Policy paper

Draft legislation: Innovative Finance Individual Savings Account and peer to peer loans

Establishing a new Innovative Finance Individual Savings Account (ISA) from 6 April 2016 where interest and gains from qualifying peer to peer loans will be eligible for ISA tax advantages.



This technical consultation will be of interest to individuals making peer to peer loans, peer to peer lending platforms and to ISA providers and investors.

It is intended that these regulations, which are being published in draft for consultation, will amend the Individual Savings Account Regulations (S.I. 1998/1870) from 6 April 2016, to establish a new type of ISA - the Innovative Finance ISA. Under this new account, interest and gains from peer to peer loans can benefit from ISA tax advantages. Individuals aged 18 or over will be entitled to subscribe to an Innovative Finance ISA, which will be offered by peer to peer lending platforms with the appropriate regulatory permissions.

Peer to peer lending platforms are regulated by the Financial Conduct Authority (FCA) where they carry out activities detailed in Article 36H of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I 2001/544). These draft regulations draw on terms and concepts in operation within this Article at date of publication.

HM Revenue and Customs has published draft regulations for a period of technical consultation, which will close on Monday 1 February 11.45 pm. Alongside these draft regulations, an explanatory memorandum and a Tax Information and Impact Note have also been published.

This measure was first announced at Budget 2014.

Any comments on these draft regulations should be sent by email to savings.audit@hmrc.gsi.gov.uk.

Published 8 December 2015