J.P. Morgan Personal Investing Limited · DRN-6257289

The complaint X complains about J.P. Morgan Personal Investing Limited (referred to as "Nutmeg"). They're unhappy that their March 2020 and April 2021 contributions to their Stocks and Shares Individual Savings Account ("ISA") were instead allocated to their General Investment Account ("GIA"). They would like the funds treated as ISA contributions and compensation for any losses and tax consequences. What happened X opened their ISA with Nutmeg in 2016. They contributed to it in the 2016/17 and 2017/18 tax years but made no contribution in 2018/19. They then paid in £10,000 in March 2020 and £20,000 in April 2021. They say they believed both payments were being made into their ISA. In February 2025, when their representative contacted Nutmeg to arrange an in-specie transfer, they were told that the 2020 and 2021 contributions had been allocated to their GIA rather than their ISA. Nutmeg says this happened because the ISA became inactive after no contribution was made in the 2018/19 tax year, and under the HMRC rules in force at the time it could not be automatically reactivated. As a result, further payments could not be accepted as ISA subscriptions and were instead allocated to the GIA. X disagreed with Nutmeg and referred their complaint to our service. They say: they weren't clearly warned this would happen; their auto-renew setting should have protected their ISA status; they were told in February 2025 that funds would only go into a GIA if contributions exceeded the £20,000 annual ISA allowance. They want the funds moved into their ISA and any resulting tax liability covered. One of our investigators considered the complaint but didn't think it should be upheld. In summary, he said the ISA had become inactive and Nutmeg had correctly allocated subsequent payments to the GIA. He accepted that Nutmeg's communications could have been clearer but thought they were sufficient overall. X disagreed with the investigator's view and asked for an ombudsman's decision. They also raised the issue of Consumer Duty. The investigator, having considered the additional points, wasn't persuaded to change his view. As no agreement has been reached, the matter has been passed to me for review. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and

-- 1 of 4 --

reasonable in the circumstances of this complaint. Having done so, I agree with the investigator's conclusion for much the same reasons. I don't uphold this complaint. Before explaining why, I'd like to thank the parties for their patience while this matter awaited review by an ombudsman, given the current demand for our service. I also want to acknowledge the strength of feeling X has about this matter. They've provided detailed submissions, which I've read and considered carefully. However, I hope they won't take it as a discourtesy that my findings focus on what I consider to be the central issues. The purpose of my decision isn't to address every single point raised. My role is to consider the evidence presented by X and Nutmeg, and to decide whether Nutmeg treated them fairly and reasonably and, if not, whether that caused them financial loss or other impact. I've also taken account of relevant law and regulations, and what I consider to be fair and reasonable in all the circumstances. Where the evidence is uncertain or incomplete, I've decided what is most likely to have happened on the balance of probabilities. At the relevant time, HMRC rules required an ISA to receive at least one subscription in a tax year to remain active. If no contribution was made, the ISA became inactive and needed to be reactivated before further subscriptions could be made. It's not in dispute that X didn't make a contribution in the 2018/19 tax year. So, their ISA became inactive. Nutmeg's terms and conditions in force at the time explained that auto- renew would only operate if a contribution had been made in the preceding tax year. In these circumstances, there was nothing for auto-renew to act on, and the ISA couldn't continue automatically. I've seen no evidence that Nutmeg could have lawfully treated the 2020 and 2021 payments as ISA subscriptions without the ISA first being reactivated. In those circumstances, Nutmeg allocated the payments to the GIA. While I accept that the limitation of the auto-renew feature may not have been obvious from its name alone, the terms did explain how it operated. They also made clear that X was responsible for maintaining their ISA settings. X says they were told that funds would only go into a GIA if they exceeded the annual ISA allowance. However, the ISA allowance and ISA eligibility are separate issues. Even where a contribution is below the allowance, it can only be paid into an active ISA. In this case, at the material times, there was no active ISA to receive the contributions. I haven't seen persuasive evidence that Nutmeg guaranteed that all contributions below £20,000 would go into an ISA regardless of its status. In any event, such an approach wouldn't have been compliant with the rules in force at the time. I note that the information X refers to – their being told that funds would only go into a GIA if they exceeded the annual ISA allowance – from a call in February 2025, which was several years after the relevant contributions were made. I note that their argument seems to be that what they were told on the call is evidence of what should've happened with the money which was paid in earlier – but I've answered that above. In any event, if Nutmeg did say that on the call – that anything below £20,000 would definitely go in an ISA – X can't have relied on that misleading statement at the time of paying in the money. This argument therefore doesn't persuade me to uphold the complaint. X says Nutmeg didn't clearly tell them that their ISA was inactive or that their funds were being invested in a GIA. They also say the valuation reports and tax packs were unclear and issued after the event.

-- 2 of 4 --

I agree that Nutmeg's presentation, particularly the "My Nutmeg pot" summary and the structure of its reports, could have been clearer. It may not have been immediately obvious, at a glance, that there were separate ISA and GIA holdings. However, I need to consider the overall position rather than individual pieces of evidence in isolation. Taking the following together: • valuation reports were issued regularly and showed ISA contributions as £0.00 during the relevant periods; • from August 2020 onwards, annual tax packs were issued explaining that investments were held outside an ISA or pension wrapper; • the terms and conditions explained that clients could hold both an ISA and a GIA, and that they were responsible for their account settings; and • Nutmeg operated a digital, self-service model, with account information available through its platform. I'm satisfied that sufficient information was available to indicate that the funds were not being held within an ISA, even if it required some attention to detail. In the circumstances, I don't consider that Nutmeg's communications were unclear or misleading. I note X's point that some information was provided after the contributions were made. However, the valuation reports and tax packs were issued regularly over several years. In my opinion, these provided a reasonable opportunity to notice that no ISA contributions were being recorded and to query this with Nutmeg. I also note that X refers to the Financial Conduct Authority's Consumer Duty and sets out what they say are Nutmeg's failures under it. The Duty came into force on 31 July 2023, after the contributions were made so it doesn't apply to that. However, I note some of Nutmeg's conduct, including how it presented account information, continued after that date, and I've considered whether it met the relevant standards during that period too. While its communications could've been clearer, I'm not persuaded that it failed to meet the relevant standards. As I've mentioned above, the valuation reports showed ISA contributions as £0.00, and the tax packs issued from 2020 made clear that funds were held outside an ISA wrapper. That information was there and it was available. I can't safely say that Nutmeg's presentation of it failed to meet the Consumer Duty standard. So, while the point is worth acknowledging, it doesn't change my conclusion. In conclusion, I recognise X's frustration. However, the ISA lapsing rule was a standard HMRC requirement, reflected in Nutmeg's terms. The tax packs sent from 2020 onwards gave clear notice that funds were held outside an ISA wrapper. The information X needed was available to them through multiple channels. And, in a self-service environment, some of the responsibility lies with them. In the circumstances, and on balance, I can't safely conclude that Nutmeg's conduct fell below the standard that would require compensation. I appreciate that X will disagree with my decision. I don't doubt the strength of their feelings. But on the available evidence, and on balance, I can't uphold this complaint and give them what they want. My final decision For the reasons set out above, I don't uphold this complaint.

-- 3 of 4 --

Under the rules of the Financial Ombudsman Service, I’m required to ask X to accept or reject my decision before 13 May 2026. Dara Islam Ombudsman

-- 4 of 4 --