Investing in your ISA and annual limits
You can subscribe up to £20,000 into ISAs in the current tax year 2019/20. This is referred to as the “Annual ISA Limit”. The annual ISA limit may change for future tax years.
You can put your entire annual ISA limit into any of the three categories of ISA (cash ISA, stocks and shares ISA and Innovative Finance ISA) or spread this amongst all three (in any amounts you prefer); provided that:
> You do not exceed the annual ISA limit; and
> You do not subscribe to more than one cash ISA, more than one stocks and shares ISA, or more than one innovative finance ISA in the same tax year
Also, remember that the annual ISA limit is only relevant to funds subscribed in the current tax year. There is no limit to how much you can put into a Lending Works ISA in relation to funds subscribed in previous tax years.
What if I exceed the Annual ISA Limit?
It is your responsibility to ensure you do not exceed the annual ISA Limit in any tax year. For the current tax year this is £20,000. If you think you have exceeded the annual ISA Limit you must contact us immediately. You should also contact HM Revenue & Customs (HMRC) using the ISA helpline on 0300 200 3312 and flag that you have exceeded the limit. It is likely that you will be required to pay tax on the amount exceeded at the tax rate that applies to you. You could also be liable to a penalty or other fines by HMRC in relation to the breach.
What if I send you funds in excess of the Annual ISA Limit?
If you send us a payment of more than the annual ISA limit, or if you send us any payment which, when applied to your Lending Works ISA, would mean that your total current year subscriptions would exceed the overall annual ISA limit, we will place any excess into your Classic Account. You can then either withdraw that amount from your Classic Account using the process set out within your Lending Works account, or use that money to lend using your Classic Account.
But remember if you choose to re-invest repayments within your Classic Account, any such funds placed in your Classic Account as a result of over-funding your ISA may be placed on loan very quickly and you may not get the chance to withdraw them.
Can I make monthly payments to my Lending Works ISA?
Yes. You can make regular payments into your Lending Works ISA, provided your total monthly payments in the current tax year do not exceed the overall annual ISA limit of £20,000.
For example, instead of paying £20,000 of new ISA funds into your Lending Works ISA on 6 April 2019, you could instead make 12 monthly payments of £1,666.
How many times can I pay into my Lending Works ISA?
There is no limit to the number of payments you can make into your Lending Works ISA. However, the total value of those payments which relate to new subscriptions cannot exceed the overall annual ISA limit for the current tax year.
Does interest received on loans count towards the annual ISA limit?
No. The annual ISA limit (£20,000 for the current tax year) applies only in relation to funds you subscribe (add) to your ISA(s). Any interest or other income you receive on those funds will not impact your annual ISA limit.