We receive calls and emails every day asking about specific elements of crowdfunding via our platform. Some of our most common queries are about IFISAs (Innovative Finance ISAs) which were introduced in 2016. An IFISA allows people to include investments that have been made via crowdfunded bonds or peer-to-peer loans in an ISA, and, as with all Individual Savings Account (ISA) products, the interest is currently gained tax-free.
As the IFISA is relatively new, we have put together our most frequently asked questions and our responses to help anyone considering holding their investments in this way.
1. Can I put cash in my IFISA even if I’m not actively investing in anything?
Yes, of course. But it’s worth remembering the IFISA doesn’t pay any interest on cash held only on investments made. However, if you want to use up any remaining ISA allowances in the tax year (which runs from April to April) you can deposit the cash in the IFISA, and the date of the deposit will count as the date of subscription for your ISA allowance even if you invest the money in an offer in the next tax year.
2. Can I retrospectively put bonds that I have already invested in into an ISA?
No, unfortunately you can’t. It must be indicated at the time of application that you wish to hold the bonds in an IFISA. Once the bonds have been issued, if they aren’t held within an ISA, it’s not possible to move them into one.
3. What is the annual allowance for the IFISA and how does it work?
The annual ISA allowance for 2019-20 is £20,000. This is the annual limit for new ISA subscriptions, which is applied across all ISA types. Therefore, you can’t subscribe more than £20,000 across all ISAs you hold in one tax year. It’s worth remembering though that it’s possible to transfer ISA subscriptions from another ISA without it affecting your annual allowance (subject to transfer conditions).
4. Can I transfer cash out of my IFISA wallet?
Yes, absolutely. For example, if you receive an interest payment and there are no further investments you wish to make on the platform, you can request to transfer that cash from your IFISA account to another ISA provider so that the ISA status of the money is maintained. Transfers are made through completing an ISA transfer request form with your new ISA manager and are subject to certain conditions.
The other two options for cash held in your IFISA wallet are to reinvest it into another live ISA eligible offer on the Triodos crowdfunding platform, or withdraw the money to your bank account by using the ‘withdraw funds’ button in your investment portfolio. If you do withdraw the money to your bank account, please note that the ISA status of the money will be lost.
5. Along with an IFISA, what other types of ISAs does Triodos Bank offer and how do they differ?
We offer three types of ISAs:
• Cash - a range of instant access and fixed-term cash ISAs for cash savings
• Stocks & Shares - for investing in the Triodos Impact Investment Funds
• Innovative Finance - for investing directly in pioneering organisations delivering positive change via our crowdfunding platform.
There are several differences between our ISA products, which are outlined in full here. However, all are focused on helping to support organisations which are focused on positive change. It is also important to note deposits saved within the Cash ISAs are also covered by the FSCS (Financial Services Compensation Scheme), whereas investments in the Stocks & Shares ISA and the Innovative Finance ISA are not.