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ISA Investing

Posted on 16 October 2021

Tax Free ISA Investing

What is an ISA?

ISA stands for 'Individual Savings Account'.  The UK government introduced ISA's on 6 April 1999 to encourage more people to start saving more money.  An ISA is a ‘wrapper’ that allows you to invest without paying income tax or capital gains tax on any interest or profits that you earn.

What are the benefits of tax free ISA investing?

The benefits of an ISA are:

  • it’s exempt from income tax and capital gains tax on the investment returns
  • no tax is payable on money withdrawn from the ISA scheme
  • your ISAs won’t close when the tax year finishes, so you’ll keep your money on a tax-free basis for as long as you keep it in your ISA account
 Overall ISA’s have been a great way for the UK population to invest and save tax free and boost their returns. 

The allowance and criteria for an ISA

For the current tax year, the ISA allowance is £20,000, subject to a maximum of £4,000 into a Lifetime ISA (see below).  
Anyone who is resident in the UK for tax purposes and over the age of 18 can open an account. 

The different types of ISA

There are various types available.  You can mix and match these as long as you don't exceed the annual allowance(s). 

Innovative Finance ISAs (IFISA)

The IFISA is an ISA that allows you to invest in debt and peer to peer lending opportunities through crowdfunding and peer to peer lending platforms.  These loans are outside of the traditional lending institutions and are typically offered on a fixed term, fixed return basis.

IFISAs is not protected by the FSCS guarantee.  Further details can be found in our Innovative Finance ISA FAQs.  

Cash ISAs

Cash ISAs are essentially the same as traditional saving accounts.  However, your savings are limited by the annual tax-free ISA allowance. There are 3 types of Cash ISAs: 
  1. instant access: as a normal savings account, you can pay and withdraw money at any time
  2. regular savings: you deposit a certain amount of money into the account each month
  3. fixed rate cash ISA: you 'lock' away your money for a certain period in return for a fixed return
Please note you can only pay into one Cash ISA each financial year.   You can transfer the full funds of your existing ISAs over to your new ISA.

Stocks & Shares ISAs

Stocks and Shares ISAs offer you tax-free gains and you don't have to pay tax on your dividends.  You can choose to invest into a wide range of funds, shares, exchange-traded funds (EFTS) or investment trusts.Please note, you can only invest in one Stocks & Shares ISA each tax year. 

Lifetime ISAs

A Lifetime ISA is a government backed scheme to help people save for their retirement or to buy their first home. You can only invest up to £4,000 per annum. The government will add a 25% bonus on top of your investment, which is paid monthly into your account. If you use this ISA for retirement, you can only save up to you are 50 and cannot withdraw the money until you are 60.  If you use this ISA to buy your first home, you must be between 18-39 years old and must be a first time buyer.

The Junior ISA 

The Junior ISA is for people under the age of 18.  You can pay up to £9,000 per annum into their account. The £9,000 is not affecting your £20,000 tax-free ISA  allowance.

The Simple Crowdfunding ISA

The Simple Crowdfunding ISA is an IFISA that gives you the opportunity to invest into property projects, receiving average returns of 9% pa (pro-rata) tax free, secured on property*.  To set up and use your Simple Crowdfunding ISA account is free.  There are no set up costs, platform charges or advisor fees.  You can transfer your existing ISA and / or start a new one with Simple Crowdfunding.  

*We do on occasion have other investment opportunities that are IFISA friendly that may be made available to account holders.

Reasons to invest through an IFISA

Property investment is of interest to many people.  Securing investment on bricks and mortar is popular.  Even through the pandemic, the property market has performed remarkably well.  On the Simple Crowdfunding platform, you decide which property projects you want to invest in.  You can spread your investments over multiple projects, diversifying your risk.

Open your free Simple Crowdfunding ISA account

Create a new IFISA account

If you are new to Simple Crowdfunding, you will first need to Register before you can set up your IFISA account. This will only take a few minutes.  Once you have Registered, you can go to your account and click on 'IFISA'.

Transfer an existing ISA

Once you have opened your IFISA account, you have the option to transfer existing ISAs into this one.  To transfer an existing ISA is simple, you just need to be Logged In to your account. You can access the transfer screens from your portfolio (ISA Investments Tab) or through the drop down menu clicking on the below:  

  • Go to 'My Account' (top right hand of the screen)
  • Click on 'IF ISA'
  • Click on 'New Transfer'
Follow the simple step by step instructions that guide you through the form.  You  will need to provide your National Insurance Number (and existing ISA manager details if you are transferring an account).   You will then need to download the ISA transfer form and return the signed copy to Simple.

Our team will then request the transfer from your existing ISA provider and manage this on your behalf.  We will also let you know as soon as the request is completed.   

Start building your investment portfolio today

Once you have opened and funded your ISA, choose from projects that are IFISA suitable and receive tax-free returns on your investment returns.  As the account holder, you decide which projects you would like to be involved with.  Look for the 'IFISA Eligible' banner on projects on our home page.  Once invested, a summary of  your IFISA and other investments are shown in your personal portfolio dashboard.  Look under the IFISA banner in your portfolio.  Simple!

To summarize some key ISA benefits:
  • Your investment returns are tax-free.
  • Invest up to £20,000 per tax year.  This is the maximum amount that can be invested per year currently.
  • You choose the projects that are right for you and your investment strategy
  • Transfer funds from existing ISA accounts. Simple will manage the process on your behalf.
  • No set up costs, platform charges or advisor fees.
  • You are in complete control of your investments with investment updates made available through your portfolios.
If you have questions about ISA investing or about setting up your IFISA account, then please Contact the Simple Crowdfunding team.   We will be happy to help.

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