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19 April 2010
Revenue questions 'kick-out' clause
HMRC have published ISA Bulletin 19, which will mainly be of specialist interest, but the taxman has questioned the qualification of stocks and shares ISAs that have a ‘kick-out’ clause and thus do not meet the requirements of ISA Regulations SI 1998 No 1870, Reg 7.
The requirement is that a loan or security is not required to be repaid or repurchased within five years from the date of purchase.
Some ISAs included a kick-out clause where a security would be repurchased if the stock market reached a certain level and this might happen within a five-year period.
This might be something that clients or advisers should check.
