trium
Member of DD Central
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Post by trium on Apr 15, 2019 23:16:01 GMT
Like most MLA lenders I have accumulated a number of suspended loans (another one today makes 13 (4.4% of loans by value), plus a couple interest only). I notice from the recent tax statements that three of these (#282, #408,#723) have been written off as bad debt for tax purposes, however nothing on these loans distinguishes them from any other suspended loans. If it weren't for the tax statement I'd be none the wiser, implying that I'll be none the wiser in the forthcoming year either until I get the next tax statements.
Leaves me wondering what criteria has been applied to make these loans apparently irrecoverable and others not. Anyone know? Or am I being thick?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,850
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Post by ilmoro on Apr 15, 2019 23:49:17 GMT
Like most MLA lenders I have accumulated a number of suspended loans (another one today makes 13 (4.4% of loans by value), plus a couple interest only). I notice from the recent tax statements that three of these (#282, #408,#723) have been written off as bad debt for tax purposes, however nothing on these loans distinguishes them from any other suspended loans. If it weren't for the tax statement I'd be none the wiser, implying that I'll be none the wiser in the forthcoming year either until I get the next tax statements. Leaves me wondering what criteria has been applied to make these loans apparently irrecoverable and others not. Anyone know? Or am I being thick? IMO it's because they are in legal recovery with formal demand made & receivers/administrators appointed. Under HMRC rules these are 'treatable' as irrecoverable and therefore eligible for loss relief. (most platforms use this criteria) I assume the other 10 are either not yet in legal recovery or entered legal recovery in a previous tax year. www.gov.uk/guidance/peer-to-peer-lending#claiming-tax-relief-on-unpaid-loansNot advice etc.
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Post by jevans4949 on Apr 16, 2019 7:40:35 GMT
Suppose it might be useful if there was an indication for lenders on loans to indicate when loans were declared written off for tax purposes by Assetz. Especially as taxpayers are allowed to make their own decisions about this.
I suppose if a borrower found an "angel" prepared to regularise the situation, Assetz would have to declare this as recovery for tax purposes?
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Post by GentlemansFamilyFinances on Apr 17, 2019 11:52:04 GMT
My experience is that whilst bad debts happen, it's very hard to translate the loss into any tax benefit.
There is loss relief but you need to be either paying a lot of tax already or not have huge losses to take full advantage. And the process of late to default to official bad debt is just too long in my opinion.
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Post by jevans4949 on Apr 17, 2019 16:28:32 GMT
In the case of Income Tax, you can carry any excess loss forward to the next tax year.
The self-assessment system is not particularly friendly to people with P2P accounts; you need to keep track of how you worked out your liability separately and add it in to the return in a net figure.
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cb25
Posts: 3,522
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Post by cb25 on Apr 17, 2019 17:07:20 GMT
My experience is that whilst bad debts happen, it's very hard to translate the loss into any tax benefit. There is loss relief but you need to be either paying a lot of tax already or not have huge losses to take full advantage. And the process of late to default to official bad debt is just too long in my opinion. Not sure I follow that. Surely if you've had (say) £1000 of bad debt, which you declare, it stops you paying tax on that amount?
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