Guidance

Tax-free savings newsletter 16 — April 2025

Published 23 April 2025

1. Individual Savings Accounts (ISA) stocks and shares investments

1.1 American Depositary Receipts and American Depositary Shares

American Depositary Receipts and American Depositary Shares only qualify for inclusion in ISAs if the underlying security is a qualifying investment.

If investors hold American Depositary Receipts or American Depositary Shares, the underlying investment is the shares represented by the American Depositary Receipts and American Depositary Shares.

To be a qualifying investment for stocks and shares ISAs, the underlying shares must be either:

• officially listed on a recognised stock exchange
• admitted to trading on a recognised stock exchange in the UK or EU including Norway, Iceland and Liechtenstein

It is not relevant for ISA purposes whether the depositary receipt itself is listed or traded on a recognised stock exchange. ISA managers must make sure that:

• only qualifying investments are purchased or held within ISAs
• they check the eligibility of underlying shares

For more information, you can check the guidance on stocks and shares ISA investments for ISA managers.

1.2 Changes to investments held in a stocks and shares ISA

It is common for investments to change over time. You need to have systems and processes in place to make sure investments you allow are qualifying:

• at the point of acquiring them
• throughout the time they are held in an ISA

You must remove investments within 30 days of them becoming non-qualifying.

For more information, you can check the guidance on changes to investments held in a stocks and shares ISA.

2. Lifetime ISA (LISA) subscriptions

2.1 First payment date

The opening date of a Lifetime ISA is the date the first payment is made to the account and not the date the investor registers for the account. A Lifetime ISA can only be created once you have received a valid payment from the investor.

Creating an account without a payment can lead to Application Programming Interference (API) issues with the first payment date.

This means investors may:

• be unaware an account has been created
• attempt to open another Lifetime ISA in the same tax year in error

Also, as a reminder, changing the opening date across different tax years can lead to API issues.

For more information, you can read the ‘first payment dates’ section of digital reporting for Lifetime ISAs.

2.2 Subscribing to more than one Lifetime ISA in a tax year

We have received feedback from investors about subscribing to more than one Lifetime ISA in a tax year.

You must ensure that investors are made aware they can only subscribe to one Lifetime ISA in a tax year.

3. ISA managers guidance

3.1 ISA model application form

The ISA model application form was updated on 10 February 2025.

This was to support the requirement for investors to have a National Insurance number, unless they are not eligible for one.

3.2 National Insurance numbers

The ISA manager guidance has been updated for the requirement to collect a National Insurance number from investors for new accounts.

This is unless the investor declares that they are not eligible.

3.3 ISA transfer history forms and guidance

ISA transfer history forms and guidance have been updated. This is to show that ISA managers must enter:

• ‘A’ if all the current year subscriptions are being transferred
• ‘X’ if any current year subscriptions remain after the transfer

3.4 How to close, void or repair an ISA

Updates have been made to the ‘How to close, void or repair an ISA’ guidance.

4. Technical consultation on draft changes to the ISA regulations 

We are working with ISA managers to deliver the digitalisation of ISA reporting. The timescale needed to deliver the change is by April 2027. 

To provide certainty of regulatory obligations for monthly reporting, we are undertaking a technical consultation on draft changes to the ISA regulations, which will:

• require a National Insurance number or confirmation of being ineligible for one, where it is not already held for an investor subscribing to an ISA
• require ISA managers to submit reports of subscription changes monthly
• require ISA managers to take action to correct any oversubscriptions, as directed by HMRC within the next monthly report
• simplify the rules for ‘flexible ISAs’ to allow investors to replace withdrawn current year ISA subscriptions with any ISA manager

Also, there are draft changes to the ISA Regulations to maintain the good management of funds to:

• allow all funds within the Temporary Marketing Permissions Regime (TMPR) in the transitional period to remain as ISA qualifying investments until 1 January 2027
• include Long Term Asset Funds (LTAFs) within the qualifying investment types for the Innovative Finance ISA

We have shared the draft changes to the ISA regulations for response by 30 April 2025 with:

• ISA managers
• trade bodies
• other stakeholders via the digitalisation of ISA collaboration forum

If you are an ISA manager and have not received a copy, you must email enquiries.savings@hmrc.gov.uk and put ‘Technical Consultation’ in the subject line to be sent one.