Investors may be able to transfer unlimited funds from pre-existing ISAs into IFISAs, and hold multiple IFISAs with different peer-to-peer platforms to accommodate these 'old' ISA monies, according to Lending Works.
Although previous announcements have indicated that investors will only be able to contribute to one IFISA, with one peer-to-peer platform for each financial year, Lending Works says an ambiguity within the ISA regulations may potentially create a wider benefit for many current and prospective investors.
It believes such limitations do not appear to be applicable to ISA funds accumulated within cash and/or stocks & shares ISAs over previous financial years, which can be classified as ‘old’ ISA money by the time IFISA goes live.
This would mean that there is no upper limit to the amount that an individual lender through peer-to-peer will be able to transfer from these savings and/or investments into their new IFISA.
Although the relevant legislation on IFISAs is still in a draft phase, there does not appear to be anything in the current ISA rules placing transfer limitations on assets accumulated over previous financial years within the two existing ISA categories.
Lending Works says it does not anticipate any radical changes will take place to that effect, which in addition would allow the investor to set up an unlimited number of IFISAs in relation to previous ISA funds, with as many different platforms as they choose, and continue to benefit from ISA status on these funds.
Nick Harding, founding CEO of Lending Works, said:
“It is hugely positive for consumer lenders that investment within the framework may not be limited to their newly contributed IFISA funds. Whilst the rules underpinning this could change before 6th April, there is nevertheless little doubt that this will be extremely rewarding for our consumer lenders.
“The opportunity for lenders to earn tax-free returns on more than just their annual ISA allowance within an IFISA is a big boost for the product, platforms like ours, and, crucially, the customer. Even more importantly, investors are set to be able to hold multiple IFISAs with different peer-to-peer lending platforms to accommodate these ‘old’ ISA monies, and this is a vital tool in their ability to diversify their P2P investments."