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A New ISA

From 6th April 2016 there will be a new financial product, the Innovative Finance ISA.

This is the government’s adaptation of the ISA system to include interest and gains made from peer to peer lending.

This good news needs to be considered alongside the new 0% band of savings income which stretches as far as £1000 for basic rate taxpayers and £500 for higher raters.  Additional rate taxpayers get nothing.  The 0% tax on savings income can also cover £5000 if your non-savings income does not take your total income above £15,600 (at 2015/16 numbers).

It is perfectly possible that you won’t need the benefit of the ISA shelter.  The Innovative Finance ISA could be just for you, however, if your other income is such that returns on peer 2 peer lending would be taxable at your marginal rate or would push you above punishing thresholds for losses of student grants and loans, child benefit or the personal allowance.

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