Model the ISA subscription limits, with per-person ISA subscriptions and balances

changelog.d/2710-lisa-above-cap.added.md

@@ -0,0 +1 @@
+Added the 20% Lifetime ISA withdrawal charge for a first-home purchase above the £450,000 property price cap that meets every other condition, for withdrawals from 29 October 2026 (ISA Regulations 1998 Schedule paragraphs 5 and 6A, inserted by SI 2026/1130); the annual model applies it from fiscal 2027-28.

changelog.d/2710.added.md

@@ -0,0 +1 @@
+Added the ISA annual subscription limit (ISA Regulations 1998 reg 4ZA: £15,240 from 2015-16 and £20,000 from 2017-18), a cash ISA limit for people under an age at the end of the tax year that current law leaves unset (Budget 2026 retains £20,000 for cash, so SI 2026/1018's £12,000 for under-65s is a reform setting), per-person cash and stocks-and-shares ISA subscription inputs, and `cash_isa_subscriptions_above_limit` and `isa_subscriptions_above_limit`, the subscriptions a limit leaves out.

changelog.d/2710.changed.md

@@ -0,0 +1 @@
+The household `cash_isa` and `stocks_and_shares_isa` now sum new per-person `cash_isa_balance` and `stocks_and_shares_isa_balance` inputs. A dataset or situation that stores a household total keeps it, and stored totals still project with savings, but a household total given for one year no longer carries into later years.

docs/book/assumptions/growthfactors.md

@@ -103,7 +103,7 @@ We derive these rates as calendar-year nominal GDP growth from the OBR's March 2
 |-------------|------|------|------|------|------|------|------|------|
 | Growth rate | 10.0% | 5.2% | 3.9% | 4.7% | 2.9% | 3.3% | 3.2% | 3.1% |
 
-We use per capita GDP for these variables: `benunit_reported_capital`, `capital_gains`, `capital_gains_badr`, `capital_gains_before_response`, `capital_gains_carried_interest`, `capital_gains_residential_property`, `cash_isa`, `corporate_wealth`, `directly_held_shares`, `dividend_income`, `gross_financial_wealth`, `household_lifetime_isa_balance`, `lifetime_isa_balance`, `lump_sum_income`, `main_residence_value`, `maintenance_income`, `miscellaneous_income`, `mortgage_capital_repayment`, `net_financial_wealth`, `non_residential_property_value`, `other_investment_income`, `other_residential_property_value`, `owned_land`, `pension_credit_reported_capital`, `pension_income`, `private_pension_wealth`, `private_transfer_income`, `property_income`, `property_rental_income`, `savings`, `savings_interest_income`, `spousal_maintenance_income`, `stocks_and_shares_isa`, `sublet_income`, `uc_reported_capital`, `unit_and_investment_trusts`
+We use per capita GDP for these variables: `benunit_reported_capital`, `capital_gains`, `capital_gains_badr`, `capital_gains_before_response`, `capital_gains_carried_interest`, `capital_gains_residential_property`, `cash_isa`, `cash_isa_balance`, `corporate_wealth`, `directly_held_shares`, `dividend_income`, `gross_financial_wealth`, `household_lifetime_isa_balance`, `lifetime_isa_balance`, `lump_sum_income`, `main_residence_value`, `maintenance_income`, `miscellaneous_income`, `mortgage_capital_repayment`, `net_financial_wealth`, `non_residential_property_value`, `other_investment_income`, `other_residential_property_value`, `owned_land`, `pension_credit_reported_capital`, `pension_income`, `private_pension_wealth`, `private_transfer_income`, `property_income`, `property_rental_income`, `savings`, `savings_interest_income`, `spousal_maintenance_income`, `stocks_and_shares_isa`, `stocks_and_shares_isa_balance`, `sublet_income`, `uc_reported_capital`, `unit_and_investment_trusts`
 
 ## Council tax
 

docs/book/assumptions/isa-inputs-and-capital-flows.md

@@ -96,14 +96,24 @@ established by the household tests.
 
 ## Capital stocks
 
-`cash_isa` is a household stock separate from `savings`. Ordinary accessible
-cash ISA balances enter the capital sources for Universal Credit, Housing
-Benefit, Pension Credit, Income Support, income-based JSA and income-related
-ESA. There is no general ISA-wrapper disregard and no generic 10% sale-cost
-deduction for cash. Existing source-specific disregards, ownership allocation
-assumptions and reported-capital overrides still apply. A complete reported
-capital amount already includes relevant ISA holdings; it replaces covered
-components rather than adding them again.
+`cash_isa` is a household stock separate from `savings`. It sums the members'
+`cash_isa_balance`, and `stocks_and_shares_isa` sums their
+`stocks_and_shares_isa_balance`, as `household_lifetime_isa_balance` sums
+`lifetime_isa_balance`. A dataset or situation that stores a household total
+keeps it: the total is recomputed only when it is not stored, and a stored
+total is projected with `savings` or `corporate_wealth`. A household input is
+used only for the year it is given for; the person balances carry the
+variable-level uprating to later years. The means tests read the household
+totals, so a person's balance is pooled with the household's other financial
+capital rather than attributed to their own benefit unit.
+
+Ordinary accessible cash ISA balances enter the capital sources for Universal
+Credit, Housing Benefit, Pension Credit, Income Support, income-based JSA and
+income-related ESA. There is no general ISA-wrapper disregard and no generic
+10% sale-cost deduction for cash. Existing source-specific disregards,
+ownership allocation assumptions and reported-capital overrides still apply. A
+complete reported capital amount already includes relevant ISA holdings; it
+replaces covered components rather than adding them again.
 
 For example, £5,000 savings and a £3,000 ordinary cash ISA give £8,000 UC
 capital. [UC regulation 72](https://www.legislation.gov.uk/uksi/2013/376/regulation/72)
@@ -167,26 +177,105 @@ Only the bounded qualifying home-payment portion is exempt. The residual
 gross withdrawal is charged at 25%, or 20% during the temporary coronavirus
 period. These rules come from [Schedule paragraphs 4–7 and 5A](https://www.legislation.gov.uk/uksi/1998/1870/schedule).
 
+From 29 October 2026, a purchase that meets every one of these conditions
+except the £450,000 price cap pays 20% on the home payment instead of 25%
+(Schedule paragraphs 5 and 6A, inserted by
+[SI 2026/1130](https://www.legislation.gov.uk/uksi/2026/1130/made)). The rest
+of the withdrawal still pays 25%. `gov.hmrc.isa.lifetime.above_cap_purchase`
+holds the rate and its start. Parameters are read on 30 April, so the model
+applies the 20% rate from fiscal 2027–28; a withdrawal from 29 October 2026 to
+5 April 2027 pays 25% in the model. When such a purchase fails and the money
+is returned, the charge is restored to the account (paragraph 10A), so a
+returned withdrawal should be left out of the inputs.
+
 The model records `lifetime_isa_bonus` in government spending and
 `lifetime_isa_withdrawal_charge` in government revenue. Both are capital
 flows, excluded from household current benefits, taxes and net income. The
 flows do not automatically update a supplied account balance. This is an
 accounting convention for the model's current-income measures.
 
+## Subscription limits
+
+`gov.hmrc.isa.annual_subscription_limit` is the £20,000 limit on a person's
+subscriptions in a tax year to all their ISAs other than Junior ISAs
+([ISA Regulations regulation 4ZA(1)](https://www.legislation.gov.uk/uksi/1998/1870/regulation/4ZA)).
+It was £15,000 from 1 July 2014 and £15,240 from 6 April 2015. The model reads
+these limits from 2015–16; 2014–15 and earlier years, with their lower limits
+and cash sub-limits, are not modelled.
+Cash has had no limit of its own since 1 July 2014, so
+`gov.hmrc.isa.cash.subscription_limit` is infinite and cash counts only
+towards the annual limit.
+[SI 2026/1018 regulation 6](https://www.legislation.gov.uk/uksi/2026/1018/regulation/6/made)
+sets a £12,000 cash limit from 6 April 2027 for a person who is 64 or under
+at the end of the tax year, but Budget 2026 retains the £20,000 cash limit
+for all savers, with secondary legislation to be laid in November 2026
+([OOTLAR paragraph 2.5](https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar)).
+Current law here therefore has no cash limit, and the £12,000 is a reform
+setting. `gov.hmrc.isa.cash.full_limit_age` (65) is the age at which a cash
+limit stops applying. `cash_isa_subscription_limit` reads the age at the end
+of the year (5 April) from the date of birth, so a person aged 64 on
+6 October whose 65th birthday falls on or before 5 April has the annual limit
+for cash.
+
+The inputs are per-person flows in the year: `cash_isa_subscriptions`,
+`stocks_and_shares_isa_subscriptions` and the existing
+`lifetime_isa_payments`, which `isa_subscriptions` adds up. They sum over
+all of a person's accounts of each type, net of current-year subscriptions
+withdrawn from a flexible ISA. They exclude transfers between ISAs, interest
+and growth, and the subscriptions that
+[regulation 5D](https://www.legislation.gov.uk/uksi/1998/1870/regulation/5D)
+disregards, such as replacement subscriptions to a flexible ISA, additional
+permitted subscriptions, defaulted subscriptions and transfers from a matured
+Child Trust Fund
+([HMRC guidance](https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors)).
+`lifetime_isa_payments` includes transfers into a Lifetime ISA from other
+ISAs, which count towards the Lifetime ISA limit but are not new
+subscriptions for the annual limit, so the total overstates subscriptions
+where that input includes them. A withdrawal charge restored under Schedule
+paragraph 10A is neither a subscription nor a Lifetime ISA payment (SI
+2026/1130 regulations 3 and 4). Innovative finance ISAs are not included.
+The inputs are not uprated: growing them would put people who pay in exactly
+the annual limit above it in the baseline. Nominal subscriptions grow, so flat
+amounts understate how much a lowered limit leaves out in later years. A
+producer can grow them instead and cap each person at the limit in force.
+
+The model compares the inputs with the limits in force and does not cap them.
+`cash_isa_subscriptions_above_limit` is cash above the person's cash limit,
+and `isa_subscriptions_above_limit` is the total above the annual limit. Cash
+above both limits counts in both, so the two must not be added. Both are zero
+for data that met the limits in force when it was collected. A reform that
+lowers a limit reports what it leaves out. For example, a person aged 40
+paying £20,000 into cash ISAs in 2027–28 has £8,000 above a £12,000 cash
+limit.
+
+The model reports these amounts and no more. It does not say where money
+above a limit goes or change any tax for it: the model is static by year and
+the data has no ISA history, so it holds no balances moved out of ISAs in
+earlier years. A population run gives the first year's amount above a limit;
+the tax on money moved out of ISAs over several years rests on the official
+costing.
+
 ## Annual resolution and coverage
 
 A bare year Y represents the fiscal year from 6 April Y to 5 April Y+1.
 Parameters retain their legal effective dates; the annual model samples
 rates at 30 April. Fiscal 2020 therefore uses the temporary 20% withdrawal
 charge and fiscal 2021 uses 25%. The annual model cannot distinguish a
-withdrawal in late March 2020 within fiscal 2019. Annual ages and purchase
+withdrawal in late March 2020 within fiscal 2019. Likewise, the 20% charge for
+a purchase above the price cap has effect for withdrawals from 29 October
+2026, but fiscal 2026 samples 30 April 2026. So a 2026–27 run charges 25% on
+such a withdrawal made from 29 October 2026 to 5 April 2027 (159 of the
+year's 365 days), and the 20% applies from fiscal 2027. Annual ages and purchase
 conditions similarly represent the relevant transactions at one annual
 status. Multiple transactions with different conditions require externally
 prepared qualifying amounts.
 
-Help to Buy ISA bonuses are not modelled here. Subscription-limit compliance,
-Junior ISAs, Child Trust Funds and a proposed First Time Buyer ISA are also
-outside this implementation. Population data without payment, withdrawal or
-non-cash-interest detail inputs retain zero for those new flows. Household
-tests establish the rules; population effects require a separate certified
-dataset measurement.
+Help to Buy ISA bonuses are not modelled here. Junior ISAs, Child Trust
+Funds, transfers between ISA types (including the SI 2026/1018 restrictions on
+transfers into cash ISAs) and the First Time Buyer ISA announced at Budget
+2026 for April 2029 are also outside this implementation. Population data
+without payment, withdrawal, subscription or non-cash-interest detail inputs
+retain zero for those flows; data without per-person ISA balances keeps its
+stored household totals. Household tests establish the rules; population
+effects require a separate
+certified dataset measurement.

docs/engineering/skills/dataset-sources.md

@@ -126,6 +126,35 @@ advance apprenticeship tenure, so a producer or caller must supply changed
 classifications for later years rather than rely on a carried input to
 expire automatically.
 
+## ISA balances and subscriptions
+
+Producers can export per-person `cash_isa_balance` and
+`stocks_and_shares_isa_balance`. The household `cash_isa` and
+`stocks_and_shares_isa` sum them, but a stored household column takes
+precedence, so existing datasets that store only the household totals keep
+them, projected with `savings` and `corporate_wealth` through
+`uprating_indices.yaml`. A producer that exports the person balances should
+either stop exporting the household totals or keep them equal to the sums;
+the model does not reconcile the two.
+
+`cash_isa_subscriptions` and `stocks_and_shares_isa_subscriptions` are
+annual person flows, summed over all of a person's accounts of each type, that
+count towards the ISA subscription limits, with `lifetime_isa_payments` for
+Lifetime ISAs. Projection carries them flat, because growing them would put
+people who pay in exactly the annual limit above it in the baseline. Nominal
+subscriptions grow, so flat amounts understate how much a lowered limit leaves
+out in later years; a producer can grow them itself and cap each person at the
+limit in force. The model does not cap them at the limits: a producer should
+export subscriptions as observed, so a reform that lowers a limit shows what
+it leaves out. Observed subscriptions stay within the £20,000 annual
+limit, which the three inputs share, so an imputation should draw them
+jointly. Drawn separately, for example from tables that leave Lifetime ISAs
+out, they can sum above the limit and put people above it in the baseline,
+where `isa_subscriptions_above_limit` should be zero. Absent columns default
+to zero, so a change to an ISA limit changes nothing on such data.
+[Microcosm issue 1415](https://github.com/PolicyEngine/microcosm/issues/1415)
+covers imputing the subscriptions and balances.
+
 ## Defaults
 
 `policyengine_uk` does not silently choose a default dataset when no situation is

policyengine_uk/data/uprating_indices.yaml

@@ -105,7 +105,11 @@ gov.economic_assumptions.yoy_growth.capital_gains:
 - capital_gains_carried_interest
 gov.economic_assumptions.yoy_growth.obr.per_capita.gdp:
 - benunit_reported_capital
+# cash_isa and stocks_and_shares_isa sum the person balances listed with
+# them; they are listed so a dataset that stores the household totals
+# grows them like their parts.
 - cash_isa
+- cash_isa_balance
 - corporate_wealth
 - directly_held_shares
 - dividend_income
@@ -138,13 +142,12 @@ gov.economic_assumptions.yoy_growth.obr.per_capita.gdp:
 - non_cash_isa_cash_interest
 - spousal_maintenance_income
 - stocks_and_shares_isa
+- stocks_and_shares_isa_balance
 - sublet_income
-- cash_isa
 - consumer_debt
 - mortgage_debt
 - rent_paid_as_boarder
 - rent_paid_as_lodger
-- stocks_and_shares_isa
 - owned_company_capital
 - owned_company_holding_value
 - owned_company_trade_assets

policyengine_uk/parameters/gov/hmrc/isa/annual_subscription_limit.yaml

@@ -0,0 +1,23 @@
+description: >
+  Limit on a person's total subscriptions in the tax year to ISAs other than
+  Junior ISAs: cash, stocks-and-shares, innovative finance and new Lifetime ISA
+  payments together. It was £15,000 from 1 July 2014 and £15,240 from 6 April
+  2015. The annual model reads it from 2015-16; 2014-15 and earlier years, with
+  their lower limits and cash sub-limits, are not modelled.
+values:
+  2014-07-01: 15000
+  2015-04-06: 15240
+  2017-04-06: 20000
+metadata:
+  label: ISA annual subscription limit
+  period: year
+  unit: currency-GBP
+  reference:
+    - title: Individual Savings Account Regulations 1998 regulation 4ZA(1)
+      href: https://www.legislation.gov.uk/uksi/1998/1870/regulation/4ZA
+    - title: Individual Savings Account (Amendment No. 2) Regulations 2014 regulation 6(a)(i)
+      href: https://www.legislation.gov.uk/uksi/2014/1450/regulation/6/made
+    - title: Individual Savings Account (Amendment) Regulations 2015 regulation 3(1)
+      href: https://www.legislation.gov.uk/uksi/2015/608/regulation/3/made
+    - title: Individual Savings Account (Amendment) Regulations 2017 regulation 5
+      href: https://www.legislation.gov.uk/uksi/2017/186/regulation/5/made

policyengine_uk/parameters/gov/hmrc/isa/cash/README.md

@@ -0,0 +1 @@
+# Cash ISA

policyengine_uk/parameters/gov/hmrc/isa/cash/full_limit_age.yaml

@@ -0,0 +1,15 @@
+description: >
+  Age a person must have reached by the end of the tax year (5 April) for the
+  cash ISA subscription limit not to apply. Their cash subscriptions then count
+  only towards the annual subscription limit. It matters only where a cash
+  limit is set, as SI 2026/1018 regulation 6 sets one for people aged 64 or
+  under.
+values:
+  2027-04-06: 65
+metadata:
+  label: Cash ISA full limit age
+  period: year
+  unit: year
+  reference:
+    - title: Individual Savings Account (Amendment) (No. 2) Regulations 2026 regulation 6
+      href: https://www.legislation.gov.uk/uksi/2026/1018/regulation/6/made

policyengine_uk/parameters/gov/hmrc/isa/cash/subscription_limit.yaml

@@ -0,0 +1,27 @@
+description: >
+  Limit on a person's subscriptions in the tax year to cash ISAs while they are
+  under the cash ISA full limit age at the end of the year. Cash has had no
+  limit of its own since 1 July 2014, so cash subscriptions count only towards
+  the annual subscription limit. SI 2026/1018 regulation 6 sets £12,000 from 6
+  April 2027 for people aged 64 or under, but Budget 2026 retains the £20,000
+  limit for all savers, with secondary legislation to be laid in November
+  2026, so cash keeps no limit of its own here. Set this to 12,000 to model the
+  lower limit.
+# From 6 April 2027 this rests on Budget 2026 (OOTLAR para 2.5) until the
+# November 2026 instrument is laid: tracked in
+# https://github.com/PolicyEngine/policyengine-uk/issues/2728.
+values:
+  2014-07-01: .inf
+metadata:
+  label: Cash ISA subscription limit
+  period: year
+  unit: currency-GBP
+  reference:
+    - title: Individual Savings Account Regulations 1998 regulation 4ZA
+      href: https://www.legislation.gov.uk/uksi/1998/1870/regulation/4ZA
+    - title: Individual Savings Account (Amendment No. 2) Regulations 2014 regulation 6(a)(ii) (omits the cash sub-limits in regulation 4ZA(1)(a) and (b))
+      href: https://www.legislation.gov.uk/uksi/2014/1450/regulation/6/made
+    - title: Individual Savings Account (Amendment) (No. 2) Regulations 2026 regulations 1 and 6
+      href: https://www.legislation.gov.uk/uksi/2026/1018/regulation/6/made
+    - title: Budget 2026, overview of tax legislation and rates, paragraph 2.5
+      href: https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar

policyengine_uk/parameters/gov/hmrc/isa/lifetime/above_cap_purchase/README.md

@@ -0,0 +1 @@
+# First-time purchase above the property price cap

policyengine_uk/parameters/gov/hmrc/isa/lifetime/above_cap_purchase/in_effect.yaml

@@ -0,0 +1,17 @@
+description: >
+  Whether a Lifetime ISA withdrawal towards a first home that meets every
+  first-time purchase condition except the property price cap pays the reduced
+  above-cap charge, rather than the withdrawal charge. It has effect for
+  withdrawals from 29 October 2026. The annual model reads parameters on 30
+  April, so it applies from fiscal 2027-28: in the model, a withdrawal from 29
+  October 2026 to 5 April 2027 pays the withdrawal charge.
+values:
+  2000-01-01: false
+  2026-10-29: true
+metadata:
+  label: Lifetime ISA reduced charge above the price cap in effect
+  period: year
+  unit: bool
+  reference:
+    - title: Individual Savings Account (Amendment) (No. 3) Regulations 2026 regulation 1
+      href: https://www.legislation.gov.uk/uksi/2026/1130/regulation/1/made