HM Treasury has launched a consultation on how best to include P2P loans in ISAs to allow returns to investors to be tax free, according to a statement released today.
The consultation will research whether P2P loans should be included in existing stocks and shares ISAs, or whether they would be best suited to a new third type of ISA.
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Chancellor George Osborne said in the Budget that ISA eligibility would be extended to include P2P loans in order to increase choice for investors.
Financial Secretary to the Treasury David Gauke said: "P2P lending is an exciting, innovative new sector and it’s right that investors who want to lend money via P2P platforms should be able to hold these loans in their ISA alongside more traditional investments."
HM Treasury said the P2P lending sector had been growing at a rate of over 100% per year, with over £1.6bn lent via P2P to date.
"Allowing P2P loans to be held in ISAs will provide greater choice to ISA investors, and will support the government’s aim to diversify the different sources of finance that are available to borrowers by encouraging the growth of the P2P lending sector," said the statement.
The consultation opened today and closes on 12 December 2014. It also seeks views whether they are suitable assets to be held in Child Trust Funds and Junior ISAs.
Once this consultation has closed the government will consider all responses and will publish a ‘summary of responses’ document. Taking the consultation responses into account, necessary legislation will then be amended so that P2P lending may be included in ISAs.
