1. Individual Savings Account (ISA) manager guidance

1.1 Additional Permitted Subscriptions

Where an additional permitted subscription (APS) allowance based on the value at date of death was transferred but not used, and the continuing account of the deceased investor was not closed, there may be a higher additional permitted subscription allowance to which the spouse or civil partner is entitled when the estate is finalised. 

The transferring manager will be unaware if there has been an additional permitted subscription with the receiving manager. Similarly, the receiving manager will be unaware if there has been an increase in value when the estate is finalised.

There is no expectation from HMRC that the receiving manager will request a second APS value from the transferring manager, unless instructed to do so by the investor. Similarly, there is no expectation that the transferring manager will provide a second APS value to the receiving manager unless it has been requested by the investor or the receiving manager.

1.2 National Insurance number

Broadly, an individual will have, or is eligible to apply for, a National Insurance number if they are over the age of 16 and:

• is planning to (and have the right to) work and have a UK National Insurance liability
• is claiming benefits
• applied for a student loan
• is paying Class 3 voluntary National Insurance contributions

The Model Application Form is due to be updated. Managers are reminded the model form is an example only, and exact replication is not mandatory providing all the regulatory obligations are met.

If the investor is eligible and does have their National Insurance number, the form will allow them to confirm this and provide the information. 

The form will also provide the relevant link where the investor can check if they are eligible for a National Insurance number.

If the investor is eligible and does not yet have a National Insurance number, the form will allow them to confirm eligibility and direct them to where to apply for their National Insurance number. 

If the investor is not eligible for a National Insurance number, they can confirm this and continue to open an ISA providing other required conditions are met. 

The form will be amended to read: 

‘Please click on this link Apply for a National Insurance Number for information on National Insurance number which includes a section on who can apply.’

From 6 April 2025, managers can no longer accept an ISA application with a missing or dummy National Insurance number for new accounts. 

There is no change to the guidance for provisionally opening an ISA where all the required information is not provided straight away.

1.3 Repair of an ISA account where the overall subscription has exceeded the legislative limit

Previous year subscriptions

We have updated our guidance for invalid ISA accounts where the investor has exceeded the overall subscription limit in previous years. This is effective on all repair action taken from 6 December 2024. 

Only invalid investments in a repairable ISA will lose their tax exemption. This will be from the date of the first invalid subscription up to the date of repair (and could include current year investments). These dates are specified in a notice of discovery from HMRC to the ISA manager and the valid investments in a repaired ISA account may keep their tax exemption. Subscriptions to a repaired ISA for years other than that covered by the notice of discovery are not affected by that notice.

Current year subscriptions

If as an ISA manager, you know the investor has exceeded the subscription limit with the information you hold, you can void the invalid subscriptions. If you’re informed by the investor about the oversubscriptions, (for example, they’ve subscribed to accounts elsewhere) ISA managers should keep records. We can confirm a phone call is acceptable if a record of the call is held.

1.4 Partial transfers of current year subscriptions

Following feedback from ISA managers, we have updated our guidance for reporting the type of ISA for partial transfers of current year subscriptions on the transfer history form. Where no details of current year subscriptions are provided on the transfer history form, partial transfers of current year subscriptions should be reported as ‘X’ on the transfer history form. The ISA managers’ guidance has been updated to reflect this change.

We would like to draw your attention to a correction to Tax-free savings newsletter 14. In section 2.1 the word ‘no’ was an error.

The paragraph should read:

The ISA regulations have been amended to clarify that, where there is a transfer of part of a current year’s subscription and current year’s subscriptions remain with the transferor after that transfer, the transferring ISA manager is not required to provide details of current year subscriptions to the receiving ISA manager on the transfer history form. 

1.5 Transfers of accounts with no change in manager

We have been asked to confirm requirements where ISAs are transferred from one account to another with the same manager (for example, there is no change in manager). In these cases:

• there must be an instruction to transfer from the investor
• the receiving account must have been opened with a valid application (this may be an existing account that was previously opened with a valid application)
• any current year subscriptions must be correctly reported to HMRC

2. European Economic Area (EEA) Undertakings for Collective Investment in Transferable Securities (UCITS) and the Overseas Funds Regime (OFR)

We would like to draw your attention to a correction in Tax-free savings newsletter 14, where the phrase ‘for fund managers with funds in the Temporary Marketing Permissions Regime (TMPR)’ was accidently omitted.

The text should read: 

ISA and Child Trust Fund (CTF) managers are reminded of the need for fund managers with funds in the TMPR to apply for OFR recognition if they wish to offer (or continue to offer) EEA UCITS in their ISA or CTF products once the transition period has passed.

We are currently discussing with Financial Conduct Authority (FCA) the timetable for transitioning to OFR and the implications for funds which do not apply for OFR recognition. The outcome of those discussions will inform future newsletters. In the interim, managers should take no action regarding funds where OFR recognition had not been sought or has been denied.

3. Extended period for issuing tax calculation (P800) letters

In relation to non-ISA accounts, we would like to make you aware that due to higher than expected volumes, some individuals may have to wait until the new year to receive their P800s. This includes those who think they may have additional tax to pay on savings for the year ending 5 April 2024.

This is slightly longer than in previous years, where HMRC has aimed to complete most end-of-year PAYE reconciliations by the end of November. The process will be complete by the end of March 2025 and PAYE customers are kindly asked not to chase until after that point. GOV.UK guidance is being updated to this effect. 

You can find more information on how to contact HMRC regarding Income Tax enquiries.