For experienced investors looking to maximise returns through the ever-popular ISA tax wrapper – which renders all returns free from both income and capital gains tax – it’s often possible to invest into property bonds via the Innovative Finance ISA (IFISA).
Introduced to the ISA market in April 2016, the IFISA was launched to strengthen and accelerate the UK’s booming alternative investment sector, allowing investors to hold peer-to-peer loans and debt-based securities under the ISA wrapper for the first time.
Though the Cash ISA and Stocks and Shares ISA have been staples in many investor’s portfolios since they were established, current all-time low interest rates and a particularly volatile equities market have experienced investors searching for assets uncorrelated with both.
And when investing into property bonds via an IFISA, experienced investors benefit from not only property bonds’ potential returns of between an inflation-beating 4% and 8%, but also significant tax savings that can be advantageous for higher and additional-rate taxpayers in particular.
Like other members of the ISA family, the IFISA is governed by the annual ISA allowance – which stands at £20,000 in 2022/23. However, experienced investors who have already subscribed their full allowance for the tax year could still invest into property bonds via the tax-efficient IFISA by utilising the ISA transfer process.
CARLTON Bonds are an IFISA provider specialising in fixed-term property bonds.
Against a backdrop of low interest rates and a volatile stock market, the IFISA can provide an attractive investment opportunity for experienced investors.
The property-backed IFISA has the potential to generate higher rates of return than more traditional investment routes for investors with a greater appetite for risk.
To find out more about property bonds, .