)in paragraph (b) for “policy holder” there shall be substituted “account investor in respect”;

F12(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h)in subsection 10—

(i)before the definition of “amount” there shall be inserted—

““account investor” has the same meaning as in the Individual Savings Account Regulations 1998;”;

(ii)the definition of “appropriate policy holder” shall be omitted; [F14and]

F15(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15(iv). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(v)after the definition of “section 546 excess” there shall be inserted—

““termination event” has the same meaning as in the Individual Savings Account Regulations 1998;”;] F16...

F16(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F17(6A) In section 552ZA of the Taxes Act—

(a)in subsection (2)(b) the words “or an assignment” shall be omitted; and

(b)subsections (3) and (4) shall be omitted.]

F18(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) The account manager shall account for and pay income tax at the [F19basic rate] in force for the year of assessment in which the termination event, or the chargeable event mentioned in paragraph (2)(b), occurred, as the case may be, and any amount so payable–

(a)may be set off against any repayment in respect of tax due under regulation 25 or regulation 26 and, subject thereto,

(b)shall be treated as an amount of tax due not later than 6 months after the end of the year in which the event specified in regulation 9(8) came to the notice of the account manager, and

(c)shall be payable without the making of an assessment.

(9) Where tax is charged in accordance with paragraph (3)(a) or (b)–

(a)an assessment to income tax at the [F20basic rate] [F21determined in pursuance of section 6(2) of ITA 2007] in force for the relevant year of assessment may be made on the account manager or on the account investor, and

[F22(b)an assessment to income tax may be made on the account investor at the higher rate and additional rate (determined in pursuance of section 6(2) of ITA 2007) for that year of assessment as appropriate to the account investor’s income tax liability calculated in accordance with section 23 of ITA 2007,]

[F23not more than 4 years after the end of] that year of assessment, and regulation 28 shall not apply.]

Textual Amendments

F1Reg. 36 inserted (6.4.1999) by The Individual Savings Account (Amendment) Regulations 1998 (S.I. 1998/3174), regs. 1, 12

F2Words in reg. 36 title inserted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 17(2)

F3Words in reg. 36(2)(b) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 17(3)

F4Words in reg. 36(3) inserted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 17(4)

F5Reg. 36(4) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 17(5)

F6Words in reg. 36(5) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 17(6)

F7Reg. 36(6) substituted (with effect in accordance with reg. 1 of the amending S.I.) by The Individual Savings Account (Amendment) Regulations 2002 (S.I. 2002/453), reg. 5(2)

F8Reg. 36(6)(b)(i)(iii) omitted (12.8.2008) by virtue of The Individual Savings Account (Amendment No. 2) Regulations 2008 (S.I. 2008/1934), regs. 1(1), 6(2)(a)

F9Words in reg. 36(6)(d) substituted (8.1.2003) by The Individual Savings Account (Amendment No. 3) Regulations 2002 (S.I. 2002/3158), regs. 1(2), 8

F10Reg. 36(6)(e)(i) omitted (12.8.2008) by virtue of The Individual Savings Account (Amendment No. 2) Regulations 2008 (S.I. 2008/1934), regs. 1(1), 6(2)(b)