You are here: Home - Investing -

Govt consults on P2P lending through ISAs

0
Written by:
17/10/2014
The government is consulting on the best way to implement the inclusion of peer-to-peer loans within Individual Savings Accounts (ISAs).

The consultation examines whether P2P loans should be included in existing stocks and shares ISAs, or whether they would be best suited to a new, third type of ISA.

Currently, peer-to-peer websites, like Zopa and Ratesetter, accept money from savers which they then lend out to individuals or businesses, with £1.6bn loaned through this type of business to date.

Although Chancellor George Osborne announced in this year’s Budget that the loans would qualify to be included in ISAs, and therefore be tax free, they would not be currently protected by the Financial Services Compensation Scheme.

As part of the consultation, the government is proposing to make the provision of advice to investors on loans made via peer-to-peer platforms a regulated activity.

The consultation proposes that firms currently authorised to advise on investments will be eligible to elect to have authorisation to advise on peer-to-peer loans automatically conferred.

The consultation initially proposes peer-to-peer loans comply with existing ISA rules unless there are compelling arguments otherwise.

Commenting on the consultation, David Gauke, financial secretary to the Treasury, said: “P2P lending is an exciting, innovative new sector and it is right that investors who want to lend money via P2P platforms should be able to hold these loans in their ISA alongside more traditional investments.

“At the moment, the interest that lenders earn from lending money via P2P platforms is taxable, but once P2P loans can be held in ISAs then it will be possible to earn interest entirely tax free.

“Allowing P2P loans to be held in ISAs will provide greater choice to ISA investors, and will support the government’s aim to diversify the different sources of finance that are available to borrowers by encouraging the growth of the P2P lending sector.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Product launches of the week

Competition is heating up in the mortgage market, with a number of lenders cutting their rates.

Close