For UK financial advisers only, not approved for use by retail customers. Click here for the customer website.

Individual Savings Accounts (ISAs): planning ideas

2 min read 27 Feb 22

  • How to meet the tax-year-end deadline with last-minute subscriptions.

  • ‘Bed and breakfasting’ anti-avoidance rules don’t apply to ISA wrappers.

Investors who leave their annual ISA subscriptions to the end of the tax year need to be mindful that an ISA begins from the later of:

  • the date on which the ISA manager accepts the application form, and

  • the date on which the subscription is made.
  • By cheque – the date on which the cheque is received and accepted by the ISA manager provided it clears in due course.

  • By direct debit – where the ISA manager can subsequently draw on that, the subscription is made on that later date, provided the cash transfer takes place in due course.

  • By debit card, charge card or credit card – subscription is made the date on which authorisation is given by the investor.

  • By standing order – where the instruction pre-dates the date on which the first payment is due, then subscription is made on that later date, provided the cash transfer takes place in due course.

  • By telegraphic transfer – if the investor transfers the funds directly, the date on which the subscribed funds are received by the ISA manager.

An ISA manager may therefore accept an application before a subscription is made, but if he does the ISA does not begin until a subscription is made.


Mr Philips submits a direct debit authorisation to his ISA manager in March 20X9. The ISA manager is authorised to draw £100 on the 10th of each month as a subscription to Mr Philips's ISA, starting on 10th April 20X9. Despite the authorisation being received in the tax year 20X8-20X9, the ISA subscriptions are made in 20X9-20X0.

The term ‘bed and breakfasting’ is used generally to cover arrangements in which a person sells shares or units only to buy back those of the same class a short time later. The purpose is to create a disposal for capital gains tax purposes but to regain ownership. This may be to realise a loss, which can then be set off against other gains or establish a higher base cost for the asset. TCGA 1992 S105(1) however provides that a disposal must be identified with the acquisition of share/units of the same class within 30 days. This has the effect of reducing or eliminating the gain or loss which would have arisen if the disposal had been identified with shares already held. If however the re-acquisition is within an ISA wrapper then this anti-avoidance rule doesn’t operate, since the capacity of the seller and the purchaser is not the same – i.e. individual sells but ISA manager acquires.

Related insights