Guidance

Information you need from investors when they apply for an ISA

What information needs to be on ISA application forms if you're an ISA manager.

Applications to subscribe to an ISA

Investors must apply to subscribe, or in the case of a lifetime Individual Savings Account (ISA) must apply to make payments, to an ISA. Applications are valid for subscriptions/payments made in:

  • the year of application
  • each successive year following the year of application, in which the applicant subscribes to the ISA - subject to eligibility rules for each ISA type

This allows, for example, a continuous subscription/payment by direct debit or standing order, provided at least one payment is made in each tax year (but guidance on applications for a single tax year only).

The frequency, amount, and method of payment are matters for the ISA manager and the investor.

A continuous application made before 6 April 2008 will continue to be valid after that date. Other than for a lifetime ISA, applications cease to be valid at the end of a tax year in which the investor fails to make a subscription. Where this happens, the investor must make a fresh application before subscriptions can re-commence. Additional permitted subscriptions, flexible ISA replacement subscriptions, defaulted cash subscriptions, defaulted investment subscriptions and Help to Buy ISA reinstatement subscriptions do not ‘frank’ a gap year for continuous applications.

Investors must also complete a modified application - a transfer application - where:

Applications can be made in writing, electronically or by telephone. No application is necessary to make flexible ISA replacement subscriptions.

Where an investor has made an application to subscribe to an account, other than to a lifetime ISA, but no subscription is made in the tax year to which the application relates, the application will remain valid for a subscription in the next tax year (unless the application is for a single tax year only).

For a lifetime ISA, the application will remain valid for payments in any tax year in which the investor is eligible to subscribe.

See worked example of application to subscribe to an ISA (PDF, 83.7KB, 1 page) .

Investors under 18

An investor can open a cash ISA in the tax year in which they become 16, but only on or after their 16th birthday. They can open a stocks and shares ISA, an innovative finance ISA and a lifetime ISA in the tax year in which they become 18, but only on or after their 18th birthday.

Applications in writing

Applications in writing must be made on an application form. ISA managers should produce their own application forms. These must contain the information, declaration and authority set out below. We recommend that managers use the wording in the specimen application forms below.

There are separate application forms for Cash ISA (example application form) (PDF, 292KB, 2 pages) , Innovative ISA (example application form) (PDF, 292KB, 2 pages) , Lifetime ISA (example application form) (PDF, 306KB, 2 pages) and Stocks and Shares ISA (example application form) (PDF, 305KB, 2 pages) .

Applications in writing include faxes of signed application forms, scanned copies of signed application forms attached to emails and email applications with electronic signatures. Electronic signatures are defined in the Electronic Communications Act 2000.

Applications must specify the first tax year to which they relate. They must also include a declaration by the applicant that the application is to subscribe to a cash ISA, a stocks and shares ISA, an innovative finance ISA, or a Lifetime ISA as the case may be.

For example the application could read:

‘I apply to subscribe for a cash ISA for the tax year 20 / and each subsequent tax year until further notice.’

Or in the case of a Lifetime ISA it could read:

‘I apply to open and make payments to a Lifetime ISA for the tax year 20 /20 and each subsequent tax year in which I make a payment to the account.’

Strictly, the regulations require that the declaration for all investors include the statement that the applicant is 16 years of age or over. However, investors must be 18 years of age or over before they can open a stocks and shares, an innovative finance or a Lifetime ISA. Managers may therefore amend the stocks and shares, innovative finance, or Lifetime ISA declaration by replacing ‘16 years of age or over’ with ‘18 years of age or over’. This convention has been used in the declarations in this guide.

Personal information

Applications must contain the investor’s:

  • full name - which does not have to include a middle name or initial - so 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
  • permanent residential address, including postcode
  • national insurance number, or, for a cash, a stocks and share, or an innovative finance ISA, the manager may accept confirmation from the investor that he or she does not have one (ISA managers should provide a 9 character box to accommodate the format of the national Insurance number - QQ123456C - this does not apply to Lifetime ISAs where a national insurance number must be provided
  • date of birth (ISA managers should provide an 8 character box so that the investor provides the date in the format DDMMYYYY)

Declaration

Applicants must make a declaration that the information given in the application is correct. The following declarations will satisfy the requirements of the regulations.

For a stocks and shares ISA

‘I declare that all subscriptions made, and to be made, belong to me. I am 18 years of age or over. I have not subscribed/made payments, and will not subscribe/make payments more than the overall subscription/payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year. I have not subscribed, and will not subscribe, to another stocks and shares ISA in the same tax year that I subscribe to this stocks and shares ISA. I am resident in the UK for tax purposes or, if not so resident, either perform duties which, by virtue of Section 28 of Income Tax (Earnings and Pensions) Act 2003 (Crown employees serving overseas), are treated as being performed in the UK, or I am married to, or in a civil partnership with, a person who performs such duties. I will inform (insert ISA manager’s name) if I cease to be so resident or to perform such duties or be married to, or in a civil partnership with, a person who performs such duties’

For a cash ISA

‘I declare that all subscriptions made, and to be made, belong to me. I am 16 years of age or over. I have not subscribed/made payments, and will not subscribe/make payments more than the overall subscription/payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year. I have not subscribed, and will not subscribe, to another cash ISA in the same tax year that I subscribe to this cash ISA. I am resident in the UK for tax purposes or, if not so resident, either perform duties which, by virtue of Section 28 of Income Tax (Earnings and Pensions) Act 2003 (Crown employees serving overseas), are treated as being performed in the UK, or I am married to, or in a civil partnership with, a person who performs such duties.
I will inform (ISA manager’s name) if I cease to be so resident or to perform such duties or be married to, or in a civil partnership with, a person who performs such duties’

For a stocks and shares ISA

‘I declare that all subscriptions made, and to be made, belong to me. I am 18 years of age or over. I have not subscribed/made payments, and will not subscribe/make payments more than the overall subscription/payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year. I am resident in the UK for tax purposes or, if not so resident, either perform duties which, by virtue of Section 28 of Income Tax (Earnings and Pensions) Act 2003 (Crown employees serving overseas), are treated as being performed in the UK, or I am married to, or in a civil partnership with, a person who performs such duties. I will inform (insert ISA manager’s name) if I cease to be so resident or to perform such duties or be married to, or in a civil partnership with, a person who performs such duties’

For a Lifetime ISA

‘I declare that all payments made, and to be made, belong to me. Either:

  • I am 18 years of age, or over, and under the age of 40
  • the account is being opened to receive investments from another Lifetime ISA, a defaulted Lifetime ISA subscription or a returned withdrawal after a failed first time residential purchase.

I have not subscribed/made payments, and will not subscribe/make payments more than the overall subscription/payment limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year. I have not made current year payments, and will not make current year payments, that exceed the Lifetime ISA payment limit. I have not made current year payments, or transfers from a Help to Buy: ISA, and will not make current year payments, or transfers from a Help to Buy: ISA, to another Lifetime ISA in the same tax year that I subscribe to this Lifetime ISA,

The declaration shall have effect for each year in which I make a payment to the account, and (other than for accounts opened to receive investments from another Lifetime ISA, a defaulted Lifetime ISA subscription or a returned withdrawal after a failed first time residential purchase) I am resident in the UK for tax purposes or, if not so resident, either perform duties which, by virtue of Section 28 of Income Tax (Earnings and Pensions) Act 2003 (Crown employees serving overseas), are treated as being performed in the UK, or I am married to, or in a civil partnership with, a person who performs such duties. I will inform (insert ISA manager’s name) if I cease to be so resident or to perform such duties or be married to, or in a civil partnership with, a person who performs such duties’.

If the investor is uncertain of their residence position they cannot make an ISA application until they can give an assurance that they are UK resident in the year in which the application is made (see residence qualification). The ISA must not be opened on a provisional basis.

In order to reduce the possibility of obsolescence of application forms caused by the introduction of further ISA types, the current suggested wording within the declaration - ‘I have not subscribed/made a payment to, and will not subscribe/make a payment to, more than the overall subscription limit in total to a cash ISA, a stocks and shares ISA, an innovative finance ISA, and a Lifetime ISA in the same tax year’ may be replaced with a generic statement such as - ‘I have not subscribed/made a payment to and will not subscribe/make a payment more than the overall subscription limit in total to any combination of permitted ISA types in the same tax year.’

Declarations must also contain:

  • a declaration that the information given is correct to the best of the investor’s knowledge and belief
  • an agreement by the investor to the ISA terms and conditions
  • the investor’s signature

Authority

Applications must include certain authorities. The following authorities will satisfy the requirements of the regulations:

‘I authorise (insert ISA manager’s name) to hold my cash subscription/payment, ISA investments, interest, dividends and any other rights or proceeds in respect of those investments and any other cash*. If the ISA is either a cash ISA or Lifetime ISA, invested in a deposit account, alternative wording could be used, such as ‘to hold my cash subscriptions/payments and any interest earned on those subscriptions/payments’, to make on my behalf any claims to relief from tax in respect of ISA investments.’

In addition to the foregoing, and in respect of Lifetime ISAs only, the authority must also specify that the manager has the authority to:

  • hold the Lifetime ISA government bonus,
  • submit Lifetime ISA bonus claims to HMRC on behalf of the applicant
  • withhold and deduct from a balance in the account and to pay to HMRC any charges due on withdrawals
  • make a record in writing in accordance with Regulation 12B paragraph 7(a) of the Individual Savings Account Regulations

  • Policies of life insurance should be held by the investor where the ISA manager is the insurer providing life insurance cover.

Applications for a single tax year only

Except in respect of Lifetime ISAs, managers may produce application forms that allow applicants to subscribe for a single tax year only. If they do, the wording should be changed to read as follows.

‘I apply to subscribe to a cash ISA for 20 / only’, or

‘I apply to subscribe to a stocks and shares ISA for 20 / only’, or

‘I apply to subscribe to an innovative finance ISA for 20 / only’

Where a single year application form is used for a fixed term ISA, the investor will need to complete a fresh application form if they wish to subscribe in the year of maturity or thereafter.

In the case of a Lifetime ISA the application must not be limited to a single tax year only.

Composite application forms

Managers must produce separate application forms for cash ISAs, stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs. Composite application forms (that would permit investors to choose between a cash ISA, a stocks and shares ISA, an innovative finance ISA or a Lifetime ISA) are not acceptable.

Applications not in writing

Where an application is made other than in writing, by telephone, unsigned email or fax, or orally, the investor is required to provide the same information, make the same declaration and provide the same authority and other information as for a written application. The investor’s signature is not required. A telephone checklist (PDF, 141KB, 3 pages) is provided.

There are 2 stages to the not in writing process - the application and then the notification of the declaration. On receipt of the application, the ISA manager must create a ‘written record’ (which includes a record made by electronic means) and notify the applicant of its contents. Notification can be done in several ways.

If the application is made over the:

  • phone, or in face-to-face contact, the declaration can be read back to the applicant as part of the application process
  • internet, a copy of the declaration can be relayed back to the applicant as part of the notification process - the applicant should be given the option to print or save a copy

In all cases, a copy of the declaration can be emailed, faxed or posted to the to the applicant. The declaration must confirm all the details provided by the investor in the application (this includes the name, address, date of birth and national insurance number of the investor). It will satisfy the requirements of the regulations if it takes the same format as a written ISA application form, prefaced by the statement, ‘This declaration records the terms of the application made by the applicant named below’.

The ISA manager must keep a record of the date that the investor was notified of the declaration’s contents. This may simply be a flag on the investor’s record on the manager’s computer system which indicates that the investor has successfully completed the ISA application process and ‘confirmed’ or ‘accepted’ the details in the declaration prepared following an internet application. Managers may want to offer a ‘print’ facility for internet declarations.

The application is valid from the date the ISA manager creates the declaration. On notifying the applicant of its contents (which should take place within 5 business days of the date on which the declaration is created), the ISA manager should advise the applicant that they should notify any corrections to the ISA manager.

Notifications of corrections need not be made in writing. Where corrections are notified the ISA manager must amend the declaration. The amended declaration will take effect from the date on which the original declaration was created. However if, in the original application, the investor declared that they did not have a national insurance number and the manager becomes aware that the investor did have a national insurance number at that time, the manager should void the ISA with effect from the date the original declaration was made. Make a revised declaration, which will re-validate the ISA from the date on which it is created (see applications not in writing), and notify the investor of its contents.

An example of an amendment could be where the investor notifies the manager that part of his national insurance number or date of birth has been transposed. The manager should change the information he holds but a revised declaration need not be issued. Please note that this does not affect Lifetime ISAs - where a national insurance number must be supplied.

Applications made through third parties

(See also applying for an ISA on behalf of someone else)

Applications may be made through third parties such as an Independent Financial Adviser (IFA). Such applications must be authorised by the investor, but they can be passed to the ISA manager by the third party.

Where an application in writing is made through a third party, the application must be signed by the investor.

Where an application not in writing is made through a third party, managers may accept the application if they have no reason to believe (by reference to information in their possession) that the application has not been authorised by the investor.

Where ‘bulk’ applications not in writing are passed on by a third party, ISA managers must ensure that:

  • each investor’s personal details are complete
  • the type of ISA each investor is applying for is clear

Unless ISA managers have information to suggest the contrary, ISA managers may accept that authorities and declarations are satisfied by a statement from the IFA.

In all circumstances where applications not in writing are made through a third party, ISA managers must make a written declaration on behalf of the investor and notify the investor of its contents in accordance with the guidance on applications not in writing. The declaration can be emailed, faxed or posted to the investor by the ISA manager.

ISA terms and conditions

An ISA is a scheme of investment managed in accordance with the ISA regulations by the ISA manager under terms agreed between the ISA manager and the investor (ISA terms and conditions) or their nominee. ‘Nominee’ has its everyday meaning - a person or entity who is named or appointed by another (the nominator) to act on its behalf in a limited capacity or in a specific matter in accordance with any legal or regulatory requirements.

ISA managers’ ISA terms and conditions must specify in writing that:

  • the ISA investments will be, and must remain in, the beneficial ownership of the investor and must not be used as security for a loan
  • except for cash deposits/National Savings products in cash ISAs, insurance policies held with an insurer who is also the ISA manager, and innovative finance ISA investments, the title to the ISA investments will be registered:

    • in the name of the ISA manager
    • in the name of the ISA manager’s nominee (see below)
    • jointly in the name of the ISA manager and the investor
    • jointly in the name of the ISA manager’s nominee and the investor
  • except for cash deposits/National Savings products in cash ISAs, and for insurance policies held with an insurer who is also an ISA manager, share certificates or other documents evidencing title to ISA investments will be held by the ISA manager or as the ISA manager may direct
  • except for cash deposits/National Savings products in cash ISAs, and innovative finance ISA investments, the ISA manager will arrange, if the investor elects, for the investor to receive a copy of the annual report and accounts issued by every company or other concern in respect of shares, securities or units which are held directly in the ISA - if the investor receives these automatically this fact should be stated in the ISA terms and conditions
  • except for cash deposits/National Savings products in cash ISAs, insurance policies, and innovative finance ISA investments, the ISA manager is under an obligation - subject to any provisions made by or under any other enactment, if the investor so elects, to arrange for the investor to be able to:
    • attend shareholders’, securities holders’ or unit holders’ meetings to vote
    • receive, in addition to the annual report and accounts, any other information issued to shareholders, securities holders or unit holders
  • the ISA manager will satisfy himself that any person to whom he delegates any of his functions or responsibilities under the terms agreed with the investor is competent to carry out those functions and responsibilities (delegation of the manager’s functions)
  • the ISA manager must notify the investor if, by reason of any failure to satisfy the provisions of the ISA regulations, an ISA has, or will, become void

either (where the manager allows partial transfers)

  • on the instructions of the investor and within the time stipulated by the investor, an ISA, or part of an ISA, shall be transferred to another ISA manager in accordance with the ISA regulations relating to transfers - transfer rights in relation to non-cash innovative finance ISA investments are available only as set out in the terms and conditions of the account

or (where the manager does not allow partial transfers)

  • on the instructions of the investor and within the time stipulated by the investor, an ISA, with all rights and obligations, shall be transferred to another ISA manager in accordance with the ISA regulations relating to transfers - transfer rights in relation to non-cash innovative finance ISA investments are available only as set out in the terms and conditions of the account

Managers may place a minimum period on the time stipulated by the investor for transfer. This period, which should represent whatever reasonable period the manager requires for practical implementation of transfer requests, must not exceed 30 days and must be consistent with requirements relating to transfers between cash accounts – see cash ISA transfers.

The timescale for cash ISA to cash ISA transfers is outlined in cash ISA transfers. Cash ISA managers do not need to mention the investor’s right to stipulate the transfer timescale as long as the 5-day transfer-out period is quoted. This will also apply to a cash ISA to stocks and shares, innovative finance ISA, or Lifetime ISA transfer if the cash ISA manager adopts the 5-day period for these transfers too.

either (where the manager allows partial withdrawals)

  • on the instructions of the investor and within the time stipulated by the investor, all or part of the investments held in the ISA and proceeds arising from those investments shall be transferred or paid to the investor - withdrawal rights in relation to non-cash innovative finance ISA investments are available only as set out in the terms and conditions of the account

or (where a manager does not allow partial withdrawals)

  • on the instructions of the investor and within the time stipulated by the investor, all the investments held in the ISA and proceeds arising from those investments shall be transferred or paid to the investor - withdrawal rights in relation to non-cash innovative finance ISA investments are available only as set out in the terms and conditions of the account.

Managers may place a minimum period on the time stipulated by the investor for transfer. This period, which should represent whatever reasonable period the manager requires for practical implementation of withdrawal requests, must not exceed 30 days.

Additional rules apply for Lifetime ISA withdrawals for first time residential purchases where the 30 days runs from receipt of information from an eligible conveyancer.

Managers should note that where an investor requests a transfer or withdrawal and the ISA holds units or shares in a UK Undertakings for Collective Investment in Transferable Securities (UCITS), a non-UCITS retail scheme or a recognised UCITS, dealings in which have been suspended in accordance with the Collective Investment Schemes sourcebook (COLL) 7.2 (or any direct foreign equivalent), the minimum period specified by the manager may be extended to 7 days after the suspension ends. It is not necessary to include a mention of possible suspension in the terms and conditions.

A failure to include any of the above in the ISA terms and conditions will invalidate all ISAs opened under those terms and conditions. HMRC Audit will seek a recovery where they find that an ISA manager has omitted any of the ISA conditions, even if they are applied in practice.

Enquiries and further advice

ISA managers may use the wording in the specimen application forms. HMRC will be pleased to advise whether application forms and/or ISA terms and conditions meet the statutory requirements.

Imaging application forms and written declarations

ISA application forms, transfer forms and ISA written declarations can be stored in an imaged form, and the originals destroyed. The optical images will be regarded as applications for the purposes of the ISA rules provided:

  • the imaged application form (and any hard copy printouts) is legible
  • on being given notice in writing by HMRC, the manager will make available within such time as specified in the notice a hard copy of the imaged document
  • on being required to do so by HMRC, the manager will, within a reasonable time, provide a hard copy of the imaged documents.

Retention of forms

Managers must retain the written application form or an imaged copy of it (see imaging application forms and written declarations). As an alternative to retaining the written form, the manager can apply the ‘not in writing’ procedures when they receive a written application. The manager must make a written declaration using the information provided on the form and send this to the investor who then has 30 days to notify any corrections. The other requirements of the guidance on applications not in writing must be met. The original paper declaration can then be destroyed.

Published 5 April 2018