New ISA legislation
New regulations have been published to assist taxpayers who held ISA’s in the UK branch of the Icelandic bank Landsbanki Islands (trading as Icesave) when the bank defaulted on 8 October 2008.
Whilst the Government agreed to a full payout of deposits, those individuals with ISA accounts faced losing the tax benefit of their ISAs as transfers are only allowed by direct provider transfer. The new regulations allow individuals to put the compensation payments back into an ISA with another provider by 5 October 2009 and to preserve the tax benefits of so doing.
The regulations also introduce the following four minor amendments:
- To enable all non EU EEA UCITS (Undertakings for Collective Investment in Transferable Securities) to become qualifying investments within UK ISAs;
- To enable ISA providers to introduce Bankers Automatic Clearing Service (BACS) payments for Cash ISA transfers;
- To remove the requirement that a withdrawal or transfer must be made within 28 days where a collective investment scheme is suspended in accordance with FSA rules;
- To bring the procedures for making non-written ISA applications in line with a similar scheme, the Child Trust Fund.