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HMRC Confirms You Can Open Multiple IFISAs In One Year!

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By on 11 February, 2021 | Read more by this author

We told HMRC that, reading the rules for ISAs, “they don't actually prohibit people opening multiple IFISAs in one tax year, provided they only subscribe new money to one of them”… Do they?

A representative from HMRC has told us this “looks correct”. That's about as definitive as it gets from HMRC, which is often much more cagey than that when giving out guidance!

This is massive for IFISA investors!

At 4thWay, we're not into italicising big adjectives (massive) without good cause.

But this is truly a very important point that most lenders still do not understand, for which we now have official confirmation after years of interpreting the Innovative Finance ISA rules for you for ourselves in How To Lend Across Multiple IFISAs In One Year!

Contrary to interpretations you read in the press or anywhere else, lenders may open more than one IFISA in a tax year. You may transfer into those IFISAs as much as you want from other IFISAs, cash ISAs or share ISAs, so long as it is all money from prior tax years, or gains on money you put in during those prior years.

The restriction is that new money you put in after 6th April has to all be kept together in a single IFISA until the following tax year. (You're even allowed to move new money during the tax year to another ISA, either a new or old one, provided it all is kept in one place until the 6th of April comes round again.)

Rapid IFISA diversification is therefore just a few weeks away

While you might be sad that the £20,000 annual ISA cap still stands, the fact that you can easily, and sensibly, spread your money across many IFISAs is very valuable indeed for IFISA lenders.

4thWay has previously estimated that the risk of losing money overall when lending across a large number of loans in six or more 4thWay PLUS-Rated lending accounts or IFISAs is considerably closer to 0% than 1%, even during a major recession and property crash. This assumes you hold onto your loans until the last one is fully repaid, without trying to sell early. The calculations and data supporting this has only solidified further over the past few years.

The confirmation from HMRC just emphasises that we can do this easily within IFISAs. You're not required to open ordinary P2P lending accounts if you don't want to.

The most important part is whether your existing cash ISA, shares ISA and IFISA providers allow you to transfer out part of your cash, so that you can split it among several other IFISAs. More on that in our main guide on multiple IFISAs, where there's also a brief example near the end.

Read more:

How To Lend Across Multiple IFISAs In One Year!

Best Innovative Finance ISAs In 2021.

15 Years Of Profitable P2P lending And Beating The Stock Market.

The Peer-To-Peer IFISA Guide.

Compare IFISAs.

Best Innovative Finance ISAs.

The author is not a lawyer or tax specialist and 4thWay's content does not constitute advice.

Independent opinion: the opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.

All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

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Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Orchard’s interest rates different?

Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×
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