Including peer-to-peer lending in Isas should prove a positive boost for small firms hit by the current bank lending “vacuum”, say advisers.
The Treasury has confirmed it is in the early stages of how P2P lending sites, which will become regulated by the FCA from next April, could be included in the tax-free regime.
From last month, investors have been allowed to include Aim-listed stocks in their Isas
A spokesman from P2P website Funding Circle says: “We know that lenders would be keen for peer-to-peer lending to be included within Isas. If you think about the inclusion of AIM shares in Isas, essentially indiviudals are already lending to businesses anyway.”
Investment Quorum executive director Lee Robertson says: “I think the type of people that will be attracted to P2P lending in Isas may well have already been involved in P2P as a lender, so they will be aware of the risks.
“We should see this as a positive move to fill the lending vacuum left by the banks.”
However, Worldwide Financial Planning Nick McBreen says P2P lending is likely to carry a “much higher risk profile” than many investors would usually hold in their Isa.
He adds “HMRC can allow an asset to be included in an Isa but this doesn’t necessarily make it a suitable asset for a private client.”