Learn more about the IFISA

What is an Individual Savings Account?

An ISA is an Individual Savings Account and is not a product in its own right. An ISA is a 'wrapper' in which you can shelter savings and investments from tax.

There are multiple types of ISA available; the cash ISA, stocks and shares ISA, Help To Buy ISA, the Lifetime ISA and the Innovative Finance ISA (IFISA).

You can put money into an ISA up to a set limit each tax year. This limit is known as your 'ISA allowance'. Any returns or gains made from money placed in an ISA are not subject to income and capital gains tax. You don't even need to declare ISAs on your tax return.

What is my annual ISA allowance?

The annual ISA allowance may vary each tax year.

The ISA allowance for the 2018/19 tax year is £20,000.

You may consult the government website for the current ISA allowance. (https://www.gov.uk/individual-savings-accounts/overview).

What is an Innovative Finance ISA?

The IFISA allows individuals to use part, or all, of their annual ISA allowance to lend funds through Peer-to-Peer lending platforms. Peer-to-peer' lending allows individuals to lend directly to borrowers via an online platform. You are only permitted to have one of each type of ISA per tax year (i.e. one Innovative Finance ISA, one stocks and shares and one cash). Please see 'How many ISAs can I have in one year' for more information.

What is the difference between a cash ISA, a stocks and shares ISA and an Innovative Finance ISA?

Interest paid on a cash ISA is tax free and is suitable for short term savings - less than 5 years. Interest is received on the savings at a fixed or variable rate.

A stocks and shares ISA is a tax-efficient way to invest in shares and securities for five years or more, and when you want to share in the potential growth in stock markets.

The Innovative Finance ISA enables savers, using direct peer to peer lending platforms, to receive tax-free interest over a range of time spans. Direct lending is when individuals lend to borrowers, usually through an online platform. Loan terms and lengths may vary depending the specific provider.

When is the tax year?

The tax year runs from 6 April to 5 April.

How many ISAs can I have in one year?

You can have one of each type of ISA per tax year, so long as the total amount invested into them is within the limit of the annual ISA allowance, - which currently stands at £20,000 (see point 2).

For example, you can subscribe to one cash ISA, one stocks and shares ISA and one Innovative Finance ISA in each tax year.

In the next tax-year you can subscribe to an additional ISA of each type again.

Can an IFISA be held with more than one provider?

Yes, but it is more complex due to the 'one of each type' rule. Every tax year you can open an IFISA with a new provider so there are multiple IFISAs with multiple providers (however you cannot open more than one in one tax year).

How do I open an account?

Who can open an IFISA?

To open an IFISA you must be 18 or over. You must be a resident in the UK, a Crown servant (e.g. diplomatic or overseas civil service) or their spouse or civil partner if you do not live in the UK. You cannot hold an IF ISA with or on behalf of someone else. You must also have a UK Bank account.

What is a CrowdProperty Standard Loan Account?

The CrowdProperty Standard Loan Account is the standard CrowdProperty product which you sign up for upon registering to become a lender. You are not obliged to pledge from this account, and it is completely free to open.

If you pledge via your CrowdProperty standard loan account, you may have to pay tax on interest repaid throughout the tax year.

To sign up for the CrowdProperty Innovative Finance ISA, you must first register for the CrowdProperty Standard Loan account, and then create an ISA account. Then, you can choose from which account you pledge.

How can I set up my CrowdProperty Innovative Finance ISA (IFISA)?

You may set up a CrowdProperty IFISA by registering for a CrowdProperty account here: https://www.crowdproperty.com/account/ifisa/register. This is completely free of charge and open to all existing and new lenders. Existing CrowdProperty account holders should log into their Standard Loan Account, check they have provided all necessary details correctly and then choose the 'ISA' option from the 'My Account' menu.

How do I deposit funds into my CrowdProperty IFISA?

Once you have successfully registered as a lender and opened an IFISA account (please see 'How can I set up my CrowdProperty IFISA?'), you will receive a sort code and account number to deposit funds into your CrowdProperty IFISA. These funds will remain in your account, and you will be able to see exactly how much money is deposited in your ISA.

Alternatively, you can transfer pre-existing ISA monies (please refer to 'Can I transfer money in from another ISA provider?)'

When do I start earning interest?

Money deposited in to your CrowdProperty IFISA account will not earn any interest. It will only earn interest when you use it directly to invest in one or more of your preferred projects on our platform (please see 'How do I utilise my ISA money').

Can I transfer existing investments from my CrowdProperty Investment account into my IFISA account?

No, you cannot transfer existing loans that you have made to projects from your CrowdProperty Standard Loan Account into your ISA.

You may only transfer cash from your Standard Loan Account into your IFISA account.

If I do not pledge towards a project via my CrowdProperty IFISA during the tax year, does it affect my ISA allowance?

If you make a cash payment in to your ISA account, the amount subscribed will use part of your ISA allowance, even if you do not use this subscription to make an investment in a specific project.

If you do not use up your ISA allowance, it will not be carried over to the next year.

How do I utilise my ISA money?

Once a project has been made live on the CrowdProperty platform, registered lenders can view the opportunity and make a pledge towards the project from their CrowdProperty ISA account.

The amount you pledge will then be transferred to the project account at the point of the completion of legal formalities. Once the loan is completed your money will begin to earn interest. You will be paid back your loan + interest at the end of the loan term (as with all investments, your capital is at risk. Please see our risk statement).

Is there a minimum subscription amount?

Yes, the minimum initial subscription amount is £500.00.

ISA Transfers?

Can I transfer money in from another ISA provider?

Yes. You will be able to complete our online Transfer in Form to transfer existing ISAs into a CrowdProperty IFISA, click here to start your transfer. Please note, you will need to notify your existing ISA manager.

Can I transfer money out to another ISA provider?

Yes, you will be able to transfer funds from your CrowdProperty IFISA to another account. A fee will be chargeable

When can I transfer my ISA from another provider to you?

You can transfer your ISA at any time, you do not have to wait until the end of the tax year.

How much of my current year ISA subscription can I transfer?

You can transfer your current years' ISA subscription to a CrowdProperty ISA. You must transfer your current years' ISA subscription that you have utilised in full.

How much of previous years' ISA subscriptions can I transfer?

Investors can transfer all or part of previous years' ISA investments to the CrowdProperty ISA.

What happens if I go over my annual ISA allowance?

It is your individual responsibility as a lender to ensure you track how much of your annual ISA subscription you have utilised, and how many ISAs you have opened per tax year.

If you realise you have overpaid, report it to HM Revenue & Customs. You can do this by calling the ISA helpline on 0300 200 3300. If you do not spot the error, HMRC will see it and make contact with you.

HMRC will identify the payment that breached the limit. It will then start the process of what it calls "repairing" the ISA.

All investments in the ISA that were made after the limit was breached will no longer be eligible for tax exemption. They will be handed back to the investor.

An administrative fee will be chargeable if you use more than your annual ISA allowance.

Do I have a cancellation period?

If you decide you no longer want a CrowdProperty IFISA, you will have the right to cancel your account within 7 calendar days of the date your account is opened. If you cancel within this period, you will remain eligible to open an IFISA with us or with another ISA manager. You will also not have used up any of your current year subscription. This will not apply if you cancel your CrowdProperty IFISA after this period.

What if I have made subscriptions or investments during the 7-day cancellation period?

If you have pledged towards a project and the funds are actively employed in a loan, you will not be able to withdraw these funds until the loan term has ended

If you pledge towards a project but your funds have not yet been utilised in the project, please notify us that you wish to cancel your account by emailing info@crowdproperty.com