What is an Innovative Finance ISA?

The Innovative Finance ISA (IF ISA) is a way for you to hold some of the newer types of investment, including ours, in an ISA.

The IF ISA can be held alongside your Cash and Stocks & Shares ISAs. It has been launched by Government to reflect the growing popularity of alternative finance platforms as a new place to save and invest for decent returns.

There are many similarities between Cash and Stocks & Shares ISAs and the IF ISA, including that your returns will not be taxed. Other key benefits are outlined below.

  • Invest up to £20,000 tax free

    The IF ISA allows you to subscribe up to £20,000 in the 2017/18 tax year and protects the return on those investments from tax. You can also reinvest your returns without being taxed, meaning you can grow your money for as long as you like, tax free.

  • Flexible management

    You can choose to split your ISA allowance across Cash, Stocks & Shares, and IF ISAs as you please. You can even move your money around between your ISAs, as long as you stay within the annual limit. Some providers may charge you for this, so do check first.

    Just bear in mind that as with Cash and Stocks & Shares, you can only invest in one IF ISA in each tax year (so if you invest in an IF ISA with Abundance, you cannot open one with another provider until next year).

  • Transfer your existing ISAs

    If you have already built up tax free savings in Cash or Stocks & Shares ISAs in previous tax years you can transfer some or all of these funds to an IF ISA, no matter how big the pot. This allows you to diversify your ISA portfolio while keeping the tax free benefit.

As with any investment product there are risks. Part or all of your original invested capital may be at risk and any return on your investment depends on the success of the project invested in. You should be prepared to hold Abundance investments for their full term (and many will have terms of more than 15 years). Abundance investments may not be readily realisable (and their value can rise or fall). They may be secured or unsecured, and where they are secured this does not ensure repayment. Estimated rates of return can be variable and estimates are no guarantee of actual return. Specific risks will apply in relation to each product. Consider all risks before investing and read the Offer Document for each investment.