The Individual Savings Account Regulations 1998

General conditions for accounts and subscriptions to accounts U.K.

4.—(1) An account is a scheme of investment, to which an individual who is a qualifying individual may subscribe, and in respect of which the following conditions must be fulfilled—

[F1 (a) the account is set up as a stocks and shares account or a cash account;]

[F1 (b) a stocks and shares account is made up of a single stocks and shares component only;]

[F1 (c) a cash account is made up of a single cash component only;]

[F1 (d) a qualifying individual who is 16 years of age or over may only subscribe to a single cash account in a particular year,]

[F1 (e) a qualifying individual who is 18 years of age or over may only subscribe to a single stocks and shares account in a particular year;]

[F1 (f) it is an account to which only one qualifying individual subscribes;]

[F1 (g) subject to regulation 7(2)(h), it is an account to which the qualifying individual subscribes only by payment to the account manager of a sum or sums of the individual’s cash; and]

[F1 (h) the subscriptions made by the qualifying individual to accounts (ignoring transfers and payments from account managers to the individual) do not in the aggregate in any year exceed the subscription limits in paragraphs (2) and (3).]

[F2 (2) The overall subscription limit for any qualifying investor for any year (that is, the aggregate of the investor’s subscriptions to all accounts in that year) is—

(a) £7,200, unless

(b) the qualifying investor is 16 years of age or over but less than 18 years at the end of the year, where it is £3,600.]

[F2 (3) Within and subject to that overall subscription limit, the qualifying investor may subscribe up to £3,600 in any year to a cash account.]

[F2 (4) Accordingly, by way of illustration, the qualifying investor may subscribe in a year—

(a) £3,600 to a cash account and £3,600 to a stocks and shares account;

(b) £2,000 to a cash account and £5,200 to a stocks and shares account; or

(c) nil to a cash account and £7,200 to a stocks and shares account;

but while under the age of 18 years the qualifying investor may only subscribe £3,600 to a cash account.]

(5) An account must at all times be managed in accordance with these Regulations by an account manager and under terms agreed in a recorded form between the account manager and the account investor.

(6) Apart from other requirements of these Regulations the terms agreed to which paragraph (5) refers shall include the following conditions—

(a) that the account investments shall be in the beneficial ownership of the account investor;

(b) that, except in relation to qualifying investments for a cash component within regulation 8(2)(a), (b) or (e), and subject to regulation 15—

(i) the title to all account investments shall be vested in the account manager or his nominee or jointly in one of them and the account investor, and

(ii) where a share certificate or other document evidencing title to an account investment is issued, it shall be held by the account manager or as he may direct;

(c) that, in relation to a stocks and shares component, and qualifying investments falling within [F3 paragraphs (g), (h), (k), (l) and (m) of regulation 8(2)], the account manager shall, if the account investor so elects, arrange for the account investor to receive a copy of the annual report and accounts issued to investors by every company, unit trust, open-ended investment company or other entity in which he has account investments;

(d) that, in relation to a stocks and shares component, and qualifying investments falling within [F3 paragraphs (g), (h), (k), (l) and (m) of regulation 8(2)], the account manager shall be under an obligation (subject to any provisions made under any enactment and if the account investor so elects) to arrange for the account investor to be able—

(i) to attend any meetings of investors in companies, unit trusts, open-ended investment companies and other entities in which he has account investments,

(ii) to vote, and

(iii) to receive, in addition to the documents referred to in sub-paragraph (c), any other information issued to investors in such companies, unit trusts, open-ended investment companies and other entities;

(e) that the account manager shall satisfy himself that any person to whom he delegates any of his functions or responsibilities under the terms agreed with the account investor is competent to carry out those functions or responsibilities;

(f) that [F4 on the instructions of the account investor (“the transfer instructions”) and within such time as is stipulated by the account investor in the transfer instructions]—

(i) an account, with all rights and obligations of the parties to it, or

(ii) such parts thereof as may be agreed between the account investor and the account manager,

[F5 shall] be transferred to another account manager subject to and in accordance with regulation 21;

[F6 (fa) that on the instructions, subject to regulation 9(3)(b), of the account investor (“the withdrawal instructions”) and within such time as is stipulated by the account investor in the withdrawal instructions, account investments, interest, dividends, rights or other proceeds in respect of such investments or any cash shall be transferred or paid to him;]

(g) that the account manager shall notify the account investor if by reason of any failure to satisfy the provisions of these Regulations an account is or will become no longer exempt from tax by virtue of regulation 22(1).

[F7 (7) The time stipulated in transfer instructions or withdrawal instructions shall be subject to any reasonable business period (not exceeding 30 days) of the account manager required for the practical implementation of the instructions.]

[F8 (8) Where an account holds units in or shares of a UK UCITS, recognised UCITS or non-UCITS retail scheme, and dealings in the units or shares are suspended in accordance with Rule 7.2 of the Collective Investment Schemes Sourcebook (COLL 7.2), or any direct foreign equivalent of that Rule, the business period in paragraph (7) may be extended to 7 days after the end of such suspension.]

Textual Amendments

F1 Reg. 4(1)(a)-(h) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2007 (S.I. 2007/2119), regs. 1, 5

F2 Reg. 4(2)-(4) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2007 (S.I. 2007/2119), regs. 1, 6

F3 Words in reg. 4(6)(c)(d) substituted (6.4.2008) by The Individual Savings Account (Amendment) Regulations 2008 (S.I. 2008/704), regs. 1, 4

F4 Words in reg. 4(6)(f) substituted (1.10.2002) by The Individual Savings Account (Amendment No. 2) Regulations 2002 (S.I. 2002/1974), regs. 1(2), 3(2)(a)

F5 Word in reg. 4(6)(f) substituted (1.10.2002) by The Individual Savings Account (Amendment No. 2) Regulations 2002 (S.I. 2002/1974), regs. 1(2), 3(2)(b)

F6 Reg. 4(6)(fa) inserted (1.10.2002) by The Individual Savings Account (Amendment No. 2) Regulations 2002 (S.I. 2002/1974), regs. 1(2), 3(3)

F7 Reg. 4(7) inserted (1.10.2002) by The Individual Savings Account (Amendment No. 2) Regulations 2002 (S.I. 2002/1974), regs. 1(2), 3(4)

F8 Reg. 4(8) added (11.8.2009) by The Individual Savings Account (Amendment No. 2) Regulations 2009 (S.I. 2009/1994), regs. 1(1), 4