Innovative Finance ISA

The 5 Craziest Things you can Invest in via an IFISA

It has been just two years since the arrival of the Innovative Finance ISA (IFISA), and the majority of the UK’s peer-to-peer platforms are now able to offer tax-free returns on their loans.

But as the market opens up, lenders are being offered more choice than ever before. IFISA holders are no longer restricted to investments in consumer loans or properties.

Now, they can earn double-digit tax-free returns by investing in a range of innovative projects and unexpected assets.

Here are just a few of the craziest things you can invest in via an IFISA – from lawsuits to yachts.

Earlier this year, P2P sports platform Tifosy announced plans to launch its first IFISA which will allow investors to help fund Premier League clubs such as Fulham and Crystal Palace by investing in mini-bonds. Tifosy helps British and European teams raise new capital, while giving fans an opportunity to earn tax-free returns while supporting their favourite club. In some cases, investors can even claim ‘benefits’ such as a tour of the club grounds, and all-inclusive trips to away games.

This is not the first time an IFISA provider has associated itself with football. Property lender Kuflink is a key sponsor of Ebbsfleet United, while direct lender Basset & Gold is West Ham’s Official Investment Partner for the 2018/19 football season.

Yachts

Even the uber-wealthy sometimes need to free up some cash, and P2P lender FundingSecure has carved out a niche by offering loans against canal barges, schooners, power boats and yachts.

However, due to the riskier nature of boats and yachts, there are some restrictions in place. The platform will only lend up to 50 per cent of the boat’s total value, and – for obvious reasons – the vessel’s owner is profiteered from travelling too far with it.

Lawsuits

High net worth investors have been quietly investing in lawsuits for years – and with good reason. A well-funded cases has a better chance of winning, and investors can net a healthy profit from any settlement or pay-out.

So it is no surprise that the first ‘lawsuit IFISA’ was launched at the end of September 2018. The brainchild of a former Merrill Lynch executive Rob Rutter, IFISA provider Just is offering investors up to eight per cent in interest by investing in a range of hand-picked lawsuits through a five-year bond.

Rutter claims that the platform will only consider lawsuits by those “who may have been wronged by banks, institutions or individuals”.

Classic cars

Since it was launched in 2014, HNW Lending has pitched itself as a P2P platform for the ultra-rich. This means that investments come with a £5,000 minimum, while loans range from fine wine collections to classic cars.

Previous loans have included £100,000 secured against a customised Mercedes Maybach, and a £50,000 loan against two classic stunt planes.

Since receiving its IFISA licence in 2017, HNW Lending has been able to offer its investors tax-free returns between eight and 15 per cent, depending on the loan.

Community gardens

Ethex is one of the up-and-coming IFISA providers who focus on ethical and socially responsible investments. Earlier this year, it announced an IFISA-ready Energy Garden Community Bond which will help to fund a series of community gardens across London.

Investors can make tax-free returns of four per cent, while also having the satisfaction of knowing that their money is helping to make London’s city air a little bit cleaner.

Aircraft

Asset-backed lender Ablrate has been a pioneer in the field of P2P aviation loans. It was responsible for funding the largest ever P2P loan for an aircraft in 2016, when it loaned £1.85mn against an ATR 42-500 aircraft valued at £3.3m. After six months, the loan completed and investors walked away with 13 per cent in interest.

Since then, Ablrate has continued to invest in the aviation industry, but now prospective lenders can invest via an IFISA.

 

Originally Published: Monday, December 24th, 2018
Updated: Friday, December 21st, 2018

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