Innovative Finance ISA
5 (to 12) Reasons to Open a Proplend IFISA?
- Earn 5-12% p.a. (before fees & bad debts) investing through our Innovative Finance ISA – fixed income, tax free
- Invest in any platform loan using ISA Subscriptions and Transfers – all loans secured by income producing UK commercial property
- Freedom to withdraw and ‘return’ funds from/to your Flexible Proplend IFISA during the same tax year – without restrictions or charges
- Self-select the loans and risk-adjusted investment returns you’re comfortable with – no defaults or investor losses to date
- Reasurrance of an active secondary market to sell loan investment before the end of the term – should your circumstances change
Attractive Peer to Peer Returns on Secured Loans – Tax Free
You can use some or all your annual ISA subscription allowance to invest in P2P lending through an Innovative ISA (IFISA). Proplend IFISA is now open to new customers as well as existing registered lenders.
Individual Savings Accounts (ISAs) have been around for approaching 20 years now, offering UK savers the opportunity to earn interest and benefit from capital gains – tax free. From April 2016, IFISA was introduced alongside the traditional Cash and Stocks and Shares ISAs in recognition of the increasing popularity of alternative investments and persistently low UK savings rates.
More and more investors are willing to accept some capital risk as they go in search of better rates of return.
Increasing Limits – More Scope to Diversify Your Investments
ISA allowances have increased over the years to the current 2017-18 limit of £20,000. Individuals can make new savings (‘subscriptions’) each year up to this limit, across all the ISA types. The new ISA allowance gives UK savers even more opportunity to diversify their investments and strike a risk-reward balance that they’re comfortable with.
Whilst the high rates of fixed income returns available from P2P lending are particularly attractive, Proplend understands that the steps it takes to minimise lender risk can make all the difference to ‘Lenders’. Our property-secured ISA investments are each secured with a first legal charge over an income producing UK commercial property.
Innovative Finance ISA Availability
Although it’s still relatively early days for the Innovative Finance ISA, new providers are entering the market all the time. In 2017 the IFISA has started to truly come to market as the list of providers being granted FCA approval and ISA Manager status has started to grow.
Proplend was granted full authorisation from the Financial Conduct Authority (FCA) in February 2017 and ISA Manager status in March. Our IFISA launched to existing platform lenders on 30 May, with availability extended to new customers from 1 August.
Proplend’s Innovative Finance ISA enables investors to earn attractive, risk-adjusted returns, completely tax free, either by investing the current year’s ISA allowance or through transferring in ‘ring-fenced’ ISA funds from previous tax years. IFISA Lenders will hand-pick their loans and tranche investments in the same way that our non-ISA Lenders currently do.
You can read our comprehensive Innovative Finance ISA guide to find out how peer to peer ISAs work in general and how Proplend’s IFISA works in particular.
Invest using Current Annual Allowances and ISA Transfers
You can invest in IFISA by transferring your ISA pot(s) from previous tax years – it’s not all about having cash and ISA allowance spare to subscribe this tax year.
The funds you’re looking to transfer to your IFISA must still be invested in an ISA and would need to remain there until requested by the new provider. ‘Transferred’ ISA funds must move directly from provider to provider. Do not withdraw any funds and send them to the provider yourself – this will be treated as a new subscription rather than a transfer of existing ISA monies.
Keep Your Past ISA Funds Working Hard For You
You can request the transfer of ISA monies from one provider to another at any time and it’s probably simpler than you think. You might find that returns for your existing ISA(s) aren’t what they used to be – reports estimate foregone earnings to date to be in the region of £100bn. Better returns can often be available by ‘shopping around’, so it could be well worth doing some research into what ISA rates are currently being offered.
Just contact the receiving ISA Manager, complete their transfer in form and the providers will do the rest. If the ISA funds are not already held as cash by the transferring provider, existing investments will need to be sold to free-up sufficient funds for the transfer payment to the new provider.
If you’re transferring existing ISAs to Proplend just login to your Lender Dashboard and complete the relevant transfer in form (depending on what type of ISA it’s coming from). We will require a ‘wet’ signature form so it will need to be sent in the post to us. We’ll action the form on the day of receipt but it is then down to the transferring ISA Manager to send us the funds and this can take a week or two. For more on ISA transfers, take a look at the Proplend IFISA Guide.
Unfortunately, you can’t transfer non-ISA peer to peer loan holdings into an IFISA. However, as things stand, personal savings allowances available in the UK mean savers aren’t taxed on their income until they reach certain thresholds so there’s a good chance you’re receiving these P2P returns tax free anyway.
Progress Towards Proplend IFISA Launch
- Full FCA authorisation (‘approval’) granted by the Financial Conduct Authority (FCA)
- Confirmation of ISA Manager status from HM Revenue and Customs (HMRC)
- Proplend’s IFISA Terms & Conditions and IFISA Guide published
- Proplend’s IFISA initially launched to existing platform lenders as at 30 May 2017.
- IFISA FULLY LAUNCHED – Our Innovative Finance ISA is freely available to new and existing customers as of 1 August 2017.