Crowdstacker Innovative Finance ISA
Crowdstacker has been spotlighted in peer-to-peer lending UK over the past six months, for a number of reasons, but primarily because they were one of the first directly FCA authorised peer-to-peer lending platform capable of offering an Innovative Finance ISA (IFISA) to retail investors. Through Crowdstacker’s manual loan-selection SME lending platform, investors can potentially achieve some of the best interest rates on the market with the confidence of asset-security on all loans and a 0% default track record since launch in June 2015.
*Past performance is not a reliable indicator of future performance. P2P lending is not covered by the FSCS.
Here we’ll layout step-by-step how you can gain exposure to some of the best alternative investments through a tax-efficient ISA wrapper, at a time when stock market volatility is affecting portfolios drastically and achieving the best savings rates on cash is almost non-existent!
Opening a Crowdstacker IFISA
It’s quick, it’s simple, it’s designed to be robust. Crowdstacker asks probing questions to ensure you are suitable for a peer-to-peer investment. Drawing attention to the risks involved in P2P lending, such as lack of coverage by the Financial Services Compensation Scheme (FSCS), is a pillar of Crowdstacker and something which you will need to engage with prior to being able to invest.
It can take 5 mins to register an IFISA online. Or, you can opt to sign-up via paper application.
Five Simple Steps
1. Your details
Step 1: Your Details
What you will be required to input:
- NI no.
- Contact/address details
- Bank account details
- Option of where interest is paid: IFISA Account or Bank Account
For marketing purposes, Crowdstacker asks you where you’ve ‘heard’ about the platform. There’s an ‘Other’ option in the drop-down allowing you to insert ‘Orca Money’, should you wish!
Step 2: Understanding
1. How much knowledge or experience do you have of investing?
2. Do you understand that your capital is at risk?
3. Do you understand that you may not be able to access you money before the repayment date?
4. Do you understand that peer-to-peer loans are not covered by the FSCS?
5. Are you investing more than 10% of your total wealth?
Step 3: Review
Like an airline or hotel booking, Crowdstacker provides you the personal details you entered with supporting check boxes including Ts & Cs and so on.
Important things you’ll be declaring:
- I have not subscribed and will not subscribe more than the overall subscription limit in total to a cash ISA, a stocks and shares ISA, and an innovative finance ISA in the same tax year;
- I have not subscribed and will not subscribe to another innovative finance ISA in the same tax year that I subscribe to this innovative finance ISA.
This is important, as it is your responsibility to ensure you do not oversubscribe your annual ISA allowance, which for 2016/17 is £15,240. This can be split between Cash, Stocks & Shares and IFISA accordingly. Furthermore, a primary rule of the new Innovative Finance ISA is that you can only subscribe up to your annual allowance (this year’s for example) to one IFISA in the year. You can open other IFISAs with other providers and transfer old ISA money in to them, but you can only subscribe some of or all your annual allowance to one IFISA in the year.
Important things you’ll be authorising your IFISA provider to do:
- Hold your cash subscription, ISA investments, interest, dividends and any other rights or proceeds in respect of those investments and any other cash.
- Make on your behalf any claims to relief from tax in respect of ISA investments.
Important things you’ll be confirming:
- I apply to subscribe for an Innovative Finance ISA for the years 2016/17 and each subsequent year until further notice;
- I understand that an Innovative Finance ISA is an innovative finance individual savings account as defined in the Individual Savings Account Regulations 1998 as amended.
Step 4: Payment
Would you like to pay by the following?
1. Make payment now via debit card or bank transfer
2. Transfer from an existing ISA
3. Fund later
You can transfer as much as you like from old ISA money – there is no subscription limit on this and there are no fees from Crowdstacker to transfer in. The subscription limit applies to your current, annual ISA allowance.
Step 5: Complete
Once you have decided on how, or when, you’ll fund your Crowdstacker Innovative Finance ISA you will be taken to a completion page, entitled: ‘Thank you for opening your ISA account’.At this point you have the option of investing through your Crowdstacker IFISA. There are two current investment opportunities available through Crowdstacker, listed below.
Crowdstacker Investment Opportunities
Interest rate: 7% p.a
Term: 3 years
Security: all-asset debenture
Min. investment: £500
Interest rate: up to 6.39% p.a
Term: 12, 18 or 36 months
Security: asset secured LTV 70%
Min. investment: £1,000
Note: Quanta has reached its target subscription and is no longer available to invest in.
Potential benefits of a Crowdstacker Innovative Finance ISA
By now you will know how to register and invest through a Crowdstacker Innovative Finance ISA, but what exactly might you be getting in return?
1. Any interest is earned tax-free
The returns you make on your Crowdstacker investments will be sheltered from tax.
2. Some of the best interest rates on the market
Through Crowdstacker you can earn up to 7% p.a
3. Secured investment opportunities
Crowdstacker illuminates the risks involved in P2P lending and adheres to a strict due diligence process, ensuring the borrower security packages on all investments are sufficient to meet the criteria for listing.
Your capital is at risk if you lend to businesses. Lending through Crowdstacker is not covered by Financial Services Compensations Scheme. Tax treatment is dependent on an individual’s circumstances and may be subject to change in the future. Crowdstacker Limited is authorised and regulated by the Financial Conduct Authority (frn. 648742)