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Innovative Finance ISA

What is meant by the condition: 'I apply to subscribe to an IFISA for the years 2018/19 and each subsequent year until further notice'?

This condition allows us to keep your ISA open for subsequent years until you wish to close it. This simply means that we don't have to ask permission each year to keep your ISA open. You are not required to make further deposits or investments unless you wish to, and your future ISA allowances are not affected.

I am finding the website difficult to use and/or information difficult to understand?

At Crowdstacker we want to ensure that you get the service that is right for you. We are at hand to help you understand any of the information on the website and we have many methods such as paper applications and printed brochures that may be easier and more suited to how you digest information.

Please feel free to contact us on 020 7118 7570.

Difference between P2P account and ISA?

The P2P account is our standard account. Investments held in your P2P account are eligible to be included in your Personal Saving Allowance, allowing you to earn up to £1,000 of interest tax free.

Our ISA is like the other categories of ISA in the respect that the funds and investments you hold within in your ISA will qualify for tax-free interest. You will be able to accumulate your interest tax-free within your ISA as you would be able to in a stocks & shares ISA and a cash ISA.

Any funds withdrawn will lose their ISA status.

How does the Secondary market work?

The secondary market is a match bargaining system. We publish your investment for sale on our market and we approach interested members who have requested that they are notified when investments are available for sale. 

Crowdstacker cannot guarantee if and how quickly an investment can be sold.

Please note: you will only be able to sell your entire investment and you currently can only set the investment to be sold at the investment amount or the full capital you invested. 

Does my partner get my ISA on my death?

If an ISA holder passes away, their investments and cash held in the ISA can be passed to the spouse and retain its tax-free status.

What happens to my investment if I die?

In the event a lender passes away, the borrower will pay the interest and the capital to Crowdstacker to hold on behalf of the lender, until such a time as the executor of the will of the deceased instructs us to release the funds.

Can I transfer out my ISA funds?

An investor can transfer all of the current year’s ISA subscriptions, or all or some of previous years’ ISA subscriptions. This means that you cannot transfer this years subscription unless your transfer the full amount (i.e. by selling your peer to peer investment(s)). You can however, transfer part of any previous years subscriptions that have been transferred to us.

What is a Flexible ISA?

Flexible ISAs allow you to, within the tax year, withdraw money and re-subscribe that money without impacting your ISA allowance. In order to keep the ISA a zero cost ISA, we do not allow this functionality.

When will my ISA balance be updated?

We will add your funds to your ISA balance within 1 business day of us receiving your funds. However, it can take up to 5 business days for the funds to appear from leaving your account.

What are the Timeframes for an ISA transfer?

The timeframes to transfer an ISA can vary dependent on your existing ISA provider and the type of ISA you wish to transfer. For a Cash ISA the timeframe should not be greater than 15 business days in total. For a Stocks & Shares ISA the timeframes can be longer dependent on whether your existing ISA provider has to liquidate your holdings. You should allow up to 30 business days for the transfer.

For all transfer requests, we will process and send out your ISA transfer form to your existing ISA provider within 1 business day of us receiving your transfer form. We will then on a periodic basis talk to your ISA provider to ensure that the transfer is processed quickly and efficiently.

Why do you still use a paper application for a transfer-in?

The paper application is due to the fact that many traditional ISA providers still require a wet signature to process an ISA transfer requests.

If I open a new IFISA, can I put my existing P2P investments into it?

We have been in discussions with HMRC since the launch of the Innovative Finance ISA to work out a method of transferring your Peer to Peer investment to your Innovative Finance ISA. Although it is allowed, the solution is not easy for an investor. 

We would require you to fund your Innovative Finance ISA with an amount totaling the Investment Amount of the Peer to Peer investment you want to transfer. 
For more information, please contact us at 020 7118 7570.

What happens with interest paid in IFISAs?

The interest earned on your investments will be held in your IFISA, unless you have specifically requested it to be paid out to your bank account during your application process.

Investors can reinvest their interest in any investment on the platform without having to meet the normal minimum investment requirements. You can change where you would like future interest to be paid by going to ‘My Account’ and ‘My Investments’.

Is interest paid gross?

Interest paid on Loans, Bonds and Loan Notes are paid gross, so you would be responsible for the payment of any income tax due on the interest you receive through Crowdstacker.

What fees does Crowdstacker charge investors?

At Crowdstacker we do not charge fees to investors wherever possible. There are no fees to open a P2P Lending Account or an Innovative Finance ISA Account and we do not charge any fees for investing in our Peer to Peer loans, Bonds or Loan Notesinvestments, so every penny you invest earns interest. Here is a breakdown of our fees:

Innovative Finance ISA fees:

  1. Innovative Finance ISA opening fee - £0
  2. Innovative Finance ISA transfer in fee (to transfer into your IFISA from any existing cash ISAs or Stocks and Shares ISAs) - £0. Please note that your existing provider may charge a fee to transfer to us.
  3. Innovative Finance ISA annual fee - £0

P2P Lending Account fees:

  1. P2P Lending Account opening fee - £0
  2. P2P Lending Account annual fee - £0

Investment fees:

  1. Investment fee (to invest in a Peer to Peer Loan, Bond or Loan Note investment) - £0
  2. Investment transfer fee (to sell your investment to another party through the platform) - £0
How does the Crowdstacker Innovative Finance ISA work?

The Innovative Finance ISA works in a simple and straightforward way. Basically you put your money into your Innovative Finance ISA account. You then choose business(es) to lend to via either bonds, loan notes or peer to peer loans from those available on the Crowdstacker platform. The business(es) pay you an agreed rate of interest throughout the term. Your investment is then repaid by the business(es) into your Innovative Finance ISA account at the end of the term.

How much interest will I receive with the Crowdstacker Innovative Finance ISA?

In order to earn interest on your Innovative Finance ISA money you will need to lend your money to one or more of the business(es) listed, either online though the Crowdstacker platform or via post by completing the relevant application forms, and hold these investments in your Innovative Finance ISA.

Each business listed on the platform offers you a different rate of interest (i.e. 5.43% p.a. or 7% p.a.), interest frequency options (i.e. quarterly or annually) and term (i.e. 12 months or 3 years). You pick the business(es) you want to lend to and how much. The business(es) that you lend to pay you the agreed rate of interest periodically and return your capital to you at the end of the term. The interest you receive will be tax-free (up to the specified ISA limits). You will start to earn the relevant interest on your investment from the commencement date of the investment you select which is 1 week following the closing.

An example Crowdstacker Innovative Finance ISA account could look like this:
£2,000 P2P loan investment with company A, paid annually at 5.43% p.a. over 18 months
£1,000 P2P loan investment with company B, paid quarterly at 7% p.a. over 3 years

With these above peer to peer lending examples you would earn interest at a rate of 5.43% per annum on an investment of £2000 and you would earn interest at a rate of 7% per annum on an investment of £1000. This is just an example, you can invest your money as you see fit and hold as many investments in your Innovative Finance ISA as you wish.

Does Crowdstacker charge any fees to open an Innovative Finance ISA?

It’s completely free to open an Innovative Finance ISA account with Crowdstacker.

Crowdstacker does not charge any fees to transfer ISA funds from previous or current tax years into your Innovative Finance ISA.

What happens to the investment under an ISA if a lender passes away?

An ISA ceases on the death of the investor. Any interest or gains in respect of investments in his or her ISA that arise (which in general terms means ‘paid’) after the date of death to the date of closure are not exempt from tax.

But there is no loss of exemption on interest, dividends or gains which arise before the date of death, including any gain treated as arising as a result of the death of the investor under the rules for investments in policies of life insurance.

Can I have an Innovative Finance ISA with more than one platform?

Under the current terms set out by HMRC it is not possible to open more than one IFISA in any given tax year.  This is exactly the same as the terms for the Cash ISA and Stocks and Shares ISA. 

What are the ISA limits?

The overall ISA limit of £20,000 can be split between a Cash ISA, a Stocks and Shares ISA, and an Innovative Finance ISA as the investor wishes. 

Can I apply for an Innovative Finance ISA on behalf of someone else?

Strictly, all ISA applications must be made by the investor.  But Crowdstacker may accept an application from someone holding a Lasting Power of Attorney (LPA) which has been registered with the Public Guardians Office and which gives the attorney the power to make the decision to open an ISA.

Crowdstacker will need to:

  • see the LPA (or a certified copy of it) and retain a copy for their records in case the account is queried by HMRC auditors,
  • check any restrictions on the LPA to see that it is broad enough to cover the opening of an ISA.
Can I make a withdrawal from my Innovative Finance ISA or P2P account?

When interest payments have been paid into your IFISA Account or your P2P account or you have un-invested money in your account, you are free to withdraw these cash funds at any time by going to ‘My Account’ and ‘My Investments’, and requesting a withdrawal by clicking on the ‘Transfer Funds’ button related to your IFISA or P2P account.

What are the tax rules on an ISA?

Investors do not have to declare income or gains from an ISA on their tax returns, unless the ISA subscription has been made void. Capital losses in respect of ISA investments are disregarded for the purposes of capital gains tax.

How many ISAs can I subscribe to?

Investors can subscribe in each tax year to one of each of the following:

  • Cash ISA;
  • Stocks and Shares ISA; and
  • an Innovative Finance ISA.
Who can subscribe to the new Innovative Finance ISA?

To be eligible to subscribe to an Innovative Finance ISA an investor must:

  • be aged 18 or over;
  • be resident in the United Kingdom or, if not a resident, be performing duties as a Crown employee serving overseas and paid out of the public revenue of the United Kingdom (typically a serving member of the armed forces, or a diplomat), or be married to, or in a civil partnership with, such a person; 
  • not have subscribed to another ISA of the same type in that tax year otherwise than by way of additional permitted subscriptions, flexible ISA replacement subscriptions, defaulted cash account subscriptions to a cash ISA, and Help to Buy ISA reinstatement subscriptions; and
  • not have exceeded the overall subscription limit which is £20,000 for 2017/18.
How do I open a Crowdstacker Innovative Finance ISA?

The process to open a Crowdstacker IFISA is very easy. All you need are your bank account details and your National Insurance number to hand.

You can apply for an ISA in just a few simple steps online. Click the 'Open an Account’ button which you can find in the menu bar at the top of this web page. It takes a few minutes to apply and you can then start your tax-free Peer to Peer investment portfolio immediately. 

When you start the Innovative Finance ISA application journey you will also be given the choice to download and complete a paper application which you can return by post.

What is an Innovative Finance ISA?

Prior to April 6th 2016 there were broadly two categories of ISA – Cash ISAs and Stocks and Shares ISAs. Now there is a new category called the Innovative Finance ISA (IFISA) which allows individuals to hold Peer to Peer (P2P) loans free of tax on interest and capital gains.

Every UK adult is permitted to invest up to £20,000 tax-free in an ISA in 2018/19. It is possible to split this allowance across the four different types of ISAs. But you cannot open more than one new ISA in each class in each tax year. (i.e. only ONE cash ISA and ONE Stocks and Shares ISA and ONE Lifetime ISA and ONE Innovative Finance ISA can be opened in each tax year).

Can I transfer from my existing ISAs?

You can transfer from your Cash ISAs and Stocks and Shares ISAs into your Crowdstacker Innovative Finance ISA.

If you apply online for the Innovative Finance ISA you will be offered transfer forms during the online application process which will allow you to transfer from any existing ISAs to your new Innovative Finance ISA. You can also find transfer forms in the 'My Investments' area of your account.

If you would like us to send you transfer forms by post, please call us on 020 7118 7570.