How to open an ISA as an ISA manager

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When you can open an Individual Savings Account (ISA)

You can open an ISA when an investor agrees to your terms and conditions and applies to subscribe.

Investors with a matured Child Trust Fund (CTF) can open an ISA if they

agree to your terms and conditions
apply to transfer by subscription the investments in their matured Child Trust Fund account

An ISA can be opened if you manage a matured Child Trust Fund, but no instructions have been given by the account holder. All the investments in the matured Child Trust Fund will be transferred by subscription to the ISA. The account holder does not have to be resident in the UK.

Investments not held in cash must be transferred in their actual form from the matured Child Trust Fund to the ISA.

You must ignore subscriptions to an ISA transferred from a matured Child Trust Fund for the overall ISA subscription limit. A subscription made to a Lifetime ISA from a matured Child Trust Fund is subject to the overall Lifetime ISA payment limit.

Before you can open the ISA that an investor has applied for, you must hold all of the following:

a valid application, which you have accepted (read the ‘Signature’ section of this guidance)
a valid ISA subscription
the date on which you accept the application form
the date on which the subscription is made

You may accept an application before a subscription is made, but the ISA does not begin until a subscription is made.

You should record the date you accepted the application (which may not be before the date of application) in your records.

An ISA application received near the end of the tax year will be regarded as opened in that tax year if both of the following apply:

you have accepted the application before the end of the tax year
the subscription is made before the end of the tax year

If the account is not set up until after the end of the tax year, the ISA should be shown as opened on 5 April. Before the end of the tax year, we recommend that you make arrangements to review all applications received to make sure:

they are complete (read the ‘Completion of application forms’ section of this guidance)
a valid subscription has been made

Cancellation

You may allow investors the right to cancel their cash subscription to an ISA, or packaged product within an ISA, within a set period after you have received notice of the right to cancel. This should be made clear within the terms and conditions of the ISA.

Provided that the cancellation period does not exceed 30 days (after the notice has been received), investors who cancel their subscription within the cancellation period are exempt from UK Income and Capital Gains Tax on any income or gains arising from the subscription in that period.

Investors who withdraw their subscriptions from an ISA by exercising their right to cancel have made a subscription to an ISA. Where the subscription is cancelled within the set cancellation period, investors will be treated as though they have not subscribed to an ISA.

If a subscription is cancelled within the set cancellation period, you should:

notify investors that the cancelled subscription does not count as a subscription to an ISA
exclude the cancelled subscription from their annual return of information

If a subscription is cancelled after the set cancellation period, you should:

tell investors that the cancelled subscription counts as a subscription to an ISA
include the cancelled subscription on their annual return of information

Where a purchase of a packaged product in an existing ISA is cancelled, the:

ISA remains valid
subscription may be used to purchase other qualifying investments

Find out more about the treatment of requests to cancel Lifetime ISA subscriptions.

Withdrawal

Instead of providing cancellation rights, you may allow investors the right not to proceed with the ISA contract (a pre-contractual right to withdraw). The withdrawal period is 7 to 14 calendar days from when you receive the application to open an ISA.

Where withdrawal rights are offered:

the ISA can only begin on the expiry of the withdrawal period — this means you must receive a request to withdraw by 22 to 29 March of the tax year for which the application is made (depending on whether the withdrawal period is 7 to 14 days)
the client money rules of your regulatory body will apply to the cash subscription during the withdrawal period
any interest which is paid at the end of the withdrawal period will not be exempt from tax and will count towards the subscription limit if it is paid into the ISA

Investors who use their right to withdraw from the ISA contract are free to subscribe to another ISA in the same tax year.

Completion of applications

You should review applications and make sure they are fully completed.

Applications may be accepted provided you have no reason to believe that the investor:

is not, or might not be, entitled to subscribe to an ISA
has given false information in the application

Name

Applications must contain the investor’s full name (which does not have to include a middle name or initial — see the personal information section of Information you need from investors when they apply for an ISA).

An application showing Mr John Joseph Bloggs, Mr John J Bloggs or Mr John Bloggs is acceptable, but Mr J J Bloggs or Mr Bloggs is not.

Address

Applications must contain the investor’s permanent residential address, including postcode. You may hold other addresses on your systems for correspondence purposes.

You can use the address of a:

retirement home
nursing home
hospice or hospital
British Forces Post Office

‘Care of’ or other correspondence addresses are not permitted.

The permanent residential address should include the postcode.

We’ll allow investors without a full permanent residential address to subscribe to an ISA if they meet the following criteria:

they live on a new estate and a postcode has not been allocated — you must get confirmation that a postcode does not exist and keep this with the application, and the investor must give you their postcode once it has been allocated
they live on a houseboat without a home mooring — the investor must provide a correspondence address and confirmation they do not have a permanent residential address

Date of birth

Applications must contain the investor’s date of birth.

If the investor does not know their date of birth, they must give you their year of birth. This exception does not apply to Lifetime ISAs where the applicant must provide a full date of birth.

National Insurance number

Applications should contain either:

the investor’s National Insurance number
confirmation that the investor has not been issued with a National Insurance number but is still eligible to open an ISA

The confirmation can only be used in applications for:

cash ISAs
stocks and shares ISAs
Innovative Finance ISAs

Investors applying for a Lifetime ISA must provide their National Insurance number.

National Insurance numbers consist of:

2 letters
6 numbers
a final letter which is always A, B, C, or D

For example, QQ123456A.

Your validation checks are limited to checking that the format is QQ123456A and that the final character is either A, B, C or D.

National Insurance numbers can be found:

online, through a personal tax account
in the HMRC app
on a document, such as a payslip, P45 or P60

You should get the investor’s full and correct National Insurance number. You can use the ‘universal dummy National Insurance number’ (QQ999999A) if your system requires a National Insurance number and your investor:

has not been issued with a National Insurance number but is still eligible to open an ISA
has a National Insurance number in an old format
has a Temporary Reference Number (TRN) — an example of the format of a TRN is 11 a1 11 11

You should not use any other dummy or substitute National Insurance number. Read the specific guidance for Junior ISAs and Lifetime ISAs.

If you do not receive all the required personal information

You can open an ISA provisionally if you do not receive all the required personal information on an application. You must then obtain the missing personal information within 30 calendar days of opening the ISA. If you do this, the ISA will be valid from the date it was provisionally opened.

The missing information can be provided:

by the investor
by the investor’s agent
from your own records

The information should be added to, or retained, with the application form. If the application form is amended, the person making the entry should initial the amendment.

You should explain to the investor that:

the application could not be accepted because it did not contain all the personal information required under the ISA rules
before the application can be accepted, the investor must provide the missing personal information
an ISA has been opened on a provisional basis
if the missing personal information is not received within 30 calendar days of the date on which the ISA was opened, all of the following will occur:
- the application will be cancelled
- all tax exemptions will be lost
- the ISA will be voided

You must enter all details of personal information on returns of information.

Applying for an ISA on behalf of someone else

An individual cannot apply for an ISA on behalf of someone else unless they are legally authorised to do so.

Lasting power of attorney

You can accept an application from someone holding a lasting power of attorney (LPA). The applicant should be registered with the Office of the Public Guardian, which gives the attorney the power to make financial decisions on someone’s behalf.

Once registered, lasting power of attorney is effective whether or not the donor of the power retains mental capacity.

You must:

see the LPA (or a certified copy of it)
keep a copy of the LPA for your records in case the account is checked by HMRC auditors
check any restrictions on the LPA — it may not be broad enough to cover the opening of an ISA

Court of Protection

You can accept an application from someone appointed as a property and financial affairs deputy by the Court of Protection if:

a person lacks the mental capacity to complete an application
there is not an LPA in place

In this case, you must:

see the Court of Protection deputy order (or a certified copy of it)
keep a copy of the order for your records in case the account is checked by HMRC auditors
check any restrictions to make sure the order is broad enough to cover the opening of an ISA

Contact the Court of Protection if you have queries about:

registering an LPA
matters related to a deputy order
the scope of an LPA or deputy order

The Court of Protection is the arbiter of all matters related to the lasting power of attorney, or deputy order matters relating to people who lack mental capacity.

Alternatives to a registered LPA that can be used to open an ISA

The investor, or someone who is legally authorised to act on their behalf, must make all ISA applications.

You must:

see the appropriate power of attorney or court appointment (or a certified copy of it)
keep a copy of the power of attorney or court appointment for your records in case the account is checked by HMRC auditors
check any limits or restrictions to make sure it covers financial affairs and encompasses the opening (and management) of an ISA

What to do when an investor lacks mental capacity

If the investor cannot make decisions for themselves, you will need an instruction from an authorised person acting on their behalf in the same way you would for any other account.

What can be accepted as authorisation is covered by the following legislation, depending on where the investor lives:

Mental Capacity Act 2005 — England and Wales
Adults with Incapacity (Scotland) Act 2007 — Scotland
Mental Capacity Act (NI) 2016 — Northern Ireland

Information on how to apply for authorisation is available from:

You must be satisfied that the documents provided meet the requirements of the regulations. Acceptable documents may already be in place following the closure or transfer of a Child Trust Fund or Junior ISA account.

You must report the following information of the investor (not the person acting on their behalf) on returns of information:

full name (which does not have to include a middle name or initial) — see the personal information section of Information you need from investors when they apply for an ISA
permanent residential address (including postcode)
date of birth
National Insurance number

Signature

Applications made in writing must contain the original signature of the investor or an authorised person acting on their behalf.

A witnessed mark may be accepted where the investor has full mental capacity but is unable to make their signature.

A photocopy or fax of a signature is not acceptable.

Applications not made in writing, for example online or by telephone, must be made by the investor or an authorised person acting on their behalf.

Before you accept an application, you must establish that the person making the application has the authority to sign or complete it.

How to open an ISA as an ISA manager

When you can open an Individual Savings Account (ISA)

Cancellation

Withdrawal

Completion of applications

Name

Address

Date of birth

National Insurance number

If you do not receive all the required personal information

Applying for an ISA on behalf of someone else

Lasting power of attorney

Court of Protection

Alternatives to a registered LPA that can be used to open an ISA

What to do when an investor lacks mental capacity

Signature

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How to open an ISA as an ISA manager

When you can open an Individual Savings Account (ISA)

Cancellation

Withdrawal

Completion of applications

Name

Address

Date of birth

National Insurance number

If you do not receive all the required personal information

Applying for an ISA on behalf of someone else

Lasting power of attorney

Court of Protection

Alternatives to a registered LPA that can be used to open an ISA

What to do when an investor lacks mental capacity

Signature

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