ISA Regulations amended to allow long-term asset funds in innovative finance ISAs and tighten subscription rules

The Treasury made the Individual Savings Account (Amendment) Regulations 2025 on 23 June 2025, amending the Individual Savings Account Regulations 1998¹.

The regulations define a "long-term asset fund" as "a scheme to which chapter 15 of COLL applies"¹. They add "investments in a long-term asset fund" as qualifying investments for the innovative finance component of an ISA, alongside existing categories¹. The change sits within the Innovative Finance ISA rules, which form part of the wider ISA framework.

From 6 April 2027, an individual may only subscribe to an account that is not a junior ISA account if the account manager has been provided with the individual's national insurance information and has no reason to believe the individual does not meet the requirement of regulation 12(3)(f)¹. The explanatory note states this means an individual may not subscribe unless national insurance information has been provided and the account manager has no reason to believe the conditions in regulation 12(3)(f) are not met¹.

The regulations also change the treatment of replacement subscriptions in flexible accounts. Any replacement of a previous year's subscription may be made only to the account from which the withdrawal of the cash amount it is replacing was made¹. A replacement subscription that is not deemed to be a replacement of a previous year's subscription is treated as a subscription to an account under regulation 4ZA¹. No withdrawal may reduce the current year's subscription amount to less than nil¹.

"The Treasury make these Regulations in exercise of the powers conferred by section 151(1) of the Taxation of Chargeable Gains Act 1992 and sections 694(3) and (5), 695, 695A, 696, 699(2) and 701 of the Income Tax (Trading and Other Income) Act 2005"

The Individual Savings Account (Amendment) Regulations 2025¹

Change	Comes into force
National insurance information required before non-junior ISA subscriptions	6 April 2027, for tax year 2027-28 onwards¹

Why it matters for households

The national insurance information requirement affects anyone subscribing to an adult ISA from 6 April 2027, including those opening a new account or paying into an existing one. Account managers will need the information before a subscription can be accepted. The replacement subscription change affects holders of flexible ISAs who withdraw cash and pay it back: replacements of previous years' subscriptions can only go back to the account the money came from, and withdrawals cannot push the current year's subscription below nil.