We had heard whispers of this... Her Majesty's Treasury has announced that as of July 1st, 2014 peer-to-peer lending is being given tax discounts for the first time in UK history. The radical reformation will take place within the Individual Savings Account (ISA) system.
The annual investment allowance limit has been raised from £5,760 (cash ISA) and £11,420 (stocks and shares ISA) to £15,000 in the form of cash ISA, without lenders having to pay tax on their capital gains. This scheme will be known as the New ISA (NISA).
Time to start a UK based P2P site?
This provides an opportunity for around half of UK adult ISA holders to have greater provisions on how they determine to save and invest. Approximately 5 million people will benefit from the allowance increase as they are already investing at the £5,760 limit. The NISA reform will expect a sharp rise in investors joining the game on peer-to-peer lending platforms. Therefore, peer-to-peer platforms may expect accelerated growth within the industry and must thereby adjust their capacity to cope with high volumes of lending.