HMG consultation document on ISAs and P2P loans

goldservice

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HMG consultation document on ISAs and P2P loans Oct 28, 2014 20:02:55 GMT

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Post by goldservice on Oct 28, 2014 20:02:55 GMT

The government consultation document was published today and can be read at:
www.gov.uk/government/consultations/isa-qualifying-investments-consultation-on-including-peer-to-peer-loans/isa-qualifying-investments-consultation-on-including-peer-to-peer-loans

There are proposals in this document for how transfers out from P2P might be made. But I can't find any reference to how we would transfer in the cash from an existing non-P2P ISA - has anyone else found any reference to this? If I have a cash ISA and wish to transfer it into a P2P ISA, the funds would arrive at the P2P platform (who I assume would have chosen to be an ISA manager) but it's not clear how the lender then replaces that cash with loans inside the ISA wrapper.

This is of particular interest to any of us who will want to choose our existing high rate loans to go into the wrapper.

Last Edit: Oct 28, 2014 20:03:29 GMT by goldservice

pikestaff
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HMG consultation document on ISAs and P2P loans Oct 28, 2014 20:28:56 GMT goldservice likes this

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Post by pikestaff on Oct 28, 2014 20:28:56 GMT

goldservice That would be the consultation document published 11 days ago, see this thread: p2pindependentforum.com/thread/1498/p2p-isaa.

You are right that the con doc does not address how transfers in would work. Investing in new loans using the cash within the p2p ISA wrapper should be straightforward enough. However, it is not clear what the rules would be for transferring existing investments into the p2p ISA. There is some discussion of this in the referenced thread.

Last Edit: Oct 28, 2014 20:29:38 GMT by pikestaff

blender
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HMG consultation document on ISAs and P2P loans Oct 28, 2014 22:21:40 GMT

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Post by blender on Oct 28, 2014 22:21:40 GMT

I could see FC becoming an ISA provider just for specified funds lent through FC loans only, and I could see myself being happy to use it. Wishing to transfer existing loan parts into it might be asking a bit much. I would expect these to be separate new accounts and we would have to sell from the old account and purchase inside the wrapper. As long as we can buy and sell within the wrapper ourselves that should be OK - assuming the only extra charges would be the 0.25% on selling the old parts. A management fee would not be appreciated.
There could be quite a liquidity problem on the SM just before the new ISAs start.

Last Edit: Oct 28, 2014 22:29:38 GMT by blender

goldservice

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HMG consultation document on ISAs and P2P loans Oct 29, 2014 8:14:26 GMT

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Post by goldservice on Oct 29, 2014 8:14:26 GMT

Oct 28, 2014 22:21:40 GMT blender said:

I could see FC becoming an ISA provider just for specified funds lent through FC loans only, and I could see myself being happy to use it. Wishing to transfer existing loan parts into it might be asking a bit much. I would expect these to be separate new accounts and we would have to sell from the old account and purchase inside the wrapper. As long as we can buy and sell within the wrapper ourselves that should be OK - assuming the only extra charges would be the 0.25% on selling the old parts. A management fee would not be appreciated.
There could be quite a liquidity problem on the SM just before the new ISAs start.

"we would have to sell from the old account and purchase inside the wrapper" - it would be a bit lame if FC expected us to do this without FC themselves providing a transfer mechanism. Otherwise, it will be back to selling parts at >= 2.7% premium (to deter buy bots who are buying to flip) and crossing fingers and creeping about in the early hours (in the hope that there is no active buy bot who is buying to keep.) If no transfer mechanism is provided, then buy botters may already be sharpening their code for the transfer fest, unless I've missed something?

blender
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HMG consultation document on ISAs and P2P loans Oct 29, 2014 8:57:10 GMT

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Post by blender on Oct 29, 2014 8:57:10 GMT

You have not missed anything Goldservice. I hope to be wrong but cannot see in the proposals a transfer mechanism for existing FC portfolios from outside an ISA wrapper into a new wrapper, without liquidation. How else can it be valued? I think you have to put your cash in the wrapper, up to your limit, and then buy things at 'market value'. Someone better versed in the rules and the detail of those proposals may help us with a solution.
Personally I do not have any ISAs, because I can do better with P2P after tax than with ISA products. So am not an expert.