To get the best lending results, compare all P2P lending and IFISA providers that have gone through 4thWay’s rigorous assessments.

IFISA Guide Up to 5th April 2024

This page shows the current – but outgoing – rules on IFISAs. They are valid for anything you do with IFISAs up until 5th April 2024, when the rules will improve further for investors. If you're looking for the rules when you do anything with IFISAs from 6th April 2024 onwards, read this.

We have nagged the taxman's notoriously tight-lipped officials, and chased down accountants, IFISA providers and even 4thWay's own skilled experts to give you answers to all your IFISA questions, as well questions you never thought to ask. Here goes:

What is an IFISA?

An IFISA allows you to lend up to £20,000 per tax year (which always starts on 6th April) to individuals, businesses or to property owners, completely tax free.

For the most part, the lending available to you is peer-to-peer lending, which means you lend directly to borrowers, and not to a middle company that then lends on to those borrowers. This reduces risk by making it more likely those risks will stay spread out.

What do I really need to know about IFISAs?

  • The £20,000 annual contribution allowance is shared between all the following types of ISA: IFISAs, cash ISAs, lifetime ISAs, and stocks and shares ISAs. Married couples and civil partners open separate accounts to earn their allowances.
  • Most IFISA providers allow you to transfer into your IFISA as much money as you want from other ISAs, including cash and share ISAs, or other IFISAs, and you can also transfer out the other way.
  • Contrary to popular reporting, you may open as many IFISAs as you want at any time, e.g. to transfer different pre-existing ISAs into those new IFISAs. However, new contributions in a single tax year must all go into the same IFISA until the tax year is over.
  • To initiate transfers, don't withdraw your cash from your ISA or you could lose your IFISA allowance! Instead, you complete a form with the IFISA provider that you are transferring to, and it will initiate the transfer on your behalf.
  • Almost all P2P lending sites don't charge you extra for wrapping up your P2P loans in an IFISA wrapper; the costs are the same.
  • Most people can lend tax free outside an IFISA in ordinary P2P lending accounts anyway.

The £20,000 limit is subject to change by the government, but it doesn't change often. It's the limit until at least the 5th April, 2025. It will either stay the same or rise after that point; there is no political will to reduce the limit.

That's a brief summary. Now we're going to list the available IFISAs for you and then tell you precisely how these IFISAs work, and what the full benefits, risks and costs are.

Where can I compare IFISAs?

You can compare peer-to-peer lending IFISAs, including the risks and features, and drill down into lots of details, using our IFISA comparison service.

This service is full of all IFISAs for which we have been provided enough information about risks, and 4thWay's website users like yourselves ensure the listings are impartial.

What IFISAs are available right now?

The following table lists all the P2P lending sites that already offer Innovative Finance Individual Savings Accounts. (Now you know why we just call them IFISAs.)

Some IFISAs are not peer-to-peer lending and contain an extra risk of your money being diverted to pay the IFISA provider's own debts, so those are excluded from this list.

IFISA provider In 4thWay comparison table
(because enough info on the risks is provided**)
Abundance No
Assetz Exchange*
CapitalRise* Yes
CapitalStackers* Yes
Crowd2Fund Yes
Crowd for Angels  No
CrowdProperty Yes
Crowdstacker No
Downing Crowd Yes
easyMoney No
Elfin Market No
Folk2Folk (see table footnote) No
Fund Ourselves (previously Welendus) No
Guarantor My Loan
HNW Lending* (see table footnote) Yes
Invest & Fund* Yes
JustUs (previously eMoneyUnion) No
Kuflink* Yes
LandlordInvest No
Lendwise* Yes
Loanpad* Yes
Money&Co. No
Proplend* Yes
Rebuildingsociety Yes
Relendex Yes
Shojin No
Simple Crowdfunding
Sourced Capital Yes
Triodos Bank No
Unbolted No

Note that HNW Lending requires you lend at least £10,000 per individual loan, so it's for wealthy people only. If you put £15,000 into your IFISA, you may lend as little as £5,000 per loan. You need to sign up and then contact HNW Lending to open an IFISA. Read about HNW Lending here.

Folk2Folk has a minimum lending amount of £20,000 per loan.

What are the benefits of lending through an IFISA?

The biggest benefit of an Innovative Finance ISA is that the lending interest you earn is always tax free. It remains tax free regardless of how much your pot of money grows over the years.

Bear in mind that, outside of an IFISA, most people won't pay tax anyway.

Basic-rate taxpayers have a £1,000 annual Savings Allowance on interest that they earn through peer-to-peer lending and savings accounts combined. So you'll usually need to lend well over £10,000 before you might start paying any income tax.

Higher-rate payers have a £500 allowance each.

This is particularly useful since each individual is only allowed to open one IFISA per year, but it is sensible to spread your money across several P2P sites early on.

You can read more about your personal allowances in our tax guide: How Is Peer-to-Peer Lending Taxed?

What other benefits are there of using an IFISA?

IFISAs also enable you to avoid being taxed on any “capital gains” you make.

Capital gains taxes aren't so common in peer-to-peer, but they can happen.

Another benefit of IFISAs is that you're saved from having to report your peer-to-peer earnings to the taxman. You don't have to declare it anywhere.

You don’t need to declare any ISA interest, income or capital gains to HM Revenue & Customs. When lending outside of an IFISA, you may have to do so.

What are the IFISA limits?

Every adult can put in up to £20,000 in an IFISA this tax year.

The annual allowance is shared between all your ISAs, so if you also contribute to a cash ISA and a stocks and shares ISA, you have to decide how you'll split this year's ISA limit.

It doesn't matter how much this money grows after that, even if it grows to £100,000 or more. The total amount you can earn is uncapped and untaxed, and you may keep your IFISAs for life, if you want.

Rather than opening a second IFISA in the following tax year, P2P lending sites are allowed to let you add new money to the same IFISA instead. If that is what you want, you can't then put new money into a different IFISA as well.

You can also transfer in or out cash from cash ISAs or stocks and shares ISAs, but more on that later.

You may continue to open and hold as many normal (non-IFISA) P2P lending accounts as you want.

It's the amount of money you deposit into the IFISA in the tax year that counts, even if you're unable to get the money out on loan before the new tax year starts.

Double your allowances if you're married

Married couples and civil partners can open double the accounts to increase their thresholds and to make it easier to spread your money across more IFISAs, lowering the risks.

Which takes me to my next point…

You can open multiple IFISAs in the same tax year!

The ISA rules are frequently misunderstood. Many people believe you're allowed to open just one of each ISA in a tax year, which runs from 6th April to the 5th April the following year.


You can open as many ISAs as you like, simultaneously.

You can transfer money from cash ISAs, shares ISAs and IFISAs that you contributed in previous tax years into any number of new IFISAs that you like.

That includes any gains you made on money that was contributed in previous tax years.

Some ISA providers allow you to partially transfer funds you contributed in previous years and IFISA providers usually allow you to transfer in partial transfers. This means that if you have, say, £30,000 in a cash ISA prior to 6th April this year, you could open six new IFISAs right now and put £5,000 in each of them. Instant diversification!

More in How To Lend Across Multiple IFISAs In One Year!

You can't put new contributions in multiple IFISAs

So why do so many people think you can't open more than one Innovative Finance ISA? It's all because of another rule:

You're not allowed to split new contributions that you make this year into more than one IFISA. If you want to move £3,000 from your bank account into an IFISA – new contributions this tax year – it all has to go into one IFISA. If you transfer that to another IFISA in the same tax year, it all has to be moved to the new IFISA.

If you want to split that money into different IFISAs, you have to wait until 6th April comes along again.

What is the deadline for opening an IFISA?

The deadline for getting an IFISA open for a tax year is the 5th April, but some IFISA providers state that you have to apply earlier to meet their own deadlines. Often this is five days in advance, but perhaps you should apply to open your IFISA weeks before the 5th April to be on the safe side.

How do IFISAs compare to ordinary peer-to-peer lending accounts?

Most of this has already been covered in the different sections above, but this table gives you a quick and easy comparison of the key differences between IFISAs and normal peer-to-peer lending accounts:

IFISA Ordinary P2P lending account
Your gains are always tax free. At least the first £1,000 of interest earned each tax year by basic-rate taxpayers (in all lending accounts, bank accounts and savings accounts combined) is tax free. You probably have to lend well over £10,000 before you can expect to earn that much interest.

For higher-rate payers, the tax-free interest is capped at £500.

Additional rate payers have no tax-free allowance and non taxpayers pay no tax anyway.

You can contribute a maximum of £20,000 of new money into one IFISA per tax year.

This limit is split between all the ISAs you open this year, including cash and share ISAs.

You can also transfer in money from other cash and share ISAs, as well as IFISAs that you hold from previous years.

There are no legal caps regarding the amount you can lend in ordinary P2P lending accounts.

And you can more easily open as many as you want to spread your money and lower your risks further.

IFISAs have a fair bit of paperwork and procedure to open or to move money around with. Ordinary lending accounts are relatively less time-intensive to open and operate.
IFISAs are automatically tax-free and you don't ever need to report on your gains to the taxman. For ordinary lending accounts, you might sometimes have to report taxes to the taxman or share other information, such as how interest and taxes are split when you have any joint accounts with your spouse or civil partner.
Some IFISAs are not peer-to-peer lending, which increases the risks if the IFISA provider fails. These are not listed on 4thWay. Peer-to-peer lending is always peer-to-peer lending.

Do I have to pay inheritance tax on IFISA money?

You don't usually have to pay inheritance tax on pensions you inherit. Alas, this is not the case with IFISAs – like all ISAs – although allowances mean most people still won't pay inheritance tax.

On your death, the ISA wrapper falls away and any income or capital gains made on that wealth is now subject to tax.

Your spouse will be allowed a one-off increase in their ISA limits, so that they can transfer your ISA wealth into ISAs of their own.

If inheritance is going to a person or to people other than your spouse, they will pay inheritance tax on amounts above the inheritance-tax threshold.

Inheritance tax affects those who have more than £325,000 in wealth that isn't being transferred to your spouse. Married couples can have double the allowance.

When adding on additional allowances for passing on your own home, it can ultimately reach £500,000 tax free, or £1 million for married couples.

Can I move my money from regular P2P lending accounts to IFISAs?

You have to sell your existing P2P loans, changing them into cash, before you then pay the cash into the IFISA. So you can't just transfer your existing P2P loans into an Innovative Finance ISA.

How can I transfer money between ISAs of all types, including IFISAs?

You can transfer between IFISAs. You can also transfer from or to cash ISAs, or from or to stocks and shares ISAs. You can transfer between ISAs as often as you like.

To transfer between any ISAs, don't withdraw your money first or you could lose your allowance (although read about “flexible ISAs” below). Instead, complete a transfer form provided by the IFISA provider you want to move to.

Transfers between ISAs of existing funds that you contributed in previous tax years don't affect your ISA allowance for the year. You can transfer as much as you want with no legal limit, although some P2P lending sites might choose to set their own limits.

What we mean is, if you have put in £20,000 a year for several years into one or more IFISAs, and you have earned a lot of interest on your loans, you could end up transferring hundreds of thousands of pounds from one IFISA to another. This is fine. The annual limit only applies to new money going into the IFISA in that tax year.

You have to do transfers in cash, so you have to sell any investments or loans before transferring, or you have to wait for loans to be repaid first.

When transferring, you can move all or part of your money from previous years. However, if transferring away from any ISA that contains some of your current year's allowance, you must transfer the whole amount.

When transferring from other ISAs, the ISA provider you're leaving might charge you for transferring out.

IFISA transfers are supposed to be completed within 30 days. If it takes longer and you're not happy with the explanation, you can complain to the Financial Ombudsman Service, which has the power to force the transferring company to compensate you.

See more in our 11 scenarios below to find your specific transfer or contribution situation.

Can I switch IFISAs mid-year?

Scenario 1: You have contributed new money this tax year to a new IFISA you just opened and now you want to open another new IFISA and transfer those new contributions to it, all within the same tax year.

You're allowed to do that, but you have to transfer all of the contributions, so that only one IFISA in a tax year contains new IFISA contributions. You can also then continue to contribute more into that same IFISA if you haven't reached your overall contribution limit yet.

Scenario 2: You made new contributions this tax year to an existing IFISA (that you opened in a previous tax year), but now you want to open a new IFISA.

You may still open a new IFISA for new contributions if you now transfer all the new contributions that you have already made this year from the existing IFISA to the new one. You can then continue to add more new contributions in the new one if you have not reached your total annual ISA limit.

You do not have to transfer the existing contributions that you made in previous tax years from the existing IFISA to the new one.

Scenario 3: You have contributed new money this tax year to a new IFISA and now you want to transfer it to an old IFISA that you opened in a previous tax year.

You are allowed to do that, but you have to transfer all the new contributions and now you can only add further new contributions in that same Innovative Finance ISA.

How do I transfer money from previous IFISA years?

Scenario 4: You want to transfer existing IFISA money (from previous tax years) to a new IFISA.

You can do this without affecting your ISA limits, meaning if you've already opened a new IFISA for new contributions this tax year, that doesn't stop you for opening another new IFISA solely for transferring existing IFISA money. Or you could transfer it to the same new IFISA where you're adding your new contributions for the year.

Technically, you are allowed to transfer either all or part of your existing IFISA money from previous tax years over to the new IFISA. However, you might find that some IFISA providers set their own rules and limits on that.

Scenario 5: You want to transfer existing IFISA money to another existing IFISA.

You can transfer all or part of your money in this way between your IFISAs.

How do I do an IFISA transfer from or to cash ISAs?

Scenario 6: You want to transfer old money from a cash ISA to an existing or new IFISA.

You're allowed to do this without limit.

Scenario 7:  You want to transfer newly contributed money from a cash ISA to an existing IFISA.

You may do that, but you're only allowed new contributions in one IFISA per year, so this has to go where the rest of your IFISA contributions are going this year.

Scenario 8: You want to transfer newly contributed money from a cash ISA to a new IFISA.

As with scenario 7, you may do that, but you are only allowed new contributions in one IFISA per year, so this has to go where the rest of your IFISA contributions are going this year.

How do I do an IFISA transfer from or to stocks and shares ISAs?

You must sell any investments in your stocks and shares ISA before you can transfer to an IFISA, with the transfer being in cash.

Scenario 9: You want to transfer old money from a shares ISA to an existing or new IFISA.

You are allowed to do this without limit.

Scenario 10:  You want to transfer newly contributed money from a shares ISA to an existing IFISA.

You may do that, but you're only allowed new contributions in one IFISA per year, so this has to go where the rest of your IFISA contributions are going this year.

Scenario 11: You want to transfer newly contributed money from a shares ISA to a new IFISA.

As with scenario 10, you may do that, but you're only allowed new contributions in one IFISA per year, so this has to go where the rest of your IFISA contributions are going this year.

Can I transfer out loan parts that I am unable to sell?

To transfer from one Innovative Finance ISA to another, you have to wait until the loans are repaid or you have to sell your loan parts early.

However, if you're unable to sell some loan parts when you transfer to another IFISA, you won't be able to transfer those loan parts.

If you're transferring your new IFISA contributions in the same tax year (which you can do if you transfer the entire pot), and the IFISA you're leaving is left with loan parts you can't sell, those loan parts will no longer be automatically tax free, unless they're covered by your annual Savings Allowance of £1,000 – which is very likely for most people.

If it's any consolation (maybe), most loan parts that are hard to sell are loans that have gone bad, so for those loan parts you might not have expected to earn any interest anyway – taxed or otherwise.

How do I withdraw money from an IFISA?

You can withdraw money from your IFISA at any time, subject to the normal rules each peer-to-peer lending website has about selling loans and exiting early.

If you withdraw money in the same year you put it in, you will usually lose that part of your ISA allowance for the year…

What is a flexible IFISA?

However, your IFISA provider will tell you if it's a “flexible” ISA. This means that you can withdraw cash from your IFISA and then replace it in the same tax year.

Replacing that amount won't count towards your annual ISA allowance. If you don't replace it within the same tax year, i.e. between 6th April one year and 5th April the next, you will lose that part of your allowance for that year.

However, if you withdraw your new contributions from a flexible ISA and then open another new ISA the same year and pay it into that, you will still lose your ISA allowance on the amount you withdrew.

For non-flexible ISAs, if you put in £10,000, then withdraw £5,000, you can only contribute an extra £10,000 in the same tax year. In other words, the withdrawn money still counts towards your total limit for the tax year.

Do IFISAs cost extra?

Most P2P lending platforms don't charge lenders extra for buying, selling and holding loans through your Innovative Finance ISA. However, some will charge you for transferring out.

You'll be able to lend as normal, in the same way as you have been outside of the ISA.

The rare exceptions that charge extra take between 0.5% and 1.5% more for IFISA lending.

What is the minimum I can lend through an IFISA?

Most P2P lending sites are using the same minimum lending amounts for their IFISA products as they do for their other lending accounts. This is typically between £1 and £100, although £500 is also fairly common, although a minimum of £1,000, £5,000 and even £10,000 happens sometimes.

What are the risks of using IFISAs?

The risks of using IFISAs for your P2P lending are fairly small:

  • You don't know if the costs will change after you move your money in. (You have a right to leave without exit charges in that case, provided you let the ISA provider know swiftly. If they try to charge you, get the powerful Financial Ombudsman Service to put it right for you.)
  • Laws and taxes regarding ISAs might change out of your favour. However, since you can get your money out of ISAs relatively easily, you might still have a chance to pull out before a negative change takes effect.
The usual risks of P2P lending also apply. For more on that, read Is Peer-to-Peer Lending Safe For Lenders? and The 13 Key Peer-To-Peer Lending Risks.

Where can I open an IFISA?

Most peer-to-peer lending sites are providing Innovative Finance ISAs directly to you from their own websites.

You will be able to see all of the IFISAs in the list of IFISAs near the top of this guide and we link to them in our comparison tables too.

Can I open an IFISA if I live overseas?

You can only open an IFISA if you are a UK resident.

Also, you can only put new money into existing ISAs if you are a UK resident.

This was part nine of our ten-page P2P lending guide

Read part eight: How Is Peer-to-Peer Lending Taxed?

Read part ten: How One Lender Is Losing Money – A Lesson In P2P Lending Diversification.

See the contents of the whole 10-part guide.

Read more

Switching IFISAs When Lending Is Too Slow.

Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.

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