Do I have to declare my ISA profit on my tax return?
No. Your ISA earnings are exempt from tax and there is no need to declare them provided you meet the ISA rules. Our tax statement excludes your earnings within your ISA.
Can I open an ISA on behalf of someone else?
Only if you have a Lasting Power of Attorney for the person you want to open the ISA for. If that’s the case, please call us on 0333 123 1330 to discuss further.
Who can have an Innovative Finance ISA?
Anyone who is at least 18 years old and is a resident in the UK. You can also apply if you’re a Crown employee (such as a member of the armed forces or civil servant) serving abroad, or the partner of a Crown employee. You don’t need to be a taxpayer to have an IFISA but you must have a National Insurance number.
How many ISAs can I have?
In a single tax year, you can open and use one Cash ISA, one Stocks & Shares ISA and one Innovative Finance ISA. The total you pay in must not exceed £20,000 for 2023/ 2024.
Can I have more than one Innovative Finance ISA?
You may only use one Innovative Finance ISA in any single tax year. This means you could open one Innovative Finance ISA this year and in future years open additional Innovative Finance ISAs.
What are the fees?
We do not charge any fees to open an IFISA account.
Can I make a monthly transfer into my ISA?
Yes. Simply set up a Standing Order from your bank to pay into your Sourced Capital Innovative Finance ISA on a regular basis using the reference number provided.
If a loan defaults in this tax year, but isn’t recovered until the next tax year, does the recovery count towards my annual allowance?
No, it doesn’t. If a loan defaults in one tax year but is recovered in another, it simply adds back in to your IFISA balance. However, if you close your IFISA or transfer it to another provider then we’ll need to pay the money into a non-ISA account so those funds will lose their ISA status.
What happens if I pay too much into my ISA?
We’ll prevent you lending more than the ISA allowance for each tax year. However, if you have more than one ISA provider, it is up to you to make sure you don’t exceed the ISA allowance across all your accounts.
How much is the ISA allowance?
For the 2023/2024 tax year, the maximum is £20,000.
Can I lend more than the ISA limit with Sourced Capital?
Yes, you can lend as much as you want with Sourced Capital, but you must adhere to the ISA allowance within the IFISA to qualify for tax-free interest. If you have subscribed to the maximum amount in your Sourced Capital Innovative Finance ISA and you want to lend more, you can do so through a normal Sourced Capital account, which is set up automatically when your account is opened. Once you reach your IFISA limit for the prescribed tax year, any further funds lent will automatically be assigned to a standard Sourced Capital account.
How do I transfer out of Sourced Capital?
Please ask your new IFISA provider to email the Transfer Authority Form to [email protected]
. See Section 47 of the Terms and Conditions for further information regarding the transfer out of your IFISA. Before being able to transfer your Sourced Capital IFISA, you must divest from any loans you currently hold on your IFISA account, via the secondary marketplace. You should be aware that the secondary market is driven by supply and demand and we cannot guarantee a time frame in which your parts will be sold or whether all of your loans will be bought. Selling at a premium or discount on the secondary market may affect the rate at which parts are bought by other lenders.
If I transfer an IFISA, will it maintain tax efficiencies?
Yes, if you make a provider-to-provider transfer to ensure your ISA maintains its tax-free status.
Can I transfer an existing ISA to Sourced Capital?
Yes. Just elect to “transfer in” as part of the account opening process. Please contact us or refer to the Terms and Conditions for further information regarding the transferring in of your IFISA.
How does Sourced Capital manage my IFISA?
Your IFISA works very much like a normal Sourced Capital lending account. Once you have added funds to your Sourced Capital IFISA account, you will be able to individually select the loans you want in your portfolio. You will have a normal account alongside your IFISA account; this will collect any surplus balance should you credit an amount exceeding the maximum annual subscription. Goji is the ISA Manager for Sourced’s ISA investments.
What is an IFISA?
An Innovative Finance ISA is a type of account which allows tax-free interest on peer-to-peer loans. It’s subject to the same rules on eligibility and limits as other types of ISA. We have added IFISA-specific provisions to our Terms and Conditions. Please be aware that tax treatment depends on the individual circumstances of each client and may be subject to change in future. Please seek professional advice if necessary.
What happens if Sourced Capital ceases to trade?
Should Sourced Capital cease to trade, it has an agreement with a third party administrator to manage all loan parts on behalf of the lenders. This administrator will administer the payment of interest and the return of capital to lenders in accordance with sums collected and repayments of principal received from relevant borrowers. Sourced Capital has a Wind Down and Business Continuity Policy which have been overviewed and agreed by the FCA.
How do I make a complaint?
If you would like to make a complaint, you can email us at [email protected]
. In your email, please provide us with as much detail as possible regarding your complaint, and the relevant transaction that the complaint relates to. Alternatively, you can also submit your complaint via telephone or by post. You can find our contact details under the Contact Us menu of the website.
Upon receiving your email regarding the complaint, we will attempt to acknowledge receipt of the complaint within 24 hours. Acknowledgement of your complaint might take longer if it is received by post.
We will seek to come back to you in relation to the complaint, or with any questions that we may have, within 5 business days. If a decision is required by Sourced in relation to the complaint, we will endeavour to provide a final determination within 30 days.
Is my credit file viewed as part of the sign-up process?
No. As part of your registration with the platform we require you to undertake certain accreditation steps. One such step involves us verifying who you are, by checking your ID and proof of address against national and international databases. We are also required by law to ensure you are not on any Politically Exposed Persons (PEP) or Sanctions lists. We use a third-party provider for these checks, and at no time do we view your credit file. We do save a record of all the checks we make, and this information is processed under General Data Protection Regulation (GDPR).
What process do you have if I pass away during the investment term?
In such circumstances, your investment would remain intact and will be administered in accordance with your original agreement. However, we would request the executor of your estate contact us to discuss this process in more detail.
How does Sourced Capital make money?
Sourced Capital makes its money through charging fees to borrowers. Typically, Sourced Capital will charge an Arrangement Fee and an Exit Fee on any loans to borrowers. These fees cover Sourced Capital’s operating, transaction, management and monitoring costs.
These fees are clearly stated on the loan documentation and are evident to view by both lenders and the borrowers. Similarly, all new credit reports will clearly show investors what interest rate is being paid by borrowers.
Sourced Capital does not charge investors at all and has no plans to levy any fees against lenders
Is the interest that I earn taxed?
The interest you earn from your investments at Sourced Capital is paid gross, with no tax deducted. Interest earned from any loan is, however, treated as investment income by HM Revenue & Customs, which means you are responsible for declaring this income and your own tax affairs. We advise you to seek independent professional advice on how to do this if you are unsure.
Will I be able to monitor my investment?
Yes. Every investment you make will be visible using your online investment dashboard through the platform. You will be able to see what you have invested in, as well as the performance of your investments to date.
Will I earn interest when my money is held in my wallet at Sourced Capital, but not invested in a loan?
No, interest is not currently paid on any balances that are not invested into a loan. Interest is only paid by the borrower when a loan is live and Sourced Capital use that income stream to then pay lenders their interest.
Investors should note, however, that uninvested funds are kept safely ringfenced in a clients account and are available for withdrawal at any time.
What is the minimum amount I can invest?
The minimum investment amount is currently £1,000. Please read the Risk Warning carefully on the platform and if you cannot afford to lose your investment, you should not invest.
I am not a UK resident, can I invest?
It is possible for non-UK residents to invest into Sourced Capital loans. Please contact us to discuss your circumstances, as our required criteria and general eligibility does vary from time-to-time, dependent upon regulatory advice. Please note that you will need a UK bank account and all investors are subject to the same investor accreditation process and due diligence requirements.
Can I invest using different currencies?
No. Investments onto the Sourced Capital platform are required to be made in sterling (GBP) and the payment to Sourced Capital must be made from a UK bank account.
Is there a guaranteed rate of return I will receive on my investment?
Whilst Sourced Capital will closely manage all facilities throughout the life of the loan, with the clear intention that the lenders are repaid their capital and interest upon satisfactory repayment – payment of interest at the anticipated rate cannot be absolutely guaranteed. The return on your investment is directly linked to the borrower of your money fully repaying all capital and interest due.
To date, there have been no losses in relation to any loans provided by Sourced Capital, with all investors receiving all capital and interest due on all loans. This does not, however, mean that a guarantee can be given that there may not be loans which do not fully perform as expected in the future.
All loans do benefit from tangible property security. If a borrower did not repay a loan for whatever reason (e.g. if a borrower was to go out of business) the property security could be used to recover the maximum amount achievable, less any costs, to repay what is owed to investors. You should be aware that there are factors that can impact the recoverability of the maximum security amount, including market fluctuations and general economic factors.
How often do I receive my interest payments?
Interest will be paid to lenders when the borrower of your capital has repaid the loan amount due. Until the loan is fully repaid, interest accrues on the balance outstanding. Interest will be paid electronically directly to your online wallet and you will receive notifications when this has been done.
Can I withdraw my investment capital early if needed?
As we await the outcome from an ongoing industry review by the FCA, Sourced Capital has taken the decision to not currently offer a secondary market, consequently, when you lend money through Sourced Capital, you commit to investing that money for the full term of that loan and until repayment is attained. During this time, it is not possible to withdraw the original investment amount early.
When do I get my capital back?
You will be repaid your capital when the borrower has repaid the loan. If during the duration of the loan the borrower makes a partial reduction to the loan balance, you will receive a calculated partial repayment of your original investment.
Is my money at risk when investing on the platform?
Investments made into P2P loans are not protected by the Financial Services Compensation Scheme (FSCS). Consequently, your capital is at risk on any P2P loan should the borrower fail to repay a facility where you have elected to be a lender. Sourced Capital will help to mitigate this risk with a robust credit and due diligence process and all loans being secured by a 1st Legal Charge over the target property.
You are advised to read our Risk Statement and review the loan opportunity thoroughly before deciding to invest and you should not invest more money into P2P loans than you can afford to lose.
What is the usual loan-to-value on any loan from Sourced Capital?
All loans from Sourced Capital are secured loans, with a 1st legal charge held over a UK-based property asset. There is no “usual” Loan-to-value (LTV), with each loan having its own bespoke structure. The security details for each loan are fully detailed in the documentation available for investors to view before making any decisions to invest into a specific loan.
Whilst there is no “usual” LTV, there is a maximum LTV. The maximum LTV on any loan will be 70%, based upon a valuation provided for loan security purposes by an independent RICS valuer.
Are the loans to borrowers secured or unsecured?
Sourced Capital only provides secured loans.
All loan investment opportunities presented by Sourced Capital are directly property related and will benefit from being secured by a first legal charge over the property being party to that proposal. It would also be typical that the loan security suite will be enhanced to include a personal guarantee from the key principle(s) and a debenture where applicable.
Can I invest using an ISA?
Yes, you can invest tax-free by setting up a Sourced Capital Innovative Finance ISA (IFISA), subject to annual allowances. You can also transfer in existing ISA pots. To learn more, please contact us.
Can I invest using my pension?
Yes, lenders can invest using either a SSAS or SIPP and potentially benefit from tax-free income. Please contact us for further details before investing, as approval may be needed by your pension trustees or administrators.
Why is the Sourced Capital platform designed for High Net Worth (HNW) and Sophisticated investors?
Investments made into peer-to-peer (P2P) loans are not protected by the Financial Services Compensation Scheme. Consequently, your capital is at risk on any P2P loan should the borrower fail to repay a facility where you have elected to be a lender. Sourced Capital aims to protect lenders and treat all of our customers fairly. Because of this, the platform has been designed for High Net Worth (HNW) and Sophisticated investors, who are generally deemed better placed to understand the risks involved with this type of investing.
Who can invest with Sourced Capital?
The platform is available for investment by individuals and/or non-personal legal entities. The model has been created for Sophisticated and High Net Worth (HNW) investors only. Individuals can invest via their SSAS or SIPP pensions schemes, by using the IFISA or simply by way of personal funds. If you want to become an investor you must pass an accreditation process that includes an appropriateness test, ID verification and confirmation that you understand the risks involved. Finally, all investors must be 18 years of age or over and have a UK bank account.
What rates of return can I expect to receive on my investments via Sourced Capital?
Currently, Investors can earn up to 12% per annum. Investors decide which loans they want to participate in and all loans clearly state the rate of interest available for lenders (as well as the rate being paid by the borrower). All interest returns have fixed rates, with rates shown being on a per annum basis (non-compounded). Investors need to be advised that returns are not guaranteed and your capital is at risk.
Capital at Risk. FCA Regulated. No FSCS protection.
Do I have a shareholding (equity) in the projects I invest into?
No. Sourced Capital is a peer-to-peer lending business and deals exclusively with debt. Every investment will be a loan towards the project as specified for the borrower and returns will be in the form of interest on the capital loaned.
Is Sourced Capital a regulated business?
Yes, Sourced Capital is the trading name of Peer Funding Limited (Company Number 08773883), a company directly authorised and regulated by the Financial Conduct Authority (Reference Number 668078).
Is peer-to peer lending a regulated industry?
Yes, the peer-to-peer (P2P) lending industry in the UK is regulated by the Financial Conduct Authority (FCA) to facilitate the protection of lenders’ interests. In addition to overseeing the whole industry, the FCA also monitor the activities of the individual operating platforms under their remit.
What is peer-to-peer lending?
Peer-to-peer lending is a form of direct lending which matches lenders with borrowers via an online platform. It allows lenders to take control of their own investment decisions and lend directly on self-selected lending opportunities. It provides funding to borrowers without the involvement of a bank or other financial institution.
What experience do Sourced Capital have in property?
The Senior Management Team at Sourced have over 100 years combined experience in the property sector and real estate finance. This experience includes success in the directly related areas of property investment and property. As well as understanding property, the senior team includes highly qualified and vastly experienced finance professionals.
What is Sourced Capital?
Sourced Capital is a peer-to-peer property lending platform that lends to property professionals (property developers and/or property investors) with loans secured against UK-based property. Sourced Capital’s ‘loan-based crowdfunding’ platform is operated by a senior team of professionals with experience and a demonstrable proven track record in real estate and finance.
What happens to my IFISA if sourcedcapital.co stops trading?
The loans your money is invested in are a contract between you and the borrower. As part of FCA regulation we are required to have a living will with a third-party administrator that would take over the servicing of the loans. This administrator would also be an ISA manager so your investment would still be treated as an IFISA. You wouldn’t be able to add more funds into the Sourced Capital IFISA and your borrower’s repayments wouldn’t be reinvested in more loans. As the borrowers repays you, you would be able to withdraw the funds or transfer them to another ISA provider.