in section 106A M2 after subsection (11) there were added—

“(12)

This section and sections 104, 110, 110A and 114—

(a)

shall apply separately in relation to any securities which are held by a person as account investments so long as they are so held, and

(b)

shall apply in relation to any such securities which became account investments by being transferred or renounced to an account manager or to a nominee for an account manager in the circumstances specified in regulation 7(2)(h) and F1(10)(a), (b) or (ba) as if they had been account investments—

(i)

in the case of securities acquired by that person in accordance with the provisions of a savings-related share option scheme, which were transferred in the circumstances specified in regulation F27(2)(h)(i) and (10)(a), from the date of their acquisition by him, or

(ii)

in the case of securities appropriated to that person in accordance with the provisions of an approved profit sharing scheme, which were transferred in the circumstances specified in regulation F37(2)(h)(ii) and (10)(b), from the date when he directed the trustees to transfer the ownership of the securities to him or, if earlier, the release date in relation to those securities, F4or

(iii)

in the case of securities which were plan shares of an approved F5SIP before being transferred in the circumstances specified in regulation 7(2)(h)(iii) and (10)(ba), from the date when the securities ceased to be subject to the plan, and

(c)

while applying separately to any such securities, shall have effect as if that person held them in a capacity other than that in which he holds any other securities of the same class whether under another such account or otherwise.

(13)

In this section—

(a)

“account", “account investment" and “account manager" have the same meanings as in the Individual Savings Account Regulations 1998 and “regulation" means a regulation of those Regulations;

(b)

“approved profit sharing scheme" has the same meaning as in Chapter IV of Part V of the Taxes Act and “savings-related share option scheme" has the meaning given by paragraph 1 of Schedule 9 to that Act.

F6(c)

“approved SIP” and “ceased to be subject to the plan” shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003); and

(d)

“plan shares”, in relation to an approved SIP, shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003) except that—

(i)

paragraph 87(6) of Schedule 2 to ITEPA 2003 (meaning of the word “shares” in the context of company reconstructions) shall not apply, and

(ii)

in paragraph 88(2) of that Schedule (treatment of shares acquired under rights issue) the words “or securities or rights” shall be treated as omitted.”; and

in section 110A M3 after subsection (5) there were added—

“(6)

Where part of a section 104 holding is treated by section 106A(12)(b)(ii) as having been account investments since a particular date—

(a)

an operative event shall be regarded as having occurred for the purposes of this section immediately before that date, consisting of the disposal of the part of that section 104 holding which is so treated, and

(b)

this section shall apply in relation to the occurrence of that operative event as it would have applied if it had always applied separately in relation to the part of that section 104 holding which is so treated.”

after subsections (12) and (13), as added by paragraph (2), there were added—

“(14)

Where a person disposes of securities and securities of the same class which were eligible for transfer to an account under regulation 7(2)(h) were—

(a)

held by him immediately before that disposal, or

(b)

acquired by him on the same day as that disposal, or

(c)

acquired by him within the period of thirty days after that disposal,

and those securities were acquired in the circumstances specified in that regulation, he shall be treated as having first disposed of any securities of that class held or acquired by him which were not so eligible.”