Summary of our NISA Consultation Response

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Nick Moules
11th December 2014

rebuildingsociety responded to the recent Treasury consultation on peer-to-peer loans falling under ISA wrappers. We’ll keep you posted on the outcome of the consultation – ultimately we’re delighted that we’ve reached this stage so quickly and with the tax breaks for losses on p2p loans recently announced in the Autumn Statement, the case for investing in UK businesses is becoming even more compelling.

Here is a summary of our sentiment and response:

- We believe p2p platforms should have a secondary market to facilitate liquidity, although we don’t believe it is practical to enforce ‘guaranteed sale timescales’, as it is an open market.

- Investors could be able to transfer their wrapper and keep the investments as non-ISA, if liquidity is hard to find. Clearly documenting the period that the investment came under the investor’s ISA wrapper would be critical here.

- Creating a third ISA class between cash and stocks and shares would be the right move. It will position the type of investment between cash and shares, which is appropriate for moderate investors.

- Allowing free and unlimited transference of ISAs in between platforms could create a burdensome level of work for smaller platforms.

- A ‘self-invested ISA’ might be the best approach for lenders. They can pick and choose the investments that go into an ISA and report to HMRC in the same way they currently do.

- We’re keen to engage with ISA Managers, but we also recognise that the value in p2p stems from disintermediation.

- We haven’t ruled out applying to be an ISA Manager and we have floated the idea of confident investors being awarded ISA Manager status, should the final rules demand all ISAs to be controlled by an ISA Manager.

 

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