Innovative Finance ISA (IF)

dawnwakeling

Hi I am after some advise please, a few years ago I put some of my savings into an IF ISA and now the company has gone into administration.  This as been ongoing for over a year to try and sort out and I have now been told that I need to find someone who will take on an IF ISA or I can transfer the money I to my name but I will probably pay a dividend tax ..... if anyone knows that a dividend tax is and how much it would be I would be truly grateful ..... I don't have much money anyway and the thought of me loosing this ISA money is making me quite ill.  Anyone who might have any advise I would really appreciate 

Thanks 

grumiofoundation

 Are you able to remove the money from the ISA? 

Transferring money out of an ISA would never result in tax needing to be paid. Is someone asking you to pay this 'dividend tax' upfront by any chance (if so that screams SCAM!!!).

If you give the name of the company that you have the IF ISA with people may have specific experiences that can help. 

Albermarle

As P2P companies are all different , then as above you need to say who the company is ( no problem to name companies on this forum ).
I would have thought that there should be three possible scenarios.
1) The money is stuck in the IFISA whilst the administration of the company is ongoing
2) You can transfer to another IFISA provider 
3) You can just withdraw the money 

AS above the dividend tax sounds a bit dodgy but without knowing the details it is difficult to say anything for certain.

dunstonh

This as been ongoing for over a year to try and sort out and I have now been told that I need to find someone who will take on an IF ISA or I can transfer the money I to my name but I will probably pay a dividend tax .

That doesn't sound accurate.   You only pay dividend tax outside of the ISA. Not in it.    If the ISA status has been lost, then that would be correct where dividends are payable above the annual dividend allowance.

If it is outside of the ISA you cannot transfer it to another ISA.

Can you clarify what you have actually been told?  Maybe name the company so we can look at details ourselves?

masonic

Perhaps if you named the P2P firm people would be able to clarify the status of the administration and situation for investors. There are a few P2P firms in administration at various stages of the process and some of these are not permitting withdrawals under any circumstances, while at least one is.

Also, in addition to transferring an IF ISA to another IF ISA, you can transfer it to a cash ISA or a S&S ISA. To transfer the IF ISA in full, it must contain cash only, no loans (or you can partially transfer the cash balance, leaving behind anything invested in loans).

dawnwakeling

Thanks for all the comments so the company that has gone into administration is Reyker and the IF ISA is with Blueprint Industrial Engineering.  The last letter is received states the following:. "Due to the nature of the product, an IF ISA there are far few brokers that have the necessary permissions to hold assets held within this tax wrapper and are prepared to accept new clients and, for these reasons, there is no alternative Nominated Broker for the IF ISA holding Clients.  I regret to inform you that this means that the JSAs cannot transfer your custody assets and CAI and that your custody assets and CAI may now only be returned to a broker of your choice.

Please note that you could choose to remove the custody assets from the tax wrapper, the IF ISA, and transfer them to a new broker or have them issued in your name.  Please note this will have tax implications and we strongly suggest that you take appropriate financial advice if considering this option."

I would like to have them transferred to my name but cautious of doing this with the tax implications.  The amount in the IF ISA is just short of 7k so don't really want to loose too much if I can and matures in June 2022.

I hope this information helps a bit more. 

Albermarle

This seems a very obscure investment for n average retail investor. How did you ever get involved ?

Anyway looking at google, it seems Blueprint Engineering offered a 6% paying four year duration bond in 2018.
They seem to be a real company involved in engineering, but in 2018 were making a loss and registered on a small part of the Cyprus stock market . So 6% was probably too low for what seems a risky business.
The bond was offered in a IFISA wrapper by Reyker securities and it is this company that is in administration.
Almost miraculously the bond itself seems to have not defaulted .

It looks complicated but if it was me I would just get back what I could and have the bond in my own name, and forget about any tax issues that may or may not occur . Probably for the relatively small sum involved there might not be any tax issues but I am just guessing. 

In future better to stick to more mainstream investments .

masonic

The company seems to be making losses year after year and marketing these bonds to consumers to keep itself afloat. It looks to me like Reyker was potentially liable for any investor losses as it approved materially misleading financial promotions, and the Financial Ombudsman has set a precedent of holding FCA authorised firms responsible for such regulatory breaches. Now that it is in administration, that avenue of compensation will be closed should the engineering firm fail.

I don't see that you have any option but to take out of the IFISA and into your name. Tax implications will be around the 6% interest you have received and will receive. The Personal Savings Allowance can be used against this, so it may be a non-issue.

I have to ask, what attracted you to this particular company and investment?

Albermarle

I have also found a statement from the administrators of Reyker ' Smith & Williamson' . They have managed to return 95% of clients assets so far with no reductions due to FSCS monetary assistance .
They had a broker lined up to take the assets in IFISA form but the deal seemed to fall through. Hence the communication to the OP .
Choice seems to be .Either find another IFISA provider who will accept transfer of the Blueprint Engineering bond to them - probably very unlikely OR have the bond transferred to you but outside an IFISA . As said this may mean you pay some tax on the interest, but in the circumstances I would just be happy that I hadn't lost £7K.

masonic

...yet. Though June 2022 is not far off, so fingers crossed the house of cards doesn't fall down until after it has been repaid.

greecetogo

Hello,
I am in the same position as Dawnwakeling. My estranged husband bought these IF ISA's for my two autistic boys as an investment a few years ago. £10,000 each so . confused as what to do. Do you know of a good broker that would take this on, or is better to try and change the name over. ? I would prefer to find a broker, or at least someone that can help me .