ZOPA investors can now automatically re-direct their repayments into their Innovative Finance ISA (IFISA).
The peer-to-peer consumer lender confirmed this week that customers can gradually move their Zopa money into the tax wrapper without having to sell loans or pay extra fees.
Moving money into the IFISA will contribute to the investor’s annual tax-free allowance, Zopa said. However, once money is in the IFISA and has been lent out, those repayments will not contribute to the IFISA allowance.
“This is because you’re effectively recycling the money that you’ve already contributed into your ISA,” Zopa said in a blog post on its website.
Read more: Zopa developing IFISA transfer features
Zopa has also built a tool that will automatically stop repayments going into the IFISA when the tax year ends, or when it reaches its annual limit, if the investor’s only ISA is with Zopa. The excess money would go back into the customer’s standard Zopa investment account or their holding account, Zopa said.
Zopa launched its IFISA in June this year, purely to existing investors to avoid a mismatch of investor funds and new loans.
Read more: Zopa lends £100m in one month