The ThinCats ISA
You could earn tax-free returns with the ThinCats ISA
The ThinCats ISA is an Innovative Finance ISA (IFISA). IFISAs sit alongside Cash ISAs, Stocks & Shares ISAs and Lifetime ISAs as potential investments for your annual ISA allowance, which for the 2018/19 tax year is £20,000.
Holding your ThinCats investments within a ThinCats ISA enables you to earn returns free from income and capital gains tax. For ThinCats investors, the ability to receive tax-free interest payments is the main benefit of the ThinCats ISA.
Please note some important points about the ThinCats ISA and subscription process for the 2018/19 tax year.
- Only investors with a standard account with ThinCats are able to open a ThinCats ISA. If you are not already a ThinCats investor, you will need to open a standard account first before opening a ThinCats ISA.
- The ThinCats ISA can only accept new cash subscriptions only
- We will not be able to accept transfers of other existing ISAs or in specie transfers from existing ThinCats investments
- If you wish to fund your ISA from your existing ThinCats investments, you will need to sell loan parts from your standard account and use the cash proceeds to subscribe to a ThinCats ISA
- The regulations associated with ISAs mean that ThinCats ISA accounts will be set up as new accounts, separate from existing ThinCats standard accounts. You will be allocated a new username and password for your ThinCats ISA account along with a new payment reference.
If you already hold a standard account with ThinCats and would like to open a ThinCats ISA, read our simple guide.
Investors should note their capital is at risk and that investments are not covered by the Financial Services Compensation Scheme. Learn more about the risks.
Frequently Asked Questions
General ISA Qs
An Innovative Finance ISA allows individual investors using peer-to-peer lending platforms to receive tax-free returns. Every tax year investors have an annual ISA allowance which can be split across a Cash, Stocks and Shares, Lifetime and Innovative Finance ISA.
Please note that this tax treatment may change in future, and for advice on your own tax position please contact HMRC or an independent financial adviser.
Your capital is at risk with an Innovative Finance ISA. Unlike Cash ISAs, Innovative Finance ISAs are not covered by the Financial Services Compensation Scheme.
The tax year runs from 6th April one year to the 5th April the following year.
The annual ISA allowance may vary each tax year. The ISA allowance for 2018-19 tax year is £20,000.
You may wish to consult the government website for updates and changes to the annual ISA allowance.
You can have one of each type of ISA each tax year, so long as the total amount invested into your ISA is within the limit of the annual ISA allowance.
To subscribe to a ThinCats ISA, you will need to:
- Be 18 years old or over.
- Be a permanent UK resident.
- Not subscribe to another Innovative Finance ISA in the same tax year
Investors are only able to subscribe to one Innovative Finance ISA per tax year.
ThinCats ISA Qs
The ThinCats ISA is an Innovative Finance ISA that invests in business loans through the ThinCats peer-to-peer platform.
A new IFISA account must be set up, even if you have an existing ThinCats account. This means that you will have separate login details for each account type and you will have a different membership number and payment reference for when transferring in funds.
If you are already a ThinCats investor, you should login to your current standard account and click on the IFISA icon on your Home page to set up your ThinCats ISA account. Please note that you will be allocated a new username and password for your ThinCats ISA account. You will need your National Insurance Number to hand to complete the process.
If you have not invested with ThinCats before, you need to set up a standard account with ThinCats before setting up a ThinCats ISA account. To set up a standard account click here.
The minimum investment is £1,000. The maximum for the 2018/19 tax year is £20,000 depending on any other ISA investments that you make during this tax year.
There is no minimum period that you have to keep your IFISA in order to qualify for the tax relief but peer-to-peer loans tend to be over periods from 1 to 5 years and you need to take that commitment into account when making your investment decision. ThinCats operates a ‘secondary market’ to help those needing to get back to cash and at the same time providing an opportunity for those investors seeking to build a widely diversified portfolio faster. If you want to access your money before the end of the loan term you may sell your loan parts to other investors. We charge a 1% fee for selling on the secondary market. Not all loans are deemed suitable for sale on the secondary market for a range of reasons (such as missed payments). Also, due to the nature of the Secondary Market the price you will receive, and the ability to sell the loan will depend on the supply and demand at the time that you wish to sell your loan (that is, there need to be willing buyers of your loan).
You can withdraw any un-invested cash in your account, this will normally be processed within 3 working days upon request. Withdrawing funds already committed to loans depends on your ability to sell those loans on the secondary market and then transferring the cash.
The ThinCats ISA terms and conditions allow 14 days for a cancellation to be made.
The effect of a cancellation is that:
- The account is treated as never actually opened
- The investor is not subject to any income or capital gains taxation in the period between the account opening and the cancellation
If you have made subscriptions or investments during the 14-day cancellation period, you can still cancel the ISA even if loan parts have been purchased or are committed to. The latter simply move to the standard account.
Interest and capital repayments generated from the loans that are held within a ThinCats ISA do not count towards your ISA subscription limits.
To earn interest on your ThinCats ISA money you will need to invest in loans to businesses, via the ThinCats platform and hold these investments in your ISA account. Your money only earns interest when it is lent to a business.
The interest you earn depends on the rates you invest at, which is determined by the auction process. There are two types of auctions; fixed where the borrower offers a single fixed interest rate and the loan is filled on a first-come-first-served basis, and variable, where you get to set the interest rate you want to receive (within the terms of the loan), and the software automatically selects the lowest rates to make up the loan. The interest you receive will be tax-free.
You are able to transfer your IFISA to different providers subject to any rules and restrictions they impose. However, you are only permitted to transfer cash balances, not loans themselves. This means that in order to transfer funds out of your ThinCats account you will need to try to sell any remaining loans on the secondary market. This is not always possible, or may not happen immediately (see ‘How Can I Access My Money?’). Accordingly, you may not be able to transfer your IFISA as quickly as you wish, or in some cases at all.
You can transfer the whole or part of a previous year ISA. However, if you wish to transfer your current year IFISA, you must transfer the whole of it. There is a minimum of £5,000 or the account balance, whichever is the lower, for ThinCats to accept the transfer request from the new ISA manager.
It is important to note that you need to request such a transfer from your new ISA manager. You must not attempt to do the transfer yourself by withdrawing funds and investing them into a new ISA account as you may lose your existing IFISA.
No, we are not currently able to accept ISA Transfers into a ThinCats ISA.
No, the ISA regulations do not permit this.
It is important to understand that by investing through a ThinCats ISA your capital is at risk. You are making direct loans to corporate businesses, and if for some reason they fail to repay, there is a chance your money will be lost or there will be a delay in repayment. Additionally, your money is not covered for compensation in the event of loss by the Financial Services Compensation Scheme. Read our risks section for further details.
There are no additional fees for operating a ThinCats ISA, however standard account fees still apply. See fees for more details.