Citation and commencement

1. These Regulations may be cited as the Individual Savings Account (Amendment No. 2) Regulations 2000 and shall come into force on 21st August 2000.

Interpretation

2. In these Regulations "the principal Regulations" means the Individual Savings Account Regulations 1998(3) and "regulation" means a regulation of the principal Regulations.

Amendments to the principal Regulations

3. In regulation 2(1)(a) (Interpretation) after the definition of an " account manager" there shall be inserted-

• ""approved employee share ownership plan", "participant", " plan shares" and (in relation to plan shares) "ceasing to be subject to the plan" shall have the meanings given in Schedule 8 to the Finance Act 2000(4), except that, in construing "plan shares", paragraph 115(8), and the words "or securities or rights" in paragraph 116(1), of that Schedule, shall be omitted;".

4.-(1) Regulation 7 (Qualifying investments for a stocks and shares component) shall be amended as follows.

(2) In paragraph (2)(h) for the words from ", shares" to "profit-sharing scheme," there shall be substituted-

"-

(i)shares which the qualifying individual has exercised the right to acquire in accordance with the provisions of a savings-related share option scheme,

(ii)shares which have been appropriated to the qualifying individual in accordance with the provisions of an approved profit sharing scheme, or

(iii)plan shares of an approved employee share ownership plan which cease to be subject to the plan but have remained in the beneficial ownership of the participant,".

(3) In paragraph (10)-

(a)after sub-paragraph (b) the following sub-paragraph shall be inserted-

"(ba)in relation to plan shares mentioned in paragraph (2)(h)(iii), that the shares are transferred to the account manager or his nominee before the expiry of the period of 90 days following the date when the plan shares ceased to be subject to the plan;";

(b)in sub-paragraph (c) for "(a) or (b)" there shall be substituted " (a), (b) or (ba)".

5.-(1) Regulation 34(2)(a) (Capital gains tax-adaptation of enactments) shall be amended as follows.

(2) In subsection (12)(b) treated as added to section 106A of the Taxation of Chargeable Gains Act 1992(5)-

(a)for "(10)(a) or (b)" there shall be substituted "(10)(a), (b) or (ba)";

(b)in paragraph (b)(i) for "7(2)(h)" there shall be substituted " 7(2)(h)(i)";

(c)in paragraph (b)(ii) for "7(2)(h)" there shall be substituted " 7(2)(h)(ii)"; and

(d)for the word "and" which follows paragraph (b)(ii) there shall be substituted-

"or

(iii)in the case of securities which were plan shares of an approved employee share ownership plan before being transferred in the circumstances specified in regulation 7(2)(h)(iii) and (10)(ba), from the date when the securities ceased to be subject to the plan, and".

(3) In the subsection (13) treated as added to section 106A of the Taxation of Chargeable Gains Act 1992, after paragraph (b) there shall be added-

"(c)"approved employee share ownership plan", "plan shares" and (in relation to securities which are plan shares) "ceasing to be subject to the plan" have the meanings given in Schedule 8 to the Finance Act 2000, except that, in construing "plan shares", paragraph 115(8), and the words " or securities or rights" in paragraph 116(1), of that Schedule shall be omitted."

Explanatory Note

(This note is not part of the Regulations)

These Regulations, which come into force on 21st August 2000, amend the Individual Savings Account Regulations 1998 (S.I. 1998/1870, amended by S.I. 1998/3174, and 2000/809) ("the principal Regulations"). The principal effect of the amendments is to add shares deriving from an approved employee share ownership plan to the investments which are qualifying investments for a stocks and shares component, subject to financial and time limits. These regulations also make consequential amendments to regulation 34 of the principal Regulations.