We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
Can you wrap an ISA around a property investment?

alonso_14
Posts: 6 Forumite

Are ISAs only available as products to purchase, or can you use your allowance by wrapping it around an existing investment? I ask, as I inherited an interest in 3 properties from my father. This provides an income and, I imagine, will work effectively as my pension later in life. I can't take out any of my interest without selling property, which I don't want to do. However, I wondered if there is anyway of using my ISA allowance each year to effectively wraparound an increasing amount of my overall investment?
0
Comments
-
No, I wouldn't have thought so.
This link makes it clear what you can include in an ISA... https://www.gov.uk/individual-savings-accounts/how-isas-workWhat you can include in your ISAs
Cash ISAs can include:
- savings in bank and building society accounts
- some National Savings and Investments products
Stocks and shares ISAs can include:
- shares in companies
- unit trusts and investment funds
- corporate bonds
- government bonds
You cannot transfer any non-ISA shares you already own into an ISA unless they’re from an employee share scheme.
Lifetime ISAs may include either:
- cash
- stocks and shares
Innovative finance ISAs include:
- peer-to-peer loans - loans that you give to other people or businesses without using a bank
- ‘crowdfunding debentures’ - investing in a business by buying its debt
You cannot transfer any peer-to-peer loans you’ve already made or crowdfunding debentures you already hold into an innovative finance ISA.
0 -
Can you wrap an ISA around a property investment?Thankfully not.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
dunstonh said:Can you wrap an ISA around a property investment?Thankfully not.
The ISA money can be lent to your own limited Company, which itself could buy an investment property and would pay interest back to the ISA.
0 -
mikael said:dunstonh said:Can you wrap an ISA around a property investment?Thankfully not.
The ISA money can be lent to your own limited Company, which itself could buy an investment property and would pay interest back to the ISA.
0 -
mikael said:dunstonh said:Can you wrap an ISA around a property investment?Thankfully not.
The ISA money can be lent to your own limited Company, which itself could buy an investment property and would pay interest back to the ISA.Remember the saying: if it looks too good to be true it almost certainly is.0 -
jimjames said:mikael said:dunstonh said:Can you wrap an ISA around a property investment?Thankfully not.
The ISA money can be lent to your own limited Company, which itself could buy an investment property and would pay interest back to the ISA.How were you thinking about the process working in practice? For downsides to be considered, it would be necessary to understand the exact process. I was thinking something along the lines of the following1) Set up Limited company with OP as sole director2) Director makes a loan of £20k to company3) Company purchases £20k interest in property from director4) Director invests £20k proceeds in IF ISA5) Company takes out £20k loan via P2P platform funded by director using the IF ISA. Initially this could be for a Wonga Loans type interest rate over a period of 1 year, but can be adjusted downwards over successive 1 year terms6) Wait until 6th April, goto (2)Maybe step 6 isn't needed. Maybe it could just be done with £1 and an astronomical interest rate.1 -
masonic said:jimjames said:mikael said:dunstonh said:Can you wrap an ISA around a property investment?Thankfully not.
The ISA money can be lent to your own limited Company, which itself could buy an investment property and would pay interest back to the ISA.How were you thinking about the process working in practice? For downsides to be considered, it would be necessary to understand the exact process.Remember the saying: if it looks too good to be true it almost certainly is.0 -
jimjames said:masonic said:jimjames said:mikael said:dunstonh said:Can you wrap an ISA around a property investment?Thankfully not.
The ISA money can be lent to your own limited Company, which itself could buy an investment property and would pay interest back to the ISA.How were you thinking about the process working in practice? For downsides to be considered, it would be necessary to understand the exact process.
0 -
In many cases a director can receive tax free interest from their own company anyway. The ISA may well be an unnecessary complication. The optimum remuneration strategy for a director of an owner managed company is typically salary at the secondary NI threshold (£9,100 in 22/23) and then the rest dividends. But because there is £5,000 at the 0% starting rate for savings and the £1,000 savings allowance, if they receive interest of up to £9,470 on top of the £9,100, then that interest is taxed at nil for the director and the company gets CT relief. And then you can then reduce dividends accordingly (as they have been replaced by the interest) which generates a further Income Tax reduction for the director.
No extortionate fees, and the ISA allowances are still available to invest elsewhere.1 -
spider42 said:In many cases a director can receive tax free interest from their own company anyway. The ISA may well be an unnecessary complication. The optimum remuneration strategy for a director of an owner managed company is typically salary at the secondary NI threshold (£9,100 in 22/23) and then the rest dividends. But because there is £5,000 at the 0% starting rate for savings and the £1,000 savings allowance, if they receive interest of up to £9,470 on top of the £9,100, then that interest is taxed at nil for the director and the company gets CT relief. And then you can then reduce dividends accordingly (as they have been replaced by the interest) which generates a further Income Tax reduction for the director.
No extortionate fees, and the ISA allowances are still available to invest elsewhere.
1
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.3K Banking & Borrowing
- 252.9K Reduce Debt & Boost Income
- 453.2K Spending & Discounts
- 243.3K Work, Benefits & Business
- 597.8K Mortgages, Homes & Bills
- 176.6K Life & Family
- 256.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards