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Earn tax-free returns on property-backed bonds with a Smart Legals IFISA. Use your annual £20,000 ISA allowance to invest in fixed-term bonds and keep every penny of interest.
An Innovative Finance ISA (IFISA) is a tax-efficient wrapper that allows you to invest in peer-to-peer lending and debt-based securities — including property-backed bonds — while earning interest completely free of income tax and capital gains tax.
Introduced by the UK Government in April 2016, the IFISA was designed to give investors access to higher-yielding alternative investments within the familiar and trusted ISA framework. Unlike a traditional Cash ISA or Stocks & Shares ISA, the IFISA lets you invest in innovative finance products that can offer significantly higher returns.
With Smart Legals, you can hold our property-backed bonds within an IFISA, meaning all interest earned is completely tax-free. This can make a significant difference to your overall returns, especially for higher-rate and additional-rate taxpayers.
All interest earned within your IFISA is free from income tax and capital gains tax.
Invest up to £20,000 per tax year across all your ISA types combined.
Your IFISA investment is secured by the same legal charges over UK property assets.
Earn significantly more than a traditional Cash ISA with rates up to 10% p.a.
Open and manage your IFISA entirely online through your Smart Legals dashboard.
See how much more you could earn by investing through an IFISA compared to a standard investment account.
You save £3,200 in tax!
Example is illustrative only. Based on a 40% taxpayer investing £20,000 in Series Thirteen (10% on maturity, 4-year term). Tax treatment depends on individual circumstances and may change.
Opening an Innovative Finance ISA with Smart Legals is straightforward. Follow these simple steps to start earning tax-free returns.
Create your Smart Legals account online with basic personal details and verify your identity.
Choose the IFISA wrapper option when selecting your investment account type during setup.
Pick from our available bond series and select your preferred interest payment method.
Transfer your funds and start earning tax-free interest from your property-backed IFISA investment.
To open an Innovative Finance ISA with Smart Legals, you must meet the following criteria set by HMRC:
You must be a UK tax resident for the tax year in which you open and contribute to your IFISA.
You must be 18 years of age or older to open an Innovative Finance ISA.
You must have remaining ISA allowance for the current tax year. The total annual ISA allowance is £20,000 across all ISA types.
You can only subscribe to one IFISA provider per tax year, though you can hold IFISAs from previous years with different providers.
Yes, you can transfer existing ISA holdings from other providers into a Smart Legals IFISA. Contact our team for transfer assistance.
When your bond matures, the capital and any remaining interest are returned to your IFISA account. You can then reinvest into a new bond or withdraw the funds.
No. Innovative Finance ISA investments are not covered by the Financial Services Compensation Scheme. However, your investment is secured by a legal charge over UK property assets.
Yes, you can hold multiple bond series within a single IFISA account, provided your total contributions do not exceed the annual allowance for that tax year.
Start earning tax-free returns on property-backed bonds. Open your Innovative Finance ISA in minutes with Smart Legals.