Glossary · UK
What is Innovative Finance ISA (IFISA)?
An ISA wrapper for peer-to-peer loans and other alternative finance investments.
Full Definition
An Innovative Finance ISA (IFISA) is one of the ISA types within the overall £20,000 annual ISA allowance, used to hold peer-to-peer loans, crowdfunding debt securities and similar alternative finance investments free of Income Tax and Capital Gains Tax. Unlike Cash ISAs, money held in an IFISA is not covered by the Financial Services Compensation Scheme in the same way — if a borrower defaults or a platform fails, investors can lose capital, so IFISAs carry materially more risk than Cash ISAs for potentially higher returns.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.