21st March 2023
Why should we support entrepreneurs? We think that everyone should support entrepreneurs, they’re the lifeblood of the economy and are responsible for the creation of new products and services for us. IFISAs provide an excellent opportunity to invest in growing businesses that you believe in while potentially earning high returns on your personal portfolio.
Take advantage of tax breaks
Investing in an IFISA allows funds to grow tax-free because they are held in the tax-free wrapper of an ISA. This means that interest repayments are not liable to income tax, which is 20% for basic-rate taxpayers on non-ISA interest in excess of £1,000.
Also, no income tax is due on IFISA funds when they are withdrawn. This is one of the reasons why the IFISA is such an appealing investment vehicle for long-term earnings. Furthermore, while IFISAs can constitute part of an estate for inheritance tax purposes, they can also be handed on to a spouse without paying any related tax.
Use the full allowance
Each year, HMRC establishes a tax-free savings allowance that can be spread across all ISAs. The current allowance is £20,000 per year. This allowance is not transferable between years; any unused allowance is forfeited as the current tax year begins. To protect as much of their savings from tax as possible, investors normally aim to use their entire limit, or as much as possible, before the 5th of April in any tax year. If you have used up your full allowance and are married, remember that you can use your spouse's allowance to prevent paying income tax on up to £40,000 every year.
Transfer historic lower-yielding ISAs
While the yearly allowance for new investments cannot be transferred, past ISAs can be transferred into Crowd2Fund's IFISA — or any IFISA of your choosing. This is especially important for Cash ISA holders, because even the best performing quick access APR Cash ISAs now yield a return of roughly 1% - 3% - yet again, cash and investments are substantially different in terms of risk.
Peer-to-peer loans under an IFISA are one of several choices available to investors wishing to improve profits above the 1% -3% Cash ISA APR, as has been the case for almost a decade. By downloading and filling out a form, you can easily transfer cash ISAs to the Crowd2Fund platform.
Reinvest and benefit from compound interest
You will get monthly payments if you are a Crowd2Fund IFISA investor. This money can be redeployed into new investing possibilities. This means you'll keep receiving interest on your earnings, which may multiply rapidly over time. To increase returns even further, you can reinvest your repayments on a monthly basis into a specific business, providing you are lending £100 or more. If your monthly repayments are lower than this, you may use Crowd2Fund's Smart-Invest function, which automatically reinvests your repayments in live investment opportunities that match your risk profile, spreading your risk and diversifying your portfolio.
Diversify your portfolio with The Exchange
Spreading your risk is an essential tool for managing the inevitable element of risk that comes with any investment. Diversifying your portfolio across several companies and sectors decreases your exposure to any single business risk. This means that if one loan fails, you will have plenty of others to fall back on.
In addition to the primary investment options offered on the site, investors may use the Crowd2Fund Exchange to purchase existing loans from other investors, increasing the range of possible investments. Some investors who sell their loans may be able to earn by selling at a higher rate for well-performing loans. Crowd2Fund is also the first IFISA on the market that allows you to choose which businesses to support rather than maintaining a pooled fund. Investors can personally assess and choose the companies and organisations they want to lend money to.
So, why should we support entrepreneurs? Well... just hop on over to our success stories.
To get started: Download our app and register for free, or email us here.
Past performance and forecasts are not reliable indicators of future results. Tax treatment of any of the investment offers will depend on the individual circumstances of each investor and may be subject to change in the future. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser. Do not invest more than you can afford to lose. Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Investing in start-ups may expose the individual concerned to a significant risk of losing all of the money or other assets invested. Peer-to-business lending through Crowd2Fund is not the same as holding a bank or building society savings account. When making a peer-to-business loan, your capital lent to a borrower is not covered for compensation in the event of a loss by the Financial Services Compensation Scheme. It may prove impossible to recover all or part of the loan by calling in the business assets held as security on that loan. Reward and Donation funding types are not regulated by the Financial Conduct Authority Crowd2Fund Limited is authorised and regulated by the Financial Conduct Authority (FRN 623683). Crowd2Fund Limited is registered in England and Wales. Registered No. 08472687 Registered Address: 242 Acklam Road, London, W10 5JJ.
Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.