Portfolio Service Has Property And Inheritance Tax Benefits - Plus Loan Latest
Money&Co. recently launched Money&Co. Portfolio, which allows lenders to lend through a managed ISA, a managed portfolio or a lending vehicle (designed to help mitigate inheritance tax). The ISA and the lending vehicle make use of tax reliefs and so it is particularly important that we make every effort to preserve capital. For these products, we will only include asset-backed loans. Any investment involves risk, but by investing in asset-backed loans, we can provide a high degree of protection.
Loans from property-backed Seascape (currently we are offering number 12 in the series) are proving popular. The latest A-rated tranche yields 8 per cent gross, at a fixed rate for five years. This £250,000 tranche is 64 per cent funded at the time of writing.Bearing in mind that while there is no profit without risk, our lenders have achieved a return of over 8 per cent (7 per cent after our one per cent charge) with over £14 million in loans facilitated.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (ISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income.
A Process Guide To Innovative Finance ISA Investment
Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.So here's our guide to the process:
Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
Step 3: Buy loans in the loan market. Once you've put cash in your account it will sit there - and it won't earn interest until you've bought a piece of a loan. It's this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans - all loans on the Money&Co. site can be held in an IFISA - and your money will start earning tax-free interest.
The ISA allowance for 2018/19 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We're assuming a 7 per cent return, net of charges and free of tax here.Once you have made your initial commitment, you might then consider diversifying - buying a spread of loans. To do this, you can go into the "loans for sale" market. All loans bought in this market also qualify for IFISA tax benefits.