Following a consultation on the introduction of peer-to-peer loans into ISAs, HM Treasury has announced a new “Innovative Finance” Individual Savings Account (ISA). 

In October 2014 a consultation was launched into the proposed approach for implementing the inclusion of such loans and 81 formal responses were received.  HM Treasury’s response document contains responses given to proposed ISA qualifying investment changes and the new Innovative Finance ISA.  The key policy design decisions that have been made in response to the consultation are to:

  • Create the Innovative Finance ISA to accommodate peer-to-peer loans.
  • Modify existing ISA rules regarding legal ownership of investments for the Innovative Finance ISA, in order to accommodate the established peer-to-peer operating model.
  • Adapt ISA rules regarding withdrawals and transferability for the Innovative Finance ISA, so that these only apply to cash held in an Innovative Finance ISA.

HM Treasury proposes to publish draft legislation for consultation later in 2015, with changes allowing peer-to-peer loans expected to take effect from 6 April 2016.