Guidance

How the ISA scheme works for ISA managers

How to manage an ISA scheme and the rules you need to follow.

Definitions

ISA stands for Individual Savings Account. ISAs first became available on 6th April 1999. This guidance also contains information on Junior ISAs, which became available from 1 November 2011.

PEP stands for Personal Equity Plan. PEPs first became available in January 1987. The last date on which an investor could subscribe to a PEP was 5 April 1999, but PEPs in existence at that date were allowed to continue. PEPs in existence at 5 April 2008 were reclassified as stocks and shares ISAs.

ISA managers guidance

The ISA managers guidance is for ISA managers. It provides guidance on how to operate the ISA scheme and the rules to be applied from 6 April 2017.

HMRC contact details

HMRC administers the ISA scheme. If you have any queries about the operation of the ISA scheme, you should e-mail: savings.audit@hmrc.gsi.gov.uk or telephone 03000 547 067.

For guidance on the submission of annual returns of individual information (permitted returns media), email tpi.c@hmrc.gsi.gov.uk or telephone 03000 582 413.

For claims and returns for Lifetime ISAs, e-mail savings.audit@hmrc.gsi.gov.uk or telephone 03000 547 067.

For Lifetime API developer support please visit the developer service.

How the ISA scheme works

An ISA is a scheme of investment managed in accordance with the ISA regulations under terms agreed between the ISA manager and the investor. The ISA manager holds investments and claims repayment of income tax deducted at source, by submitting claims to HMRC. Claims in respect of insurance products are made by the insurer providing insurance cover (who may be different to the ISA manager).

From 6 April 2017 investors can subscribe in each tax year to:

  • one cash ISA
  • one stocks and shares ISA
  • one innovative finance ISA
  • one Lifetime ISA

Up to 5 April 2017, investors could subscribe in each tax year to:

  • one cash ISA
  • one stocks and shares ISA
  • one innovative finance ISA

Investors do not pay any tax on any of the income they receive from ISA savings and investments. Nor do they pay any tax on capital gains arising on ISA investments. However, losses on ISA investments cannot be allowed for Capital Gains Tax purposes against capital gains outside an ISA.

The legislation

The main legislation is in:

The detailed rules are contained in the Individual Savings Account Regulations 1998 (SI 1998 No.1870) as amended (ISA Regs).

Investor enquiries

ISA managers should aim to deal with investor questions about ISAs. Where further guidance on a specific investor query is required the ISA manager may contact HMRC by emailing savings.audit@hmrc.gsi.gov.uk but should ensure the information contained within the email does not disclose information pertaining to the investor.

ISA managers may sign post investors who are seeking generic ISA information on to the GOV.UK website or to the personal tax helpline – 0300 200 3312.

The helpline is open from 8.00am to 8.00pm Monday to Friday; and 8.00am to 4.00pm on Saturdays and Bank Holidays.

Published 5 April 2018