Guidance

Tax-free savings newsletter 9 — October 2023

Published 17 October 2023

1. GOV.UK Updates

GOV.UK pages have a date of change at the bottom of the webpage. This includes the first published date alongside the dates of updates and what those updates were.

If you want to compare historic guidance to revised versions, you can use the national archives alongside the current guidance. Historic guidance pages can be found on National Archives.

It’s also possible to search using the date of change on the Archive Timeline.

You can receive alerts about updates to guidance pages by signing up to ‘Get emails about this page‘ at the bottom of the pages.

2. Child Trust Funds

2.1 Child Trust Fund provider list

We have updated the Child Trust Fund provider list to include further information about each provider.

The updated list includes all providers who are active as well as those who are no longer active. This is detailed on each provider’s record. If we have been notified that a provider is no longer active we have provided details, where we are aware, of where those accounts were transferred to. This will help individuals trace the movement of their Child Trust Funds.

If you have any updates to the list including change of details, notifications of bulk transfers, cessation requests or anything in relation to insolvency or administration, contact savings.compliance@hmrc.gov.uk and put ‘Child Trust Fund’ in the subject line.

If you have made or received any transfers that are not included on the providers list, email enquiries.savings@hmrc.gov.uk with details of the transfer.

3. Individual Savings Accounts (ISA)

3.1 Fractional Shares

A fraction of a share is not a share and therefore cannot be held in ISAs. ‘Shares’, as referred to in paragraph 7(2)(a) of the ISA Regulations, refers only to whole shares and not parts or derivatives thereof. A fraction of a share does not give the investor the same legal rights as a whole share does. Fractional shares could only qualify for inclusion in ISAs if the ISA Regulations were amended to allow them. Where fractional shares are an underlying investment in a collective investment scheme or fund (for example an exchange traded fund) they are not subject to the same restrictions.

Any ISA managers who allow fractional shares to be purchased or held within their ISAs as a qualifying investment under Regulation 7(2)(a) should contact HMRC by email at savings.compliance@hmrc.gov.uk.

3.2 Permanent address

We would like to remind managers that they are required to ensure the validity of any subscriptions they accept. This includes, amongst other things, ensuring the investor is resident in the UK, or meets one of the qualifying exemption criteria as stated in the ISA regulations.

Applications and ISA manager reporting must contain the investor’s permanent residential address, including postcode.

All ISA accounts require an application form and declaration to confirm a permanent address. This includes, but is not limited to:

• new ISAs opened for existing customers
• where no subscriptions have been made in a tax year
• where the manager is repairing a mistakenly closed ISA by opening a new account

Where an investor’s permanent residential address is in doubt, ISA managers should confirm the residence status of the investor before accepting any further subscriptions. This includes where returned post leads to accounts being marked, for example ‘gone away‘ or ‘unknown‘. PO Box and care of addresses are not permitted under any circumstances.

If investors provide an address abroad, then this should be used for your reporting. The account does not need to be closed, but no subscriptions can be accepted. If the investor becomes UK resident again at a later date, they will need to make a fresh ISA application.

As part of the bulk transfer process, if the schedule of information provided to the new manager does not include the investors permanent address, blocks should be put on the account to prevent new subscriptions until a fresh application is obtained.

4. Lifetime ISA

We would like to remind Lifetime ISA providers of the following.

4.1 Bank Details

If you need to change your company’s bank details, you must complete a Lifetime ISA Readiness Declaration form. This must be requested from HMRC by emailing savings.audit@hmrc.gsi.gov.uk, and returned to the address provided on the form.

4.2 Applications

A Lifetime ISA application must specify the first year to which it relates to. You must have a declaration containing a statement that the declaration shall have effect for each year in which the applicant makes a payment to a Lifetime ISA, regardless of if they have a break of more than a year. The application must also state that the applicant has not and will not make payments that exceed the annual Lifetime ISA limit and the total annual ISA allowance.

4.3 Property Purchases

You must notify us of all property purchases.

4.4 Bonus Claims

You will be notified if any claim for a bonus is rejected. The notification will set out the reasons for the rejection. If you receive a bonus rejection notification, you must notify the Lifetime ISA account investor within 14 days following the date of receipt of the notice.