james
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Post by james on Feb 2, 2016 10:48:50 GMT
Giles Andrews OBE ceased being CEO of Zopa late last year. He became OBE in the 2016 honours. The following statement is wrong for cash ISAs and will be wrong for flexible ISAs from April if planned changes happen: " Also, be aware, once you withdraw from your ISA you lose the allowance and associated tax relief, E.G: £10k invested — £5k withdrawn — £5,240 max. can be invested to achieve £15,240 allowance". A self-transfer from a cash ISA can be used for cash ISAs only at present. It involves withdrawing the money, depositing it later in the year again and relying on HMRC's choice to forgive such acts at least once provided the amount going in during the year has not cumulatively exceeded the allowance. This is true but incomplete because the Help To Buy ISA is a form of cash ISA (so true it's not a new type, it's a new subtype): " There are two ISA types currently available" This is incorrect for many: " This is unlike a normal Savings Account, which is taxed 20%". It is taxed as interest income, at whatever rate applies, from nil within the personal allowance or April's onward's annual savings allowance to 45% for the top rate income tax band. This is true, but only because 15 is less than 30: " With Cash and Stocks & Shares ISAs, the ISA provider must facilitate the withdrawal of cash from your ISA within 30 days". The actual limit for a cash ISA is 15 days. It's right about S&S. This is semi-true: " if you take out an IFISA with a platform, Zopa for example, you will not be able to hold other P2P investments in the same account". An IFISA is operated by an ISA Manager. An ISA Manager can allow an unlimited number of accounts within its ISA. At least one planned ISA manager is planning an offering that will allow accounts at multiple P2P providers within the same ISA at the same time. I know that Altfi wrote this but I have yet to see any proposed law that implements the restriction to only being able to open a P2PISA directly with a P2P provider. |
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Post by Iain - Orca on Feb 2, 2016 13:58:14 GMT
Giles Andrews OBE ceased being CEO of Zopa late last year. He became OBE in the 2016 honours. The following statement is wrong for cash ISAs and will be wrong for flexible ISAs from April if planned changes happen: " Also, be aware, once you withdraw from your ISA you lose the allowance and associated tax relief, E.G: £10k invested — £5k withdrawn — £5,240 max. can be invested to achieve £15,240 allowance". A self-transfer from a cash ISA can be used for cash ISAs only at present. It involves withdrawing the money, depositing it later in the year again and relying on HMRC's choice to forgive such acts at least once provided the amount going in during the year has not cumulatively exceeded the allowance. This is true but incomplete because the Help To Buy ISA is a form of cash ISA (so true it's not a new type, it's a new subtype): " There are two ISA types currently available" This is incorrect for many: " This is unlike a normal Savings Account, which is taxed 20%". It is taxed as interest income, at whatever rate applies, from nil within the personal allowance or April's onward's annual savings allowance to 45% for the top rate income tax band. This is true, but only because 15 is less than 30: " With Cash and Stocks & Shares ISAs, the ISA provider must facilitate the withdrawal of cash from your ISA within 30 days". The actual limit for a cash ISA is 15 days. It's right about S&S. This is semi-true: " if you take out an IFISA with a platform, Zopa for example, you will not be able to hold other P2P investments in the same account". An IFISA is operated by an ISA Manager. An ISA Manager can allow an unlimited number of accounts within its ISA. At least one planned ISA manager is planning an offering that will allow accounts at multiple P2P providers within the same ISA at the same time. I know that Altfi wrote this but I have yet to see any proposed law that implements the restriction to only being able to open a P2PISA directly with a P2P provider. Ok, I appreciate your comments and corrections.
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ablender
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Post by ablender on Feb 2, 2016 16:12:45 GMT
Does anyone know if the same loans will be available for both ISA accounts and non-ISA accounts?
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james
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Post by james on Feb 2, 2016 16:48:32 GMT
Does anyone know if the same loans will be available for both ISA accounts and non-ISA accounts? Even if most loans on a platform are 36H qualifying it is possible that some will not be and the ones that aren't would presumably not be eligible. That could be based on the specifics of a particular loan deal or the way a particular platform does or did all of its loans. So don't expect say old SavingStream loans to be available on the secondary market inside an ISA even if new ones are. Though of course it would be for SavingStream and other platforms to say and implement whatever restrictions are required. Part of the ISA prep work would be ensuring that only the correct loans are presented to the various account types, just as SIPP supporting platforms today have to ensure that no loans that could result in owning tangible movable property are available for SIPP investors because tangible movable property is a prohibited item inside a SIPP. That means no security of cars, art, stamps, wine etc. for loans unless a trust structure or special purpose vehicle has been set up that would take ownership and realise the security instead of it passing into the ownership of the investors directly. It's a bit like the situation with some unit trusts and ETFs. Even though a fund supermarket might offer them all, any that did not have a credible chance of losing 5% were ineligible to be held in a S&S ISA until last April's rule change.
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mikes1531
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Post by mikes1531 on Feb 2, 2016 17:57:58 GMT
Does anyone know if you are going to be able to TRANSFER your current cash and S&S ISA's into a P2P ISA? I have money in S&S ISA earning a pittance and wondering whether to take it out and invest in P2P now, but lose the amount built up in my ISA for a transfer? I'll wait till April if I can simply transfer it as then I have a bigger pot in an ISA. I believe the same ISA rules will exist so as long as your assets in your S&S ISA are converted into cash you will be able to transfer into your P2P ISA. The difficulty exists when trying to transfer out of your P2P ISA as P2P products are relatively illiquid. Therefore again you will need to covert into cash (early access) and transfer. We wrote a blog post on the new regulations, some of the content is fairly generic but we do cover this point. Check it out and let me know what you think. AFAIK, it isn't quite as simple as indicated above. AIUI, the receiving ISA can choose whether or not to accept inward transfers. (Not on an individual basis, but as a matter of general policy.) If a P2P platform is actively seeking more lenders'/investors' funding, then they'd probably be willing to accept transfers. If the platform is worried that they might not be able to deploy all the funds they might receive if there was a tsunami of money coming their way, they might decide not to accept transfers. Considering the amount of money sitting in cash ISAs now, earning next to nothing, some people are expecting a massive inflow of funds to IFISAs. I therefore expect platforms to start out by not accepting transfers in until they see how much funding they receive via current-year ISA allowances. If they decide they could handle more money coming their way, they could allow transfers later. There may be another factor ISA investors need to consider, and that's the restriction, AIUI, of being able to open only one IFISA in a given year. Unless they open one with a provider willing to let them invest in multiple P2P platforms, all their IFISA money is going to be concentrated in just a single platform. If that were to include a lot of funds transferred from prior-year ISAs, it could mean a rather large investment in a single platform, and that might not be the most prudent thing to do from a diversification point of view.
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kermie
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Post by kermie on Feb 2, 2016 22:46:47 GMT
Slightly veering off: any idea if P2P losses incurred within an IFISA can be offset against income tax resulting from P2P outside an IFISA?
This kind of thing affects whether I put more risky or less risky P2P loans inside my ISA.
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james
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Post by james on Feb 2, 2016 23:13:29 GMT
Slightly veering off: any idea if P2P losses incurred within an IFISA can be offset against income tax resulting from P2P outside an IFISA? Normal ISA rule is not and no reason for IFISA to be any different.
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andy2001
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Post by andy2001 on Feb 2, 2016 23:41:41 GMT
Slightly veering off: any idea if P2P losses incurred within an IFISA can be offset against income tax resulting from P2P outside an IFISA? This kind of thing affects whether I put more risky or less risky P2P loans inside my ISA. Since profits from a P2p ISAs are not subject to tax, losses will not be eligible for tax relief.
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kermie
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Post by kermie on Feb 3, 2016 8:17:08 GMT
Thanks andy2001, james. Another daft question: will I be able to offset P2P losses (outside an ISA) against any income, or just P2P income? |
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james
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Post by james on Feb 3, 2016 9:09:32 GMT
Thanks andy2001 , james . Another daft question: will I be able to offset P2P losses (outside an ISA) against any income, or just P2P income? Draft rules say: 1. first each platform will calculate your net interest after deducting the eligible losses on that platform so you get the relief automatically in most cases. 2. any excess can be applied to other P2P platforms. 3. not other income, just P2P. 4. what to do if a platform doesn't do the calculations is still up in the air. The draft rules have the platforms deciding when a loss is eligible, without specifying what those should be in much detail, though insolvency of a business is identified as one case, even if there is security that is likely to result in full recovery. 5. 36H P2P only, not all P2P, at least at draft stage, may change. 6. If a platform has a protection fund it can be expected to take ownership of the loan and any recovered sums, the rules aren't explicit about this but do specify what happens if the loan is transferred, implying it, and of course that's what's done today anyway. The consultation on these things didn't end long ago and it's likely that there will be some changes, so don't count on anything that I wrote being accurate once the final rules come out.
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Post by wiseclerk on Feb 9, 2016 18:32:40 GMT
According to another sources an added hurdle is that even if companies have obtained full authorizasation they still need to apply to become an ISA manager. The application process for this is said to commence on April 6th.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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P2P ISA
Feb 9, 2016 19:11:33 GMT
via mobile
Post by ilmoro on Feb 9, 2016 19:11:33 GMT
Yes, the way I read it, none of my favourite P2P platforms (TC, AC, FC, SS, MT, etc) have any chance at all of being ready this year. Such a shame, AC's GBBA is just about working but without the ISA in place, I can't be recommending it to any of my "man in the street" friends and family. MT applied 8 months ago so they might. ISA manager app is supposed to take 2 weeks according to HMRC site
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Post by Deleted on Feb 13, 2016 18:12:22 GMT
While the official rules might be still under definition, two important P2P companies have written very clear statements in their latestnewsletters (dated 12/2/2016):
1) RateSetter:
"As you
may know, from 6 April 2016 the Innovative Finance ISA will be available
to investors. We're delighted to inform you that the RateSetter ISA
will be available at the usual great rates in our market. It’s only
fair, we don't believe that a tax free wrapper should result in lower
rates.
You
may also be pleased to hear that it will be possible to transfer funds
from existing cash or stocks and shares ISAs to a RateSetter ISA. Click
here for more details about the RateSetter IF ISA.
"
2) FundingCircle:
(just an extract):
Will the Funding Circle ISA operate any differently to my current Funding Circle account?
Lending through a Funding Circle ISA
will work in exactly the same way as existing lending through Funding
Circle, but it will be tax free. Investors will be able to lend directly
to businesses across the UK, either automatically or manually and earn an expected return of 7% after fees and
bad debts, whilst helping the British economy to grow. Your actual
return may be higher or lower as by lending to businesses, your capital
is at risk.
Will I be able to transfer my existing ISA investments over to the Funding Circle ISA?
Yes, you will be able to transfer any
existing investment from a cash or stock and shares ISA over to your
new Funding Circle ISA. Additionally, from April you will have a further
£15,240 allocation to invest in ISAs.
Will it be popular?
Recently we sent out a survey to
gauge potential interest in the upcoming Funding Circle ISA – around
2,500 investors replied, which is a fantastic response. Thank you to
everyone for contributing your thoughts. The results from the survey
have shown there is a lot of positive feeling towards opening a Funding
Circle ISA. 93% of respondents said they would be interested in opening a
Funding Circle ISA.
It looks to me like both RS and FC are pretty certain about a launch in April and the possibility of transfer ins from previous years ISAs...
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Feb 13, 2016 19:22:28 GMT
While the official rules might be still under definition, two important P2P companies have written very clear statements in their latestnewsletters (dated 12/2/2016):
It looks to me like both RS and FC are pretty certain about a launch in April and the possibility of transfer ins from previous years ISAs... Guess they must have either been told they have or will be fully authorised and will get accepted as an ISA Manager in time. I notice that the FSA Register is (supposedly) down for maintenance over next weekend so hopefully they are updating it to include lots of newly authorised P2P platforms  I dont think they are really saying anything beyond what is in the draft rules which are fairly uncontroversial (ie identical to existing). If they had mentioned 'bed & breakfasting' that would be far more interesting.
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pikestaff
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Post by pikestaff on Feb 14, 2016 8:39:53 GMT
It looks to me like both RS and FC are pretty certain about a launch in April and the possibility of transfer ins from previous years ISAs... Not perhaps as certain as all that, although RS seem more confident. next.ft.com/content/3c88e9bc-d19a-11e5-92a1-c5e23ef99c77If the link does not work, google for "Peer-to-peer platforms race to obtain authorisation before Isa season" and follow the link from Google.
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