ikorodu
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Post by ikorodu on Mar 10, 2015 9:11:48 GMT
An announcement of the ISA treatment of p2p lending is expected soon, I understand.
I would think that this will lead to a significant increase in the number of lenders and hence money being placed on the market.
How do people feel about this? I expect that rates will drop.
I assume that ratesetter have plans in place for an expected increase in business.
So will ISA have a net positive effect for lenders?
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bigfoot12
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Post by bigfoot12 on Mar 10, 2015 13:00:37 GMT
I think it will be a while yet. And perhaps not every platform will be able to implement it straight away. My guess is it will probably be worse for non tax payers (no tax to save) and very large investors (ISA too small) but better for tax payers (individual tax benefit makes up for lower interest rate).
Only once the rules are clear will we have a better idea. I currently have some share ISAs and non ISA P2P. I would like to switch those over. I don't get the 10% tax credit on the shares in the ISA, nor do I get to offset my losses against income on defaulting P2P loans.
My overall exposure to P2P will not increase. Even without an ISA wrapper P2P is better than cash ISA. Ratesetter 5 year is currently 6.3% or 3.46% 3.78%, and 5.04% after tax of 45%, 40% and 20% respectively, whereas the best fixed rate cash ISA I could see (looking at moneysupermarket) was 1.45%. If people haven't jumped already will an ISA be enough, or will it take Hargreaves Lansdown, (or Tesco, Virgin Money) or some other institution to attract large numbers of new investors.
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Post by cautious on Mar 10, 2015 16:27:38 GMT
Personally, I don't have any extra funds to add; let alone 15k laying idle.
I'm hoping that new funds are not required and we can switch existing P2P funds into an Isa wrapper; failing that it's a transfer across of an existing cash Isa.
I was hoping that the P2P Isa would appear in 2015-16 tax year too.
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Post by GSV3MIaC on Mar 10, 2015 17:30:40 GMT
Some people expected it to appear in tax year 2014-2015 ... even 2015-2016 may turn out to be ambitious, given the election due shortly. We shall have to wait and see, but I certainly won't be delaying any ISA investment on the off chance a P2P one will be available.... I am sure 'move existing' will be possible one way or another.
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Post by bobthebuilder on Mar 10, 2015 18:51:23 GMT
My phone conversations and e-mail correspondence with Customer Services at RS point to 2016/17 being the most likely start date for P2P ISAs, and they confirmed that they expect to allow transfers in from existing ISAs. However, please don't treat this as an official announcement!
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teddy
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Post by teddy on Mar 18, 2015 14:32:59 GMT
There doesn't seem to have been anything in the Budget today regarding ISAs and P2P, so it all seems to have been shoved on the back burner.
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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 Mar 18, 2015 15:31:13 GMT
There doesn't seem to have been anything in the Budget today regarding ISA and P2P, so it all seems to have been shoved on the back burner. There was a reference in passing to adding a wider range of assets in Ocober but then he went on about the new HTB ISA. I took this as distinct from the former but need to check detail of speech to be sure
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Post by dolphin on Mar 18, 2015 16:04:42 GMT
Extract from the Budget Red Book
1.226 Following technical consultation with the financial services industry, the government will extend the range of ISA eligible investments in 2015-16 to include listed bonds issued by a co-operative society and community benefit society and SME securities issued by companies trading on a recognised stock exchange. The government will also explore further extending the list to include debt and equity securities offered via crowd funding platforms, and will consult in summer 2015 alongside a response to the consultation on how to include peer-to-peer loans.
So no change. Still consulting and waiting on our votes
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teddy
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Post by teddy on Mar 18, 2015 17:03:07 GMT
Extract from the Budget Red Book 1.226 Following technical consultation with the financial services industry, the government will extend the range of ISA eligible investments in 2015-16 to include listed bonds issued by a co-operative society and community benefit society and SME securities issued by companies trading on a recognised stock exchange. The government will also explore further extending the list to include debt and equity securities offered via crowd funding platforms, and will consult in summer 2015 alongside a response to the consultation on how to include peer-to-peer loans.So no change. Still consulting and waiting on our votes Kicked in to the long grass, and it'll stay there if the socialists win the election. Hell will freeze over before <snip> do anything to help savers. Wallace & Gomit Manifesto: Savers = people with money = bad Poor people with no money = good
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Post by bobthebuilder on Mar 19, 2015 1:58:04 GMT
At least one commentator seems to have interpreted the wording of the Budget Red Book to mean that P2P loans will have to be held within a Stocks and Shares ISA. www.moneywise.co.uk/news/2015-03-18/budget-2015-flexible-isas-announcedReferring to the new ‘flexible’ ISAs (allowing people to take money out of an ISA, and put it back in later in the year without losing any of their tax-free entitlement) she says: “Osborne said the rules will come into effect from this autumn, at which point the range of investments eligible for inclusion within a stock and shares Isa will be expanded. This is likely to include peer-to-peer (P2P) lending, which the government has been consulting on since September 2014. The P2P industry had been hoping for a separate P2P Isa.” I do hope this interpretation is incorrect. We have already seen the extortionate charges levied by S&S ISA Manager European Pensions Management Ltd in relation to Wellesley’s so-called “ISA Bond” (including £100 + VAT for transferring out to another ISA provider, which I understand applies even to bond maturity proceeds), and it’s not a good omen for the future if only S&S ISA Managers are allowed to operate in this potential growth area. Personally I don’t think P2P lending on a platform like Ratesetter has anything in common with equity investment, and I would be very disappointed if RS were denied the opportunity to manage their own P2P ISA. I imagine the banks would be delighted though.
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pikestaff
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Post by pikestaff on Mar 19, 2015 8:39:31 GMT
At least one commentator seems to have interpreted the wording of the Budget Red Book to mean that P2P loans will have to be held within a Stocks and Shares ISA. www.moneywise.co.uk/news/2015-03-18/budget-2015-flexible-isas-announcedReferring to the new ‘flexible’ ISAs (allowing people to take money out of an ISA, and put it back in later in the year without losing any of their tax-free entitlement) she says: “Osborne said the rules will come into effect from this autumn, at which point the range of investments eligible for inclusion within a stock and shares Isa will be expanded. This is likely to include peer-to-peer (P2P) lending, which the government has been consulting on since September 2014. The P2P industry had been hoping for a separate P2P Isa.” I do hope this interpretation is incorrect. We have already seen the extortionate charges levied by S&S ISA Manager European Pensions Management Ltd in relation to Wellesley’s so-called “ISA Bond” (including £100 + VAT for transferring out to another ISA provider, which I understand applies even to bond maturity proceeds), and it’s not a good omen for the future if only S&S ISA Managers are allowed to operate in this potential growth area. Personally I don’t think P2P lending on a platform like Ratesetter has anything in common with equity investment, and I would be very disappointed if RS were denied the opportunity to manage their own P2P ISA. I imagine the banks would be delighted though. I too would be (very) disappointed, but I don't know what this interpretation is based on. It's reading rather too much into the "red book" IMO. We shall have to wait and see what the consultation response actually says. In the event that the government does go down the S&S ISA route, I'd expect more competitive products than Wellesley's "ISA Bond" to emerge, but it is hard to see the all-in cost ever being less than (say) 1.5%, split between the p2p platform and the ISA provider. That will make the exercise pretty pointless for basic rate taxpayers, although still worthwhile if you pay higher rate.
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Post by robinshould on Mar 19, 2015 23:38:13 GMT
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Post by westonkevRS on Mar 20, 2015 6:35:57 GMT
My understanding is that right now there is no definitive answer. We have had some informal communication that it is considered within the £1,000 savings tax free, but until this is confirmed officially by HMT to everyone externally I wouldn't take it as definitive.
Discussion are in progress, again I'll post again when these are finished and communicated officially...
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Liz
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p2p ISA
Mar 21, 2015 13:27:50 GMT
via mobile
Post by Liz on Mar 21, 2015 13:27:50 GMT
There is also the savings allowance of £5000(replacing 10% rate) from next tax year for those low earners (under £10'500) for savings income. So as I don't work, I can earn £15,500, possibly £15,800 now, in p2p income before I pay tax. I possibly will be just over £10,800 next year. Is p2p income officially savings income? m.ft.com/cms/s/0/2c9184ee-ce29-11e4-9712-00144feab7de.html
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oldgrumpy
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Post by oldgrumpy on Mar 21, 2015 14:51:11 GMT
Mr "magnanimous" Osborne and Mr Poshncondescending Cameron are very pleased with themselves for formulating such a headline grabbing "£1000 giveaway*" (just before an election) when their policies have forced interest rates so low for so long that hardly anyone, particularly those on long-term moderate pay, will be getting more than a few £ in interest, so HMRC wouldn't be getting much tax anyway (but they are deferring the concession for a year just in case!).
What is the betting that if (when) interest rates return to the more normal 3% to 5% (ish) at some date in the future, and government decides that they could get a significant amount again, the politicians will give us all the reasons why we should be paying a fair amount of tax on our savings, and ditch the concession? When that time comes, if not I'm not alive, please make a very loud noise to repeat the statement I heard from Mr Osborne backing the new policy, "People have already paid tax on their money. Why should they pay tax again when they save it?" Politicians (b*stards ....) have been telling us for years that we don't save enough for our old age when what they mean is "you don't save enough so that we can re-tax on the interest and we want more". My answer to Osborne/Cameron is , "so why have you been taxing everybody 20% on their savings interest for so long then if that's your opinion; you'd better give it back then, (and don't blame the other party!), and why not change it immediately, or from 6.4.15?
* Yes... £1000 .... that is the figure in all the newspapers and on all the TV news programmes. Why isn't the figure of £200 the one trumpetted, i.e the actual advantage if you are one of the very few people who receive a grand in interest in a year from the banks and building socities and NS & I?
I need another banana.
Rant over.
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