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Review looking at Isa lock-ins

The Inland Revenue is reviewing the Isa regulations, saying it plans to produce improved guidelines for providers in the “near future”.

In its Pep and Isa bulletin number five, distributed to Isa managers in April, the Revenue admits the guidance it provides managers could be improved and says it is looking at it “with a view to producing clear guidelines in the near future”.

The bulletin aims to clarify whether providers can lock in investors&#39 funds and prevent withdrawals or transferring to another provider. It says this is not allowed but providers can levy a penalty if investors want access to their funds at short notice.

A spokesman says that while the Revenue is reviewing the situation, it will likely be “months not days” before new guidelines are produced.

The Pep & Isa Managers&#39 Association says it is in discussions with the Government about allowing lock-ins as long as investors are made aware of the situation.

Conservative Shadow Paymaster General Howard Flight says if the Revenue does not act to remedy the situation, he will table an amendment to the Finance Bill on the matter.

Pima director general Tony Vine-Lott says: “Given the low interest rate environment we have at the moment, the restrictions on withdrawals and transfers need to be reviewed.”

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