Introduction of ISAs to Funding Circle

aroominyork

Funding Circle intends to roll out ISA investing soon. What is the impact of this likely to be for investors? Is it likely that the additional funds this attracts will mean it takes longer for new investments to be allocated as loans? How will it affect the reinvestment of monthly income and repayments? Will the increase in supply of money result in interest rates to investors falling, etc.?

I am intending my first foray into FC, so if the impact of ISAs is likely to be negative I would invest now, pay the 40% tax on FC income and increase my SIPP payments to reclaim it. Comments on that strategy would be welcome.

pip895

I guess if the supply of cash goes up then two things may happen firstly the interest rate will drop and I am guessing that will effect existing account holders to + the rate at which your cash gets lent out will drop.

I have just invested my first bit of cash in Funding circle. It has taken 10 days to get to 80% invested. The projected return is 7.6% which seems very high.

I will be interested in an ISA particularly if it is possible to move an existing investment over without selling up and reinvesting.

bigadaj

pip895 wrote: »

I guess if the supply of cash goes up then two things may happen firstly the interest rate will drop and I am guessing that will effect existing account holders to + the rate at which your cash gets lent out will drop.

I have just invested my first bit of cash in Funding circle. It has taken 10 days to get to 80% invested. The projected return is 7.6% which seems very high.

I will be interested in an ISA particularly if it is possible to move an existing investment over without selling up and reinvesting.

You have to sell and re buy and investment on an open market to put money or assets into an isa, no different to equities.

The ifisa has been up and running at Ablrate for some time.

You obviously need to review investments as to their appropriateness, and whilst any gains will avoid capital gains and income tax you lose the ability to get relief on any defaults.

aroominyork

bigadaj wrote: »

You obviously need to review investments as to their appropriateness, and whilst any gains will avoid capital gains and income tax you lose the ability to get relief on any defaults.

Presumably the relief on defaults only relates to CGT and does not affect income tax liability?

pip895

There would be no tax liability or relief on loss of income from an asset held in an isa.

I have never owned a cash isa just s&s and I see p2p more as a type of rather illiquid bond fund than as a replacement for an interest baring cash account.

I have resisted puting money into p2p for years but I've got a little desperate about where to put the non equity part of my portfolio so decided to dip a toe into the water with funding circle.

bigadaj

aroominyork wrote: »

Presumably the relief on defaults only relates to CGT and does not affect income tax liability?

Not entirely sure of the question but I think the answer is no.

If you have a loan formally defaulted with a loss then that loss is written off against p2p income for that tax year.