Tax-free savings newsletter 13 — September 2024
Published 24 September 2024
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1. Lifetime ISA (LISA) manager guidance
1.1 Investor queries
If an investor has any issues with their LISA, their first port of call should be with the LISA manager. You should follow the relevant HMRC LISA manager guidance.
1.2 Investor personal details
Where an investor provides personal details to open a LISA and the details do not match HMRC records, then you should direct the investor to check their details on their personal tax account. The details should be their full forename and surname (including any middle names) and not a name the investor wants to be known as. If the information you provide does not match our systems, the opening of the account cannot progress.
To mitigate against any potential Application Programming Interface (API) errors occurring, LISA managers should make sure that prior to making any subscriptions, investors have checked their details match those held by HMRC.
2. Fractional interests in Individual Savings Accounts (ISA) and Child Trust Funds (CTF)
Consultation has recently closed on draft regulations which will enable certain fractional interests to be held in an ISA or CTF. We expect these changes to take effect in coming months.
For the purposes of the regulations, a ‘fractional interest’, commonly known as ‘fractional shares’, is a contractual arrangement between the ISA manager and the investor that allows the investor to invest in a proportion of a whole share that is held by the ISA manager or their nominee.
We will be focusing on ensuring ISA managers are fully compliant with the new regulations. Where any ‘fractional shares’ are not eligible under the new regulations, ISA managers will be required to remove them from their affected ISAs.
Any fractional interests acquired prior to the changes to the regulations may be retained within the account but once the amended regulations come into force, all fractional interests held in ISAs or CTFs must meet the requirements of those amended regulations. This may require ISA and CTF managers to make changes to:
- how those investments are held within their products
- the terms agreed between the manager and the account investor
We will enforce compliance strictly where an ISA or CTF does not comply with the amended regulations, including considering the removal of ISA manager status, where necessary.
We will work with managers and their industry representatives over the coming months to make clear what the new regulations require of managers.
3. Annual savings statistics
The annual savings statistics for tax year 2022 to 2023 were published on 19 September 2024.