Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
If you are interested in learning more about how to protect yourself, visit the FCA’s website here.
For further information about investment-based crowdfunding, visit the FCA’s website here.
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Blog
- 28 February 2024
ISAs (or Individual Savings Accounts) are tax-efficient savings and investment accounts. Anything within the ISA is free from income tax and capital gains tax, meaning that people get to keep more of their returns. However, there are limits on how much can be paid in (currently £20,000 each tax year) and how many ISAs individuals can open each tax year.
This article looks at proposed changes to ISA rules from 6 April 2024, but keep in mind that it’s not advice. If you’re unsure how the rules apply to your individual circumstances, you may wish to consider advice. ISA or tax rules could change in the future.
From 6 April 2024, the ISA scheme will:
Allow multiple subscriptions to ISAs of the same type
Under the current rules, you can only pay into one of each type of ISA each tax year. For example, if you paid into a Triodos Innovative Finance ISA this tax year, you couldn’t pay into one with another provider in the same tax year. This means that ISA savers and investors had to think very carefully before choosing a provider.
From 6 April 2024, it will be possible to pay into ISAs of the same type with different providers within the same tax year. These welcome changes will mean that savers and investors don’t have to commit to one ISA provider for each ISA type each tax year.
This opens the way for investors to take advantage of opportunities when they arise. For example, say you’ve already opened an Innovative Finance ISA for the current tax year, but then saw an investment opportunity that you wanted to hold in an Innovative Finance ISA with a different provider, you could open the second one in the same tax year without breaking the rules.
This change could also benefit cash ISA savers, who might want to take advantage of higher rates from different providers. They would also be able to pay into a cash ISA with a variable rate and a fixed-rate cash ISA in the same tax year. This may be beneficial for financial planning, as savers could split their ISA subscriptions between a fixed-rate ISA and a variable cash ISA.
Allow partial transfers of current year ISA subscriptions between providers
It’s possible to transfer ISAs from one provider to another, and between different ISA types. However, if you want to transfer some of the current tax year ISA subscriptions – you must transfer the whole lot. For example, let’s say you paid £20,000 into a cash ISA this tax year, but then saw an investment opportunity in an Innovative Finance ISA with a different provider. You wouldn’t be able to move just a portion of it, you’d need to transfer the full £20,000.
This can be restrictive for savers and investors; once they’ve paid funds into an ISA, those subscriptions are committed for that tax year unless they want to transfer the whole lot. The new changes from 6 April do away with this restriction, allowing part of the current tax year ISA subscriptions to be transferred to another provider. So, if you had paid £20,000 into a cash ISA, you could transfer part of it elsewhere in the same tax year.
This gives more flexibility and allows people the option to move their current ISA subscriptions around depending on their situation, what opportunities arise, and what’s best for their financial planning.
Widen the scope of investments permitted within ISAs
Innovative Finance ISAs allow for tax-efficient investments into peer-to-peer vending and crowdfunding ventures. By lending money directly to organisations, you could make a real impact on the organisation and earn a higher rate of interest or dividends if the organisation you invest in does well. However, this is a high-risk investment as start-up businesses can fail and investors could lose the money they put in.
From 6 April 2024, there will be a greater range of permitted investments that can be held within an Innovative Finance ISA. For example, it will be possible to invest in “long-term asset funds”, like property and infrastructure projects, and open-ended property funds with extended notice periods. Please note, these are not currently available within the Triodos Innovative Finance ISA.
Keep in mind that ISA eligibility does not reduce the risks associated with the investment nor guarantee returns. It is possible to lose all of the money invested. As with all ISAs, there are eligibility requirements for the IFISA.
Investments offered on this platform are not readily
realisable, which means that they may be difficult to sell and you may not get
back the full amount invested. Investments are not covered by the Financial
Services Compensation Scheme (FSCS) and your capital is at risk and returns are
not guaranteed. Repayment of capital and interest or payment of dividends will
be dependent on the success of the organisation's business model and past performance isn’t a
reliable indicator of future performance. You should
always read the offer document in full before deciding whether or not to invest as it
will cover risks specific to an individual investment. You can read more about
the general risks associated with making these types of investments. If
you are unsure if any of these investments are right for you, you should
contact an Independent Financial Adviser.
Triodos Bank UK Ltd. Registered Office: Deanery Road, Bristol, BS1 5AS. Registered in England and Wales No. 11379025. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 817008.