The Individual Savings Account Regulations 1998

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Changes and effects yet to be applied to Regulation 7:

reg. 7(2)(a) words inserted by S.I. 2024/1022 reg. 6(1)
reg. 7(2)(d) words inserted by S.I. 2024/1022 reg. 6(2)
reg. 7(2)(ga) inserted by S.I. 2024/1022 reg. 6(3)
reg. 7(3) words substituted by S.I. 2024/1022 reg. 6(6)

Changes and effects yet to be applied to the whole Instrument associated Parts and Chapters:

Whole provisions yet to be inserted into this Instrument (including any effects on those provisions):

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)

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[F1—

(i)issued by a company wherever incorporated, [F2and]

(ii)subject to paragraph (3), [F3either officially listed on a recognised stock exchange or, in [F4the United Kingdom or] the European Economic Area, admitted to trading on a recognised stock exchange[F5. ]F6...]]

F7(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)securities (“qualifying securities")—

(i)issued by a company wherever incorporated, [F8and]

[F9(ii)where the securities in question satisfy at least one of the conditions specified in paragraph (5)[F10.]]

F11(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F12(c)gilt-edged securitiesF13...;

(ca)any securities issued by or on behalf of [F14the government of the United Kingdom or] a government of any EEA StateF15...;

[F16(cb)any securities which, 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”];]

[F17(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 [F18condition] in [F18paragraph] (5)(b)F19...;]

[F20(d)subject to paragraph (3), shares in an investment trust listed or admitted to trading on a recognised stock exchange;]

F21(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)units in, or shares of, a [F22UK UCITS or recognised UCITS]F23...;

[F24(g)qualifying units in or shares of a non-UCITS retail schemeF25...;]

(h)subject to the conditions specified in paragraph (10)[F26—

(i)shares which the qualifying individual has exercised the right to acquire in accordance with the provisions of [F27[F28a Schedule 3] 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 [F29a Schedule 2] [F30SIP] 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 [F31regulation 4(1B)(d)];

[F32(ha)a depositary interest;]

(j)cash deposited in accordance with regulation 6(4) to (6)F33... ;

[F34(k)investments which—

(i)were held under a stocks and shares component [F35or 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.]

[F36(l)investments which—

(i)were held under the stocks and shares component [F37or 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.]

[F38(m)units in a relevant collective investment scheme specified as a stakeholder product by regulation 5 of the Stakeholder Products RegulationsF39...;

(n)policies of life insurance falling within regulation 9, issued in respect of an insurance made on or after 6th April 2005F40...;]

F41(o). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F42(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[F43;]]

[F44(q)core capital deferred shares within the meaning of regulation 2 of the Building Societies (Core Capital Deferred Shares) Regulations 2013, provided that such shares are listed on the official list of a recognised stock exchange.]

[F45(2A) Notwithstanding any provision of paragraph (1), investments which—

(a)are held by an account investor under a stocks and shares component on the coming into force of this paragraph; and

(b)immediately beforehand fell within paragraph (2)(f) by virtue of being units in, or shares of, a recognised UCITS,

are to be treated, for as long as they are so held, as qualifying investments for the stocks and shares component.]

(3) [F46An investment in shares fulfils the conditions as to official listing and admission to trading in paragraph (2)(a)] [F47or (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 [F48or trust] F49... which are due to be admitted to such listing [F50or admitted to such trading] within 30 days of the allocation or allotment, and which, when admitted to such listing [F51or trading], 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

[F52(iv)units in or shares in, or rights to units in or shares in, an authorised fund or a part of an umbrella scheme[F53, 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 [F5475%] subsidiary of a company whose shares are so listed[F55;]

[F56(d)that the shares in the company issuing the securities are admitted to trading on a recognised stock exchange in [F57the United Kingdom or] the European Economic Area;

(e)that the securities are so admitted to trading;

(f)that the company issuing the securities is a 75% subsidiary of a company whose shares are so admitted to trading.]

F58(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F59(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F60(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F61(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 [F62[F63a Schedule 3] 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;

[F64(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 [F65(a), (b) or (ba)] in any year, and the individual’s cash subscriptions in that year [F66to that account, do not together exceed the overall subscription limit in [F67regulation 4ZA(1)] 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.

F68(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F69(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).]

F70(14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F71(15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F72(16) In this regulation, references, in relation to qualifying investments, to the value, are to be construed in accordance with regulation 6(2), but deducting the incidental costs that would be incurred by a disposal and, in the case of a policy of life insurance, omitting any benefits payable in the event of the death of the account investor.]

F73(17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1Words in reg. 7(2)(a) substituted (6.10.2005) by The Individual Savings Account (Amendment No. 2) Regulations 2005 (S.I. 2005/2561), regs. 1, 5(a)

F2Word in reg. 7(2)(a)(i) inserted (1.7.2014) by The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 14(a)

F3Words in reg. 7(2)(a)(ii) substituted (5.8.2013) by The Individual Savings Account (Amendment No. 3) Regulations 2013 (S.I. 2013/1743), regs. 1(1), 5(a)

F4Words in reg. 7(2)(a)(ii) inserted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 24(3)(a)(i) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F5Punctuation in reg. 7(2)(a)(ii) substituted (1.7.2014) by The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 14(b)

F6Word in reg. 7(2)(a)(ii) omitted (1.7.2014) by virtue of The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 14(b)

F7Reg. 7(2)(a)(iii) omitted (1.7.2014) by virtue of The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 14(c)

F8Word in reg. 7(2)(b)(i) inserted (1.7.2015) by The Individual Savings Account (Amendment No. 4) Regulations 2015 (S.I. 2015/1370), regs. 1, 4(a)(i)

F9Reg. 7(2)(b)(ii) substituted (1.7.2014) by The Individual Savings Account (Amendment No. 2) Regulations 2014 (S.I. 2014/1450), regs. 1, 14(d)

F10Punctuation in reg. 7(2)(b)(ii) substituted (1.7.2015) by The Individual Savings Account (Amendment No. 4) Regulations 2015 (S.I. 2015/1370), regs. 1, 4(a)(ii)