Peer-to-peer lending to qualify for ISA's
An &ldquo;Innovative Finance ISA&rdquo; is due to be launched next year, allowing P2P lending to be sheltered from tax for the first time. According to ethical investment platform, Adundance, other crowdfunded products will also qualify for tax free status. Subject to completion of the formal consultation process the new products should be available from Apr-16.
An ‘Innovative Finance ISA’ is to be launched next year and will, for the first time, allow peer-to-peer lending to be sheltered from tax.

It will also allow other crowdfunded products to become tax free, according to Abundance, an ethical investment platform whose debt-crowdfunding approach uses debentures.

This means that subject to completion of the formal consultation process, from April 2016, Abundance’s customers will enjoy the returns from their investments free of tax, just as customers using P2P lenders will, provided these are placed within the new ‘Innovative Finance ISA’.

Bruce Davis, cofounder and joint MD of Abundance said: “This is exciting and important news for UK investors who will soon be able to get even better returns, via ISA tax relief, from a wide range of innovative new investments that will easily beat Cash ISA returns but avoid the bigger risks of investing in a stocks and shares ISAs.

“This new middle ground solution will help to encourage more money to be invested in productive assets rather than cash deposits that contribute virtually nothing to either savers’ personal finances or the productivity of the real UK economy.”

The Budget is also good news for wind investors who have variable rate debentures – the new £5,000 tax allowance (replacing the dividend tax credit) will boost the returns of investors from April 2016.

Davis continued: “It is tempting to pitch the headline ‘Osborne boosts investment returns from onshore wind turbines’ as it is true, even if perhaps not the reason he made this change. But whatever the headline, the good news is that this change will make investment in these important projects even more attractive.”