This is the second post in a series about The House Crowd, who are one of the pioneers of property crowdfunding in the UK. If you want to find out more general information about the company and what investing with them entails be sure to check out my first post: an introduction to The House Crowd which I’ve written in FAQ form to hopefully answer any questions you may have had about them (and feel free to ask any others in the comments section!)
This time round I’d like to talk about how investing in crowdfunding can be very tax efficient, even if you can’t at the time of writing wrap these investments into an ISA or SIPP (more on this later though!).
There are essentially two types of investment you can take up with The House Crowd, one which pays dividends and one which pays interest. The structure of each investment is clearly explained when you receive the lender fact sheet.
As a quick aside, I’d also recommend signing up to their email list as you’ll get new investment opportunities emailed through as they come up, with all the basic info you need to know plus links to the more detailed lender fact sheet. I’ve found you don’t necessarily have to act that quickly to get on board with any given investment, but I guess if a sterling one came up then being on the email list would be of benefit here, and more to the point it saves you having to go and check their website every week or so. The frequency of emails is not annoying as they don’t just pick any old property to invest in so you will likely only get one email per week. It’s also worth pointing out you can obviously sign up to the email list without actually putting any money up, that’s what I did for about a year to keep an eye on what type of properties came up before finally diving in so it’s a good way of weighing up what it’s all about.
Back to the tax stuff! Let’s look at how these two type of investment payout structures can work out with your tax, with some examples.