by: Grow VC Group
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The UK Treasury published the results and conclusions of the public consultation on whether to extend the list of ISA-eligible investments to include crowdfunded debt securities and equity. As a result, the Treasury has decided that debt securities made available via crowdfunding platforms will be eligible for ISAs, while for online equity investments the authority opted to keep working with sector’s stakeholders to further explore this possibility.

ISAs stand for Individual Savings Account and are a class of retail investment arrangements available to residents of the United Kingdom, subject to a favourable tax status. As part of government’s commitment to increase the choice of investments available to ISA investors and to improve competition in the banking sector, the UK Treasury wanted to evaluate if the growing crowdfunding sector could be part of the ISA scheme.

Therefore, a consultation on ISAs for crowdfunded debt and equity securities was launched back in March and saw the participation of several actors active in the sector. In particular, respondents were invited to provide insights on whether crowdfunding investments respect the following principles:

  • are consistent with ISA’s reputation as a trusted savings brand
  • protect the consumer
  • support a sustainable tax system
  • are simple to administer.

In general, although many respondents did not see many differences between crowdfunded equity and debt securities and believed that the current legislation, requiring registration with FCA, is strong enough to guarantee a sustainable development of the sector, several others thought that equity crowdfunding poses higher risks than online lending. The main justification was that the equity crowdfunding market tends to cater for riskier businesses and is less likely to provide individuals with regular returns on their investment.

Nevertheless, the UK Treasury concluded that it prefers to wait that the equity crowdfunding market matures further, while closely collaborating with the interested parties to explore the possibility of introducing ISAs for crowdfunded equity investments. With regards to debt securities, instead, the Treasury stated that it will legislate in autumn 2016 to allow certain debt securities issued by companies and offered via a crowdfunding platform to be held the ISA.

This is certainly a big step for the UK crowdfunding sector and once again a strong signal of the local government’s intention to support it.

Read the whole article on Crowd Valley Blog.

UK HM Treasury


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Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

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This entry was posted on Wednesday, December 9th, 2015 at 9:00 am and is filed under Business Updates. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.