badersleg
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Post by badersleg on Feb 2, 2015 12:28:16 GMT
Hello.
Does anyone know if the P2P ISA will allow transfers in from cash or shares ISA's? I have some money in old cash ISAs. I'd like to cash them in and put it in P2P now, but would feel a bit of a duffer if it was announced that I could have transferred it over in April and kept the tax free status on it.
I should think transfers won't be allowed, but has anything been announced yet?
Regards,
Tim
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Feb 2, 2015 12:54:27 GMT
Hello. Does anyone know if the P2P ISA will allow transfers in from cash or shares ISA's? I have some money in old cash ISAs. I'd like to cash them in and put it in P2P now, but would feel a bit of a duffer if it was announced that I could have transferred it over in April and kept the tax free status on it. I should think transfers won't be allowed, but has anything been announced yet? Regards, Tim My understanding is that P2P ISA's have been delayed until after the election. They will still happen because both main parties support the idea. I would imagine that existing ISA's would be transferable into P2P ISA's in much the same way as transfers between Cash ISA's and Investment ISA's are now allowed.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 2, 2015 13:03:33 GMT
Hello. Does anyone know if the P2P ISA will allow transfers in from cash or shares ISA's? I have some money in old cash ISAs. I'd like to cash them in and put it in P2P now, but would feel a bit of a duffer if it was announced that I could have transferred it over in April and kept the tax free status on it. I should think transfers won't be allowed, but has anything been announced yet? Regards, Tim As far as I was aware it's still all out in consultation. Thereafter, each provider is likely to have their own transfer rules - not all cash ISAs currently allow transfer in at the moment, even though it is allowed for in 'the rules'. I've consolidated a couple of cash ISAs paying derisory interest into the best that I could find that I'm now holding on to for the moment in case I'll be able to transfer - they've been hanging around for a few years so I might as well wait the extra year I expect it to take.
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webwiz
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Post by webwiz on Feb 2, 2015 15:14:08 GMT
I will be surprised (pleasantly so) if p2p's are allowed into ISAs. The differences between the platforms are huge. The terms p2p, crowdfunding and alternative finance are loosely defined. A report by the University of Cambridge classified them into 9 different categories, but there are others round the fringes and new platforms almost every day.
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bigfoot12
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Post by bigfoot12 on Feb 2, 2015 15:32:35 GMT
Has there been a problem in consultation process that you are aware of webwiz, or do you expect the election to get in the way? Process seems to be going to expected time-scale so far. www.bbc.co.uk/news/business-29653476 |
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c88dnf
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Post by c88dnf on Feb 2, 2015 15:35:15 GMT
Hello. Does anyone know if the P2P ISA will allow transfers in from cash or shares ISA's? I have some money in old cash ISAs. I'd like to cash them in and put it in P2P now, but would feel a bit of a duffer if it was announced that I could have transferred it over in April and kept the tax free status on it. I should think transfers won't be allowed, but has anything been announced yet? Regards, Tim Tim - nothing has been announced as the whole topic is now under discussion by the Treasury, consultation having ended on December 12th. It's highly unlikely any P2P ISA structure will be in place before late 2015, though I suppose it's possible that the March budget may provide some pointers as to what the current government may do if re-elected. The latest article in the press on the subject was in late November and can be referenced here: www.ft.com/cms/s/0/28be0c30-70e5-11e4-85d5-00144feabdc0.html#axzz3QbOU4XqQ
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baldpate
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Post by baldpate on Feb 2, 2015 18:47:25 GMT
From the general tenor of the consultation paper, I think it almost certain that the Government will seek to extend to P2P ISAs the current principal of interchangeability between cash & stocks+shares ISAs. In practice this will mean a P2P ISA provide will be obliged to provide for transfers-out, to other providers. However, as at present , it will be up to individual ISA providers to decide whether they will accept transfer-in ; some may choose not to do so, and may only accept 'new' ISA money. I would be surprised if many took this approach, given the enticing prospect of a whole new funding source.
One issue I foresee is the fact that transfering existing money between ISA providers is a fairly clunky process: it can be expensive, and can take weeks. So you won't easily be able to fund your (within ISA wrapper) lending 'on-the-fly', so to speak, as is possible at present on most (?all) platforms. You'll probably have to do your transfers in quite large chunks. I think this will disadvantage those platforms where you invest in individual loans (e.g. Funding Circle, Funding Secure, Saving Stream etc), because you will have a funds sitting uninvested for some time on such platforms. Platforms like Ratesetter & Wellesley, and others which offer mass, anonymous investment, will be relatively advantaged.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Feb 2, 2015 21:50:03 GMT
One issue I foresee is the fact that transfering existing money between ISA providers is a fairly clunky process: it can be expensive, and can take weeks. So you won't easily be able to fund your (within ISA wrapper) lending 'on-the-fly', so to speak, as is possible at present on most (?all) platforms. You'll probably have to do your transfers in quite large chunks. I think this will disadvantage those platforms where you invest in individual loans (e.g. Funding Circle, Funding Secure, Saving Stream etc), because you will have a funds sitting uninvested for some time on such platforms. Platforms like Ratesetter & Wellesley, and others which offer mass, anonymous investment, will be relatively advantaged. The consultation has proposed that a P2P platform must have a secondary market that allows loans to be sold at "market value". That may be a problem for the likes of Funding Secure and Wellesley + some others.
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webwiz
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Post by webwiz on Feb 2, 2015 22:34:17 GMT
Has there been a problem in consultation process that you are aware of webwiz, or do you expect the election to get in the way? Process seems to be going to expected time-scale so far. www.bbc.co.uk/news/business-29653476I am assuming that legislation will be required. This will mean defining p2p. I suppose it will be difficult to find a definition which covers all the different platforms. I notice that this forum has decided to create a separate category of platforms which they regard as equities. If this is the case why can't those be included in an ISA already. I hope I'm wrong but I just can't see the bureaucrats agreeing to p2p's in ISAs.
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bigfoot12
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Post by bigfoot12 on Feb 3, 2015 8:38:15 GMT
Has there been a problem in consultation process that you are aware of webwiz, or do you expect the election to get in the way? Process seems to be going to expected time-scale so far. www.bbc.co.uk/news/business-29653476I am assuming that legislation will be required. This will mean defining p2p. I suppose it will be difficult to find a definition which covers all the different platforms. I notice that this forum has decided to create a separate category of platforms which they regard as equities. If this is the case why can't those be included in an ISA already. I hope I'm wrong but I just can't see the bureaucrats agreeing to p2p's in ISAs. I think that there is some rule for an ISA about equities being listed on an EU exchange, or something similar. I think the bureaucrats see it as promoting SME finance. I really think that they want the FC, TC, AC type businesses to expand. It could be that the election gets in the way, and the next coalition has bigger problems to worry about.
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pikestaff
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Post by pikestaff on Feb 3, 2015 9:16:09 GMT
...Does anyone know if the P2P ISA will allow transfers in from cash or shares ISA's? I have some money in old cash ISAs. I'd like to cash them in and put it in P2P now, but would feel a bit of a duffer if it was announced that I could have transferred it over in April and kept the tax free status on it... One would hope so, but it was not covered in the consultation document. Anyway, p2p ISAs are not going to happen until after the election, and perhaps not until April 2016. As my cash ISAs mature I'm transferring them into stocks and shares ISAs with a view to switching to p2p when it becomes possible. If that's too risky for you then it depends on your circumstances. The advice always used to be not to cash in ISAs, because once you do so you've permanently lost the allowance. However, with the annual allowance having gone up so much, this may be less of an issue than it was - if you trust future govts not to change the rules! My personal view is that there is a significant risk of a lifetime cap on ISAs being introduced at some point, so I continue to shovel in as much as I can afford while I still can. (I'm confident that any cap will not be retrospective.) ...The consultation has proposed that a P2P platform must have a secondary market that allows loans to be sold at "market value"... Not quite as concrete as a proposal on my reading, but certainly perceived by the authors to be desirable. There are actually two separate points here: - the desire for a SM to provide liquidity and facilitate transfers from one provider to another, and
- the desire for sales to be at "market value", which (although the paper does not say so) is there to protect HMRC from tax leakage.
IMO the biggest weakness of the condoc was the authors' lack of understanding of secondary markets, in particular: - there is no guarantee of liquidity, even for "good" loans, and this cannot be fixed by making the platform the buyer of last resort because they do not have the capital;
- on most markets it is not possible to sell defaulted loans;
- even on those markets which permit sales at a premium or discount it would be difficult to argue that all sales are truly at a market value. The markets are too imperfect for that.
I believe there are ways to work around these limitations, and included some suggestions in my response. However, if the next govt decides not to go ahead with p2p ISAs it will most likely be because they could not find a solution to the SM issues that all parties (platforms, FCA and HMRC) could live with. ...I think the bureaucrats see it as promoting SME finance. I really think that they want the FC, TC, AC type businesses to expand. It could be that the election gets in the way, and the next coalition has bigger problems to worry about. More the politicians than the bureaucrats, I suspect. My worry is that issues around transferability could give the bureaucrats at the FCA and HMRC the excuse that they need to shelve it.
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webwiz
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Post by webwiz on Feb 3, 2015 16:37:51 GMT
If you are sure that p2ps will be available as ISAs, or even if you want to make a low cost punt that they will, one option would be to put current years' allowances plus any maturing equities ISAs, into an equity ISA but held as cash. No interest will be paid but that is of less concern in the current environment. When and if p2p Isas accepting transfers in arrive you will be all set. I'm not doing this myself though.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Feb 3, 2015 23:19:13 GMT
...The consultation has proposed that a P2P platform must have a secondary market that allows loans to be sold at "market value"... Not quite as concrete as a proposal on my reading, but certainly perceived by the authors to be desirable. There are actually two separate points here: - the desire for a SM to provide liquidity and facilitate transfers from one provider to another, and
- the desire for sales to be at "market value", which (although the paper does not say so) is there to protect HMRC from tax leakage.
IMO the biggest weakness of the condoc was the authors' lack of understanding of secondary markets, in particular: - there is no guarantee of liquidity, even for "good" loans, and this cannot be fixed by making the platform the buyer of last resort because they do not have the capital;
- on most markets it is not possible to sell defaulted loans;
- even on those markets which permit sales at a premium or discount it would be difficult to argue that all sales are truly at a market value. The markets are too imperfect for that.
I believe there are ways to work around these limitations, and included some suggestions in my response. However, if the next govt decides not to go ahead with p2p ISAs it will most likely be because they could not find a solution to the SM issues that all parties (platforms, FCA and HMRC) could live with. Although, I agree with these concerns regarding the SM, it should be noted that P2P is already allowed for SIPP investment on some platforms. The same issues concerning leakage apply, and HMRC has Ok'd them in this instance.
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Post by ablrateandy on Feb 4, 2015 0:26:13 GMT
100% agree with pikestaff on secondary markets. The author was really not even slightly well versed. I wrote at great length in my response and offered to use my prior experience to elucidate further and face-to-face if it would help as background... but heard nothing back. I also had a conversation with one of their principal advisers who also didn't "get" my concerns on the issue. Felt like I was banging my head against a brick wall.... |
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pikestaff
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Post by pikestaff on Feb 4, 2015 14:44:27 GMT
Although, I agree with these concerns regarding the SM, it should be noted that P2P is already allowed for SIPP investment on some platforms. The same issues concerning leakage apply, and HMRC has Ok'd them in this instance. I've no personal experience of this, but my understanding is that HMRC requires an independent valuation of the loan parts being transferred to the SIPP. This won't be free. I vaguely recall a TC investor saying it cost them hundreds, but I can't find the reference now. If HMRC were to impose a similar requirement for transfers of loan parts into a p2p ISA, it would make transfers too expensive for smaller investors. If anyone is aware of cases where HMRC has not required a valuation for a transfer into a SIPP, or where the valuation has been done more cheaply, it would be interesting to know.
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