Through Abundance you can make investments within an Innovative Finance ISA (IF ISA) portfolio, with your investment returns then being tax free. However, not all of the investments on Abundance can currently be held in an ISA.
Abundance lets you invest in two types of investments; debentures offered by a company and investments offered by a council, which we call Community Municipal Investments (CMIs). All of the debentures offered by a company are eligible to be held in an IF ISA.
However, it is currently not possible to hold our CMIs in an ISA, which means that you won’t be able to invest in them through your Abundance IF ISA portfolio. This is because investments issued by a local authority are not currently included within the scope of the Innovative Finance ISA rules. If you want to invest in one of our CMIs, you can do so through a Standard portfolio (a general, taxable, investment portfolio) which you can open alongside your IF ISA portfolio. You can also invest in CMIs through an Abundance Pension.
Bear in mind that you can earn up to £1,000 of interest tax free each year (£500 for higher rate taxpayers) under the Personal Savings Allowance, so you could still get a tax free return from our CMIs if you invest through a Standard portfolio. If you expect to use your full £20,000 ISA allowance for the year, you can maximise your tax-free return by using your ISA allowance to invest in higher return investments, and make your lower return investments outside of your ISA.