Subscription limits

The overall ISA subscription limit is £20,000.

The Lifetime ISA subscription limit is £4,000. Where a payment is made to a Lifetime ISA that’s a new subscription (for example, it’s not a transfer from another type of ISA) this will form part of the overall ISA subscription limit.

The investor can choose to split the overall ISA limit of £20,000 between their ISA accounts, but only if they do not go over the £4,000 Lifetime ISA limit.

From 6 April 2027, any ISA account receiving a subscription will need a National Insurance number or a declaration by the investor that they are not eligible for one.

Managers’ systems must make sure that no more than the overall ISA subscription limit can be invested in the ISA accounts they manage for the investor.

ISA managers may find themselves operating systems that do not communicate with each other as a result of mergers, amalgamations or takeovers, preventing them from complying with the requirements. In these cases, we’d expect that if the systems are updated, the new system will comply.

In the meantime, managers may carry out cross-checks between the systems at regular intervals to identify oversubscriptions. Where they find that the investor has exceeded the overall subscription limit, (and the cross-check takes place within 60 days of the over-subscription) they should remove the over-subscription from the ISA without contacting HMRC.

In relation to Lifetime ISAs, where the overall ISA subscription limit has been exceeded but the Lifetime ISA payment limit has not been exceeded, the excess must be removed from accounts which are not Lifetime ISAs in date order. This is the rule even if the date of first payment into the Lifetime ISA was later in the tax year than the date of first subscription to any other ISA.

If the over-subscription occurred in the current tax year, you can advise the investor that the excess and any related gains will be removed to correct the error. The investor should provide you with instructions on which subscriptions should be removed. If the oversubscription occurred in previous years, you should tell the investor that HMRC will contact them. However, for Lifetime ISAs the manager must contact HMRC.

Managers do not need to establish the amount subscribed to ISAs held with other managers. Investors who subscribe to ISAs held with different managers are responsible for ensuring that they do not exceed the overall subscription limit.

For all ISA types, an investor who has not subscribed up to the limit in any year cannot carry forward the difference and add it to the subscription limit for the next year.

For non-flexible ISAs the subscription limits apply only to the amount subscribed. The amount subscribed is not reduced if an investor makes a subsequent withdrawal.

Cash subscriptions

Investors can subscribe cash to each type of ISA. They must subscribe with their own cash, and this includes payment by:

• cheque
• direct debit
• charge card
• credit card
• telegraphic transfer
• standing order

Cash subscriptions from third parties can be accepted without question unless the ISA manager holds information that shows that the cash does not belong to the investor.

Cash subscriptions from the investor’s employer may be accepted where the employer confirms that the payment will be treated as a relevant payment:

• to an employee for the purposes of the PAYE (Pay As You Earn) regulations
• of earnings for the purposes of Class 1 National insurance contributions

Provided the subscription limits are not exceeded, the ISA regulations allow investors to subscribe by:

• lump sum
• regular or irregular periodic payment

The ISA manager may impose conditions, for example, a minimum lump sum subscription. More information is available in relation to payments to life insurance policies.

Date of subscription

Where the ISA manager has an instruction from the investor and is in control of the collection of the payment, the date of subscription is the date the manager is instructed to collect the payment, provided:

• the instruction was accepted
• the payment is received in due course

This will cover the following payment types.

Cheque payments

The date of subscription is the date on which the cheque is received and accepted by the ISA manager, provided the cheque clears in due course. If the cheque does not clear, the date of subscription depends on whether the original cheque can be re-presented, or whether it must be returned to the investor.

If the manager can re-present the original cheque without having to return it to the investor, the date of subscription is the date on which the cheque was received and accepted by the ISA manager (it has just taken longer to clear).

If the manager has to return the cheque to the investor, the investor has not made a subscription and the amount of the failed subscription will not count towards the ISA subscription limit — if the investor submits an amended or replacement cheque the date of subscription will be the date on which the amended (or replacement) cheque is received and accepted by the ISA manager.

Direct debit payments

The date of subscription is the date on which the ISA manager is authorised to draw on the direct debit, provided that the cash transfer takes place in due course. If that date is earlier than the date on which the direct debit mandate is received and accepted by the ISA manager the date of subscription is the later date (more information is available in circumstances where the investor makes a claim under the direct debit indemnity scheme).

Debit card, charge card or credit card payments

The date of subscription is the date on which authorisation is given by the investor.

In-house transfer payment

The date of subscription from a non-ISA account held with the same manager is the date the investor requested the transfer (as the manager is in control of the payment into the ISA).

Variable recurring payment (VRP)

The date of subscription is the date when the ISA manager is authorised to draw on the VRP provided that the cash transfer takes place in due course. VRP transactions usually settle in real time. If the VRP mandate is received at a later date, the date of subscription is still the VRP transaction date.

Subscription delays

If, due to manager error, there’s a delay between accepting the instruction and the collection of the subscription, the date of the subscription should be treated as the original date intended for the subscription (even if this was in an earlier tax year) provided the manager had accepted the instruction by that date. There’s no need to make an additional report where both the:

• subscription is backdated to an earlier year
• annual information return for that year has been submitted

Where the collection of the payment depends upon another body so that the manager is not in control (and may be unaware that a payment will be made), the date of subscription is the date the manager receives the payment. This will cover standing orders and telegraphic transfers where the instruction to pay sits with someone other than the ISA manager.

If the payment instruction has been received and accepted by the manager but due to manager error there’s a delay before the sum is applied to the ISA, any compensation paid to cover lost growth and income, can be added to the ISA without counting as a fresh subscription.

Direct debit indemnity scheme

Where money is taken out of an account by direct debit by mistake, the account holder can claim the return of the money. The account holder’s bank repays the money to the account holder, and claims back that amount from the recipient bank. In effect, the transaction is unwound.

This might happen where a subscription is made under direct debit to an ISA in year 1 and the manager mistakenly continues to draw on the direct debit in year 2. In these circumstances the investor might make a claim under the direct debt indemnity scheme.

Where an investor makes a successful claim under the direct debit indemnity scheme the subscriptions unwound are treated as if they had never been made. If any income tax has been claimed from the Savings Scheme Office in respect of income earned by the unwound subscription it must be repaid.

A subscription may not be unwound unless a successful claim is made under the indemnity scheme. It’s not sufficient for the investor to simply claim that they subscribed in error.

Where the account is a Lifetime ISA, and the subscription to be unwound has resulted in a government bonus payment, the ISA manager must first notify the Savings Scheme Office and seek instructions to correct the account.

Generation of a cash subscription by the disposal of existing investments

The direct transfer of shares into an ISA is allowed only where the shares were issued to the investor under a:

• schedule 3 Save As You Earn (SAYE) option scheme
• approved profit sharing scheme
• schedule 2 Share Incentive Plan (SIP)

Investments held by an investor outside an ISA can be sold, and the proceeds subscribed to an ISA. Investors and ISA managers should note that the sale of the investments is a disposal for capital gains purposes.

The ISA subscription can be used to buy back the same investments within the ISA provided certain conditions are met. This is a ‘Share Exchange’ (sometimes called ‘Bed and ISA’).

For any acquisition of investments in an ISA, the conditions that must be satisfied are as follows:

• the investments must not be purchased from the investor, or from the investor’s spouse or civil partner
• the investments must be bought at the open market price
• any stamp duty or stamp duty reserve tax paid on the purchase of the ISA investments must be paid out of cash held in the ISA
• where sale and purchase instructions are given on the same day, the funds generated by the disposal of the investor’s shares must be available to meet the purchase on settlement day

Where sale and purchase instructions are given on the same day, the settlement date for the sale transaction could be later than the settlement date for the purchase.

Where instructions are given at the same time to match a purchase with a sale, any short period in which the account goes into deficit on the ISA manager’s systems will not breach the ISA rules.

The subscription date can be the date on which the investor’s units or shares are sold, the settlement date for the purchase or any date in between that the investor chooses, provided the funds generated by the disposal of the investor’s shares are available to meet the purchase on settlement day. A new ISA opened in this way can therefore be opened in the tax year in which the investor’s shares or units are sold.

An investor cannot directly transfer an existing insurance policy into an ISA. However, an existing policy can be surrendered, and the proceeds used to subscribe to an ISA. The surrender would be a chargeable event and the investor may be liable to a taxable gain, unless it’s a ‘time served’ qualifying policy. A subscription could also be made from the proceeds of a part-surrender. Part-surrenders may also be chargeable events.

The proceeds from the surrender or part-surrender of an insurance policy can be subscribed directly to the investor’s ISA if the investor agrees. This also applies where the ISA manager has delegated his ISA functions to an insurer. The insurer may, with the investor’s agreement, retain the surrender proceeds and reinvest them in the ISA. The chargeable event rules will still apply where funds are retained for reinvestment.

Insurers can write a life insurance policy with an option to substitute an ISA policy. Exercise of the option would be a chargeable event, unless the policy was a ‘time served’ qualifying policy. The investor may be liable to a taxable gain.

Long-term investments held outside of the ISA wrapper cannot be sold, and repurchased inside an innovative finance ISA, except where they are available for purchase, at the same price, by any lender or broker in the open market.

Subscription by transfer of shares

Shares can be directly transferred into an ISA (including a Lifetime ISA) if they have been acquired by the investor from either a:

• schedule 3 SAYE option scheme
• schedule 2 SIP

Shares cannot be directly transferred into an ISA in any other circumstances. SIPs were previously known as ‘Approved Employee Share Ownership Plans’. Shares could formerly be transferred from an approved profit-sharing scheme, but this is no longer the case.

Shares or depositary interests representing shares that have emerged from a schedule 3 SAYE option scheme or a schedule 2 SIP may be replaced by other investments before transfer to an ISA following a company reorganisation or reconstruction.

The ISA rules only allow shares or depository interests to be transferred into an ISA. Other investments, such as loan notes, cannot be transferred. So, if the shares or depositary interests representing shares are replaced by investments other than shares or depositary interests the replacement investments cannot be transferred into an ISA.

More information is available about what to do following changes in investments held in stocks and shares ISA after transfer has taken place.

The market value of the shares at the date of transfer counts as the amount subscribed to the ISA. The total of the share value and any other cash subscribed to the ISA must not exceed the subscription limit. ‘Date of transfer’ is the date the manager accepts the shares and will usually be when the manager receives the share certificate.

The investor may be able to transfer registered title to shares in a schedule 3 SAYE option or schedule 2 SIP directly from the registrar or trustees of the scheme to the ISA manager or the ISA manager’s nominee.

The Schedule 3 SAYE option scheme is made up with the SAYE code (see S516(3) Income Tax (Earnings and Pensions) Act (ITEPA) 2003).

Approved profit-sharing schemes are defined in Chapter IV of Part V of the Income and Corporation Taxes Act 1988.

The Schedule 2 Share Incentive Plan is made up in accordance with the SIP code — read S488(3) of ITEPA 2003.

ISA managers can read more information about Share Schemes.

Documentary evidence of shares from schedule 3 SAYE option scheme, approved profit sharing schemes and schedule 2 SIPs

The trustees of the SAYE option scheme or SIP may provide ISA managers with evidence that the shares have been transferred from the schemes. If not, the investor must provide documentary evidence of this to the ISA manager.

Under the SIP the trustees give the employee notice of the award where they award free, partnership or matching shares for the employee. The trustees give the employee notice of the acquisition where they acquire dividend shares for the employee. ISA managers may accept a copy of any of these notices as sufficient evidence that the shares have been transferred from this type of scheme.

ISA managers should not allow transfer of shares into an ISA before the receipt of those shares by the investor, even where the investor holds shares equivalent to those that will emerge.

Time limit for transfer of shares from SAYE option schemes and SIPs

Investors must transfer shares from a:

• Schedule 3 SAYE option scheme into an ISA within 90 days of the exercise of option date
• Schedule 2 SIP into an ISA within 90 days after the shares ceased to be subject to the plan

Where a withdrawal period applies, the transfer of the shares to the ISA cannot take place until after the end of the withdrawal period.

Valuation of share transferred from SAYE options schemes or SIPs

For market value of listed shares, read about ‘the open market price rules’ in how to manage an ISA investment fund.

ISA managers must contact HMRC’s Shares and Assets Valuations team to agree the value of unlisted shares before a transfer can be accepted.

Shares and Assets Valuations will need the following information to give a valuation:

• a copy of the company’s accounts for the last 3 financial years before the proposed date of transfer, and any subsequent interim statement or declaration of interim dividend for the company’s current financial year
• a copy of the rules of the SAYE option scheme, or SIP
• an estimate of the value of the shares, with a brief explanation of how that estimate was made
• details of any recent arms-length transactions in the shares, including the date of each transaction, the amount of shares sold, and the price paid for each share

If the documents and information have been supplied to Shares and Assets Valuations for a previous valuation, reference to that valuation may be sufficient. Shares and Assets Valuations will confirm this.

For non-EU shares the value is, normally, the closing price in sterling for the day on which the investor applies to transfer the shares to their ISA.

Shares may be transferred into an ISA pending agreement of their value. If the agreed value takes the shares (and any cash subscribed) over the subscription limit then excess shares, and a matching proportion of any dividends received, must be taken out of the ISA and returned to the investor to hold outside the ISA. The ISA manager must repay any tax credits claimed in respect of the excess shares to Savings Scheme Office, normally by deducting the amount over-claimed from the next claim.

Company reconstructions

Shares held on behalf of an investor in a schedule 3 SAYE option scheme or a schedule 2 SIP may be replaced by new shares because of a company reorganisation or reconstruction. If the new shares are equated with the old shares for the purposes of capital gains tax, then the new shares can be transferred into an ISA as if they were the original shares.

Where the reconstruction takes place after the shares have been transferred into an ISA, refer to guidance on changes in investments held in stocks and shares ISA.

Stock dividends

Stock or ‘scrip’ dividends received by trustees of an approved profit-sharing scheme must be passed directly to members of the scheme. The dividends cannot be transferred into an ISA and should be declared on the members’ individual tax returns.

Subscriptions that do not count towards the annual subscription limits

Funds transferred from a matured Child Trust Fund (CTF) account

When a CTF account holder turns 18 years of age, they can instruct their CTF provider or another ISA manager to transfer investments held in their CTF. They can do this by subscription to a:

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

The account holder does not have to be resident in the UK. A subscription made from a matured CTF account to an ISA must be disregarded for the overall ISA subscription limit. A subscription made to a Lifetime ISA is subject to the overall Lifetime ISA payment limit.

The holder of a CTF account can instruct their provider to transfer their CTF investments ‘in-specie’ into a Stocks and Shares ISA.

If the holder of the CTF account becomes 18, their CTF provider is an ISA manager and the holder does not instruct on what to do with the investments in their matured account, the ISA manager can make a transfer of:

• cash to a cash ISA 
• investments to a stocks and shares ISA

The ISA must be held in the name of the CTF account holder, not the Registered Contact for the account. No more subscriptions can be made to the CTF, although income (including interest and gains) on investments can be credited to the ISA.

An ISA subscribed to from a matured CTF account must be included in an ISA manager’s annual return of account information.

Defaulted cash account subscription (cash manager in default)

Where a cash ISA manager is declared in default by either the Financial Conduct Authority or the Financial Services Compensation Scheme, the investor may make a single defaulted cash account subscription outside of the annual subscription limits to:

• a new ISA
• an existing ISA

Any defaulted cash account subscription made to a Lifetime ISA will count towards the Lifetime ISA subscription limit for the year, but not the overall annual ISA subscription limit.

A defaulted cash account subscription can be made whether or not:

• any compensation is paid to the investor
• the investor is resident in the UK (except for payments to a Lifetime ISA) — read the residence qualification for more information

The defaulted cash account subscription must be made in a single payment within 180 days of the default occurring.

The maximum defaulted cash account subscription is the amount held in the cash account immediately before the default (including any accrued interest). If the defaulted cash account subscription made is less than the maximum allowed, the investor cannot make a later defaulted cash account subscription to make up the shortfall.

Where a non-flexible cash ISA defaults, the investor must give evidence to the ISA manager, accepting the defaulted cash account subscription of:

• the amount held immediately before the default occurred, including accrued interest
• the date of first subscription, if current year subscriptions had been made to the defaulted account

Additional evidence where the defaulted cash account is a flexible ISA should include the amount of any withdrawals in the year of default that had not been replaced. If the defaulted cash account subscription made is less than the maximum allowed, the investor cannot make a later defaulted cash account subscription to make up the shortfall.

The evidence the investor could show the manager might include:

• a letter from Financial Services Compensation Scheme confirming the account balance at the date of default
• an ISA statement, accompanied by information showing the later payments, and withdrawals
• a copy of a passbook

Defaulted cash account subscriptions do not count towards the annual subscription limits and should not be included as subscriptions on annual returns of information. Details of current year subscriptions, including the date of the first subscription, made to the defaulted cash account manager should be included, as they would be if the account was a transfer in.

Defaulted cash account subscriptions made to a Lifetime ISA count towards the Lifetime ISA limit and must be returned as qualifying additions on the ISA managers return.

There’s no requirement for ISA managers to accept defaulted cash account subscriptions.

Defaulted investment subscription (compensation paid)

If the investor receives compensation outside the ISA wrapper, a defaulted investment subscription can be made if the compensation is for one of the following reasons:

• in respect of the poor performance, loss (in whole or in part), depreciation (or risk of depreciation) of a qualifying investment
• due to the assignment or novation of a qualifying investment where the borrower defaults
• from a debt collector appointed by the ISA manager to recover debt in respect of a qualifying investment where the borrower defaults

This applies regardless of whether the qualifying investment continues to be held in the ISA at the time the payment is made.

Defaulted investment subscriptions from a non-Lifetime ISA may only be made to a Lifetime ISA where:

• the investor is eligible to make payments to a Lifetime ISA
• the subscription does not cause the Lifetime ISA payment limit to be exceeded

A defaulted investment subscription relating to the default of a Lifetime ISA can be made only to a Lifetime ISA and will not count against:

• the overall annual ISA subscription limit
• the Lifetime ISA payment limit
• the rule that payments to a Lifetime ISA can only be made by investors who are under 50 years of age

Defaulted investment subscriptions do not include compensation paid for poor customer service. A defaulted investment subscription cannot be made if compensation is:

• not paid
• paid inside the ISA wrapper

If the compensation is paid in respect of an investment held in a Junior ISA, the defaulted investment subscription can be made to:

• the stocks and shares Junior ISA held by that investor
• a cash Junior ISA

The maximum defaulted investment is the amount of the compensation that was paid. If the defaulted investment subscription made is less than the maximum allowed, the investor cannot make a later defaulted investment subscription to make up any, or all, of the shortfall.

The defaulted investment subscription must be made in a single payment within 180 days of the compensation being paid.

The investor must give the following information to the ISA manager accepting the defaulted investment subscription:

• evidence of the amount of the compensation payment and the date it was paid
• details of the investment in respect of which the compensation was paid
• the full name, address and postcode of the ISA manager who held the investment in respect of which the compensation was paid
• the full name, address and postcode of the person who paid the compensation

Defaulted investment subscriptions do not count towards the annual subscription limits and should not be included as subscriptions on annual returns of information.

Defaulted investment subscriptions to a Lifetime ISA from a non-Lifetime ISA account do count towards the annual subscription limit and must be declared on the Lifetime ISA return.

There’s no requirement for ISA managers to accept defaulted investment subscriptions.

Flexible ISAs

A flexible ISA is an ISA whose terms and conditions allow the investor to replace, in whole or in part, cash they have withdrawn, without the replacement counting towards their annual subscription limit. Offering flexibility is optional for ISA managers.

Where a portfolio ISA includes a flexible product:

• the portfolio ISA should be reported as flexible
• the flexibility rules, in relation to the withdrawal and replacement of funds, should be applied in relation to the flexible products only

Lifetime ISAs and Junior ISAs cannot be offered as flexible ISAs. Where a replacement subscription from a flexible ISA is made to a Lifetime ISA, this will count towards the Lifetime ISA subscription limit (but not the annual overall ISA subscription limit).

Where a Help to Buy ISA is operated under flexible terms and conditions, replacement subscriptions cannot exceed the monthly Help to Buy ISA subscription limits.

Flexibility can be offered in respect of cash only. It can be offered for:

• cash ISAs and any cash held in a stocks and shares
• an innovative finance ISA (including from the sale of investments)

Withdrawals made from the start of the tax year can be treated as having been made from a flexible ISA:

• where the terms and conditions of the ISA have been changed to offer flexibility from a date other than 6 April
• managers systems permit it

No applications or declarations are needed in respect of replacement subscriptions. Subject to managers’ terms and conditions, replacement subscriptions can be made by non-residents.

Replacement subscriptions can be made in cash or by shares transferred from either a:

• schedule 3 SAYE option scheme
• schedule 2 SIP

Flexible ISA withdrawalsWhen areyou deemedwithdraw tocash be:in any year, it comes first from that year’s subscription and reduces the subscription amount for that year.

• firstly

  If ofyou withdraw more than the current yearyear’s subscriptions

• secondlysubscription ofamount, previousthe yearextra funds

amount is considered a withdrawal from the previous year.

Replacement subscriptions are deemed to be:

• firstly of previous year funds
• secondly of current year subscriptions

Where subscriptions and withdrawals are processed on the same day, a net end of day position may be used where the manager’s system is unable to track the exact time of each transaction.

Managers do not need to establish or record whether a replacement subscription relates to current or previous year subscriptions (or any related income or growth).

Where a flexible ISA has current year subscriptions only, any withdrawals over and above the amount subscribed (for example, income or capital growth) can only be replaced in that ISA.

Replacement of flexible ISA funds from the previous year, current year or both must be made:

• to the account from which the withdrawal was made
• in the same tax year

Investors can hold multiple ISAs and can use withdrawn flexible ISA funds to subscribe to other non-flexible ISAs.  This will affect the overall ISA subscription limit and investors must make sure it is not exceeded.

Where a withdrawal, or internal transfer closes a flexible ISA, replacement of any previous year funds withdrawn but not replaced in the current year will be not possible, unless the manager re-opens the ISA. Find out more about when an ISA can be closed.

Income paid away outside of a flexible ISA will count as withdrawals, which can be replaced without counting towards the subscription limit under the:

• terms and conditions of the account
• instruction of the account investor

Withdrawals of cash that cannot be replaced without counting towards the annual subscription limit include the following:

• by way of an ISA transfer to another provider
• by HMRC to cover a tax debt
• on the instruction of HMRC to remove invalid subscriptions
• on cancellation
• on the authority of a court order
• to cover fees and charges
• by the ISA manager to cover penalty charges — for example, when the investor makes a withdrawal which breaks the terms and conditions of a fixed term product

For information about flexible ISA repairs, read how to close, void, or repair an ISA.

Transfers

Where a flexible ISA is transferred, the old manager must provide the new manager with both the:

• ‘net’ subscriptions in the current year
• date of the first subscription counting towards the subscription limit, less any amount withdrawn

Where the net current year subscriptions are £nil, and managers are unable to override the Bacs default date of first subscription of 6 April, the transfer should proceed using the default date of 6 April.

ISA managers not offering flexibility should not capture or report the 6 April date of first subscription if:

• flexible ISAs are transferred in
• their systems do not allow for the capture of a date of first subscription with £nil current year subscription

The old manager should enter X (current year subscriptions not being transferred) in the ‘Type of ISA’ field on the transfer history form when a flexible ISA is transferred and the ‘net’ subscription is £nil or a minus figure because there have been no subscriptions other than: 

• additional permitted subscriptions
• defaulted subscriptions
• Help to Buy ISA reinstatement subscriptions
• flexible ISA replacement subscriptions (where the investor has withdrawn previous year funds)

Where the Type of ISA field is reported as X, no entries are needed for current year subscriptions or the date of the first subscription.

Where a flexible ISA is transferred with ‘net’ current year subscriptions of £nil the ability to replace any current year income withdrawn prior to the transfer will be lost.

Where flexible ISAs are included in a bulk transfer, any withdrawals in that same year but before the date of the bulk transfer, can be replaced with the new manager within the same year without counting towards the subscription limit. This would not apply if the funds were already replaced before the transfer.

Where the new manager does not offer flexibility, they must allow replacement without counting towards the subscription limit.

Reporting

For flexible ISAs, the ‘net’ subscriptions should be reported on the annual returns of information.

Where the ‘net’ subscription is £nil or a minus figure because the investor has withdrawn all the current year subscriptions, the old manager should report:

• £nil current year subscriptions to the new manager
• the date of the first subscription counting towards the subscription limit

Where the terms and conditions of an ISA offer flexibility, the ISA should be ‘flagged’ on the annual returns of information to indicate the terms and conditions permit flexibility. The flag should be used regardless of whether the investor has used the flexibility.

Help to Buy ISA reinstatement

Help to Buy ISA is a feature of a cash ISA. The scheme is administered on behalf of HM Treasury by UK Asset Resolution corporate services.  A Help to Buy ISA is a cash ISA and has no identity or special requirements within the ISA rules. Help to Buy ISAs must follow all the normal cash ISAs requirements, but they also need to satisfy the following scheme rules:

• an investor can save up to £200 each month towards their first home purchase
• the home they buy must have a purchase price of up to £250,000 (or up to £450,000 in London)
• it must be the only home they own
• it must be where they intend to live

The government bonus payment of 25% (up to £3000) will be calculated based on how much the investor has saved.

For an account holder to be eligible for the Help to Buy ISA bonus, funds must be withdrawn from the ISA and the account must have been closed. If the Help to Buy ISA is part of a portfolio ISA, the product the funds have been withdrawn from must be closed.

If a house purchase fails following the withdrawal and account closure the investor can make a Help to Buy ISA reinstatement subscription. This can be anywhere up to the value of the funds withdrawn from their closed account into:

• a cash ISA (which could be the re-opened Help to Buy ISA, a new cash ISA opened for the purpose, or an existing cash ISA)
• a current year stocks and shares, innovative finance ISA or Lifetime ISA

Help to Buy ISA reinstatement subscriptions can be made whether or not the investor is resident in the UK, except for Lifetime ISA. They cannot be made to a Junior ISA.

Help to Buy ISA reinstatement subscriptions can be made to a Lifetime ISA if the investor is resident in the UK and eligible to subscribe to a Lifetime ISA. However, this will count towards the Lifetime ISA subscription limit (but not the annual overall ISA subscription limit).

Only a single Help to Buy ISA reinstatement subscription can be made in respect of a failed house purchase. The investor cannot:

• spread their reinstatement over a number of different accounts
• make a number of different reinstatement subscriptions over a period of time

Help to Buy ISA reinstatement subscriptions must be made within 12 months from the:

• closure date
• date of final withdrawal from the Help to Buy ISA

The correct date will be shown on the purchase failure notice provided by the conveyancer.

Before a Help to Buy ISA reinstatement subscription can be made the investor must provide the ISA manager with:

• details of the amount held in their Help to Buy ISA at the time it was closed
• a copy of the purchase failure notice provided by the conveyancer

Managers can choose not to accept Help to Buy ISA reinstatement subscriptions.