The UK regulatory authorities are making the best of a bad job. Cryptocurrencies are here to stay, of that there’s no doubt – but regulation, and consequent auditing and taxation of taring and investment gain of these assets are still some way off.
The deadline for UK cryptoasset firms to fully register and comply with the Financial Conduct Authority’s rules has been pushed back to March 2022 after the regulator said many applicants are still failing to comply.
A “significantly high number” of cryptoasset firms are still not meeting the regulations around anti-money laundering and counter-terrorist financing, the FCA said yesterday.
“This has resulted in an unprecedented number of businesses withdrawing their applications,” the regulator wrote.
“The extended date allows cryptoasset firms to continue to carry on business while the FCA continues with its robust assessment.”
51 companies have withdrawn their applications, meaning they can no longer trade.
Currently, just five firms are registered with the FCA, with 90 operating under the temporary registration rules which were due to end on 9 July before yesterday’s extension was announced.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.