Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
If you are interested in learning more about how to protect yourself, visit the FCA’s website here.
For further information about investment-based crowdfunding, visit the FCA’s website here.
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Blog
- 27 September 2024
When you save or invest, any income or growth can be subject to tax. The amount will vary depending on your personal situation, but it can be as much as 45% on income and 28% on any growth.
When you shelter your savings and investments in an ISA there isn’t any tax to pay. As the tax breaks are so generous, there are limits on how much you can shelter in ISAs each tax year. Currently you can put away up to £20,000, and in using your ISA allowance every tax year you can build a substantial tax-efficient portfolio of savings and investments. There are even people with ISA portfolios worth over £1,000,000.
So, what’s changed?
In the 2023 Autumn Statement former Chancellor Jeremy Hunt announced a number of important changes to simplify ISAs, which came into effect in April this year.
Allow multiple subscriptions to ISAs of the same type
Under the previous rules, you could only pay into one of each type of ISA each tax year. For example, if you paid into a Triodos Stocks and Shares ISA this tax year, you couldn’t pay into one with another provider in the same tax year. This means that ISA savers and investors had to think very carefully before choosing a provider.
It’s now possible to pay into ISAs of the same type with different providers within the same tax year. These welcome changes will mean that savers and investors don’t have to commit to one ISA provider for each ISA type each tax year.
This opens the way for investors to take advantage of opportunities when they arise. For example, say you’ve already opened an instant access cash ISA for the current tax year, but then saw a good fixed-rate cash ISA with a different provider, you could open the second one in the same tax year without breaking the rules.
Allow partial transfers of current year ISA subscriptions between providers
It’s possible to transfer ISAs from one provider to another, and between different ISA types. Under previous rules if you wanted to transfer some of a current tax year ISA subscriptions, you’d be required to transfer the whole lot. For example, let’s say you paid £20,000 into a cash ISA this tax year, but then saw an investment opportunity in an Innovative Finance ISA with a different provider. You wouldn’t be able to move just a portion of it, you’d need to transfer the full £20,000.
This was restrictive for savers and investors; once they’ve paid funds into an ISA, those subscriptions were committed for that tax year unless they want to transfer the whole amount.
These changes give more flexibility and give account holders the option to move some of their current ISA subscriptions around depending on their situation, what opportunities arise, and what’s best for their financial planning.
Widen the scope of investments permitted within ISAs
Innovative Finance ISAs allow for tax-efficient investments into peer-to-peer lending and crowdfunding ventures. By lending money directly to organisations, you could make a real impact on the organisation and earn a higher rate of interest or dividends if the organisation you invest in does well. However, this is a high-risk investment as start-up businesses can fail and investors could lose the money they put in.
From 6 April 2024, there has been a greater range of permitted investments that can be held within an Innovative Finance ISA. For example, it will be possible to invest in “long-term asset funds”, like property and infrastructure projects, and open-ended property funds with extended notice periods. Please note, these are not currently available within the Triodos Innovative Finance ISA.
Keep in mind that ISA eligibility does not reduce the risks associated with the investment nor guarantee returns. It is possible to lose all of the money invested. As with all ISAs, there are eligibility requirements for the IFISA.
The Triodos ISA family
We currently offer all three main ISA types:
- Cash ISA – for those who want to earn tax-free interest on their ethical savings
- Stocks and Shares ISA – for those who are happy to take some risk and want to receive tax-free income and growth on our impact investment funds
- Innovative Finance ISA – for those who are considering higher risk Crowd Funding offers and want to receive any returns tax-free
The sooner you open your ISA, the sooner you can start saving tax. If you’ve been thinking about applying for an ISA, why not get started today?
Investments offered on this platform are not readily
realisable, which means that they may be difficult to sell and you may not get
back the full amount invested. Investments are not covered by the Financial
Services Compensation Scheme (FSCS) and your capital is at risk and returns are
not guaranteed. Repayment of capital and interest or payment of dividends will
be dependent on the success of the organisation's business model and past performance isn’t a
reliable indicator of future performance. You should
always read the offer document in full before deciding whether or not to invest as it
will cover risks specific to an individual investment. You can read more about
the general risks associated with making these types of investments. If
you are unsure if any of these investments are right for you, you should
contact an Independent Financial Adviser.
Triodos Bank UK Ltd. Registered Office: Deanery Road, Bristol, BS1 5AS. Registered in England and Wales No. 11379025. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 817008.