It was announced at Budget 2014 that the ISA system would be turned into a simpler product with equal subscription limits for cash, and stocks and shares, and increasing the overall limit to £15,000.

It was also announced that ISA eligibility would be extended to include P2P loans in order to increase choice for savers about how they invest.

The P2P lending sector matches up individuals with money to lend with individuals or small businesses looking to borrow money. At the moment, the interest that lenders earn via P2P platforms is taxable, but once P2P loans can be held in ISAs, then it will be possible to earn interest entirely tax free.

The consultation, which focuses on how best to implement these changes, proposes that P2P loans comply with existing ISA rules. It seeks views on whether P2P loans should be subject to the same transfer requirements as existing ISA investments, and whether they are suitable assets to be held in Child Trust Funds and Junior ISAs.

The consultation also discusses alternative options, where there are compelling arguments to adapt the rules, and their relative merits.

The Government will take all responses received during the consultation period into account before deciding how to implement the inclusion of peer-to-peer loans into ISAs.

The consultation is available at https://www.gov.uk/government/consultations/isa-qualifying-investments-consultation-on-including-peer-to-peer-loans/isa-qualifying-investments-consultation-on-including-peer-to-peer-loans