ISA manager bulletin 75
Published 9 January 2018
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1. Individual Savings Accounts (ISAs) to retain tax advantaged status
In February 2017 draft legislation was published and HM Revenue and Customs (HMRC) received comments from Individual Savings Account (ISA) managers and their representative bodies.
Regulations were laid on 14 November 2017 to allow ISAs to keep their tax advantaged status during the administration of the estate of an ISA investor who dies on or after 6 April 2018.
The amended regulations do not affect the rules when an ISA investor died between 3 December 2014 and 5 April 2018.
HMRC has amended the following chapters of its guidance for ISA managers:
- Chapter 3 – The Investor
- Chapter 6A – Additional Permitted Subscriptions (APS)
- Chapter 9B – Lifetime ISAs
- Chapter 12 – Closing an ISA
- Chapter 14 – Returns of Information
- Chapter 15 – Annual Returns of Statistical Information (market value)
- Chapter 16 – Annual Returns of Statistical Information (subscriptions)
The guidance notes for ISA managers - investor dies extract shows the paragraphs that have been changed following this amendment to the ISA Regulations.
2. Cheques not accepted when ISA managers repay over claimed tax
HMRC can no longer accept cheques from ISA managers where, as a result of making interim claims on form ISA10, there is a net amount due to HMRC.
ISA managers should continue to report any net amounts due to HMRC on forms ISA10 and ISA14. HMRC will write to an ISA manager explaining how the amount due to HMRC can be paid by BACS.
ISA managers must wait to receive the letter from HMRC that includes a unique payment reference number that must be included when making a payment to HMRC’s designated account.
The following sections in Chapter 13 of the guidance for ISA managers will be amended:
| Section | Amendment |
|---|---|
| 13.22 | Where, as a result of making an interim claim, there is a net amount due to HMRC, the manager must report this to HMRC by entering the amount in Box G on the form ISA10. HMRC will write to the ISA manager explaining how this amount can be repaid by BACS. The BACS payment must include the unique payment reference number contained in the letter from HMRC. Do not send a cheque to HMRC. |
| 13.24b | Completing form ISA10 Part 3 – Reconciliation Managers should enter the final amount in Box F (this is the tax claimed in Box A less any tax adjustments in Box E). Where the net result is that the manager still owes monies to HMRC, enter the amount due in Box G. HMRC will write to the ISA manager explaining how this amount can be paid by BACS. The BACS payment must include the unique payment reference number contained in the letter from HMRC. Do not send a cheque to HMRC. |
| 13.37a | Completing form ISA14 Part 5 – Total amount for year Enter in Box K the total amount of monies that are being claimed for the tax year. Where monies are due to HMRC, the amount should be entered in Box L. HMRC will write to the ISA manager explaining how this amount can be paid by BACS. The BACS payment must include the unique payment reference number contained in the letter from HMRC. Do not send a cheque to HMRC. |