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Post by valueinvestor123 on Aug 9, 2023 10:18:03 GMT
Hi,
I am selling a house and there will be some capital gains. I want to use some of the capital losses against the capital gains of the house.
Can I just put in the total amount the platform lost me or do I need to list individual loans?
If the latter, is there an easy way to work this out front the platform interface? I am not certain how to work it out.
Thanks for the help!
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Post by bracknellboy on Aug 9, 2023 11:06:24 GMT
Hi, I am selling a house and there will be some capital gains. I want to use some of the capital losses against the capital gains of the house. Can I just put in the total amount the platform lost me or do I need to list individual loans? If the latter, is there an easy way to work this out front the platform interface? I am not certain how to work it out. Thanks for the help! were you doing your lending as an individual or through a company? If you were lending as an individual, there is no mechanism for using P2P capital loss to offset capital gain anywhere. You can only use it to offset P2P income.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Aug 9, 2023 11:46:40 GMT
Hi, I am selling a house and there will be some capital gains. I want to use some of the capital losses against the capital gains of the house. Can I just put in the total amount the platform lost me or do I need to list individual loans? If the latter, is there an easy way to work this out front the platform interface? I am not certain how to work it out. Thanks for the help! were you doing your lending as an individual or through a company? If you were lending as an individual, there is no mechanism for using P2P capital loss to offset capital gain anywhere. You can only use it to offset P2P income. Actually not true ... you can use CG relief where loans don't qualify or you don't have any P2P income to offset provided the conditions for CG are met. How this works in practice I don't know www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim12210
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Post by valueinvestor123 on Aug 9, 2023 12:44:04 GMT
Hi, I am selling a house and there will be some capital gains. I want to use some of the capital losses against the capital gains of the house. Can I just put in the total amount the platform lost me or do I need to list individual loans? If the latter, is there an easy way to work this out front the platform interface? I am not certain how to work it out. Thanks for the help! were you doing your lending as an individual or through a company? If you were lending as an individual, there is no mechanism for using P2P capital loss to offset capital gain anywhere. You can only use it to offset P2P income. Capital losses from equities can be offset against capital gains elsewhere (property etc)? Why not the same with peer2peer loans?
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Post by valueinvestor123 on Aug 9, 2023 13:02:34 GMT
were you doing your lending as an individual or through a company? If you were lending as an individual, there is no mechanism for using P2P capital loss to offset capital gain anywhere. You can only use it to offset P2P income. Actually not true ... you can use CG relief where loans don't qualify or you don't have any P2P income to offset provided the conditions for CG are met. How this works in practice I don't know www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim12210Which conditions have to be met? What are “qualifying loans”? Has anyone done this? Thanks
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duck
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Post by duck on Aug 9, 2023 13:33:53 GMT
Which conditions have to be met? What are “qualifying loans”? Has anyone done this? Thanks My wife accountant is currently going through the process. Because my wife now has no taxable P2P income* we are using her P2P losses (some self deemed) against a property sale. *Priority has to be given to P2P income first.
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Post by bracknellboy on Aug 9, 2023 14:13:12 GMT
Which conditions have to be met? What are “qualifying loans”? Has anyone done this? Thanks My wife accountant is currently going through the process. Because my wife now has no taxable P2P income* we are using her P2P losses (some self deemed) against a property sale. *Priority has to be given to P2P income first. so does SAIM12210 apply to P2P loans in general, or does it only come into play for those loans (the 'small proportion') which prior to Apr 2016 would have been eligible for CGT relief ? When I read SAIM12210, I take the intent to be that the exceptions (the "may .... possibly...qualify") apply to those loans which would have previously been eligible for CGT relief i.e. in effect the whole 'subject' of that section is about grandfathering the legacy CGT relief rights of those quite specific loan types into the new broader relief regime for those circumstances when IT relief cannot be taken advantage of. (In other words it is applicable to this: "This may be the case for peer to peer loans that have been assigned to another person (more details in the Capital gains manual at CG53480), or for ‘loans to a trader’ (more details at CG65900). )"
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duck
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Post by duck on Aug 9, 2023 14:48:45 GMT
I have to agree with you bracknellboy the wording could be far clearer. My accountants view was that can be said to apply. We are of course ready to be knocked back but those paragaphs do appear to confirm that we can apply the losses. |
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Post by bracknellboy on Aug 9, 2023 16:34:53 GMT
I have to agree with you bracknellboy the wording could be far clearer. My accountants view was that can be said to apply. We are of course ready to be knocked back but those paragaphs do appear to confirm that we can apply the losses. As you say, the wording is definitely as clear as mud. Your accountant may well be correct - and indeed I hope it is so for those that can benefit - and given who they are, it would be foolish for me to contradict them :-) But that para taken out of context can read very differently to when it is read in context. SAIM12210 starts with "....A small proportion of peer to peer (P2P) loans have been historically eligible for relief as a capital loss under Taxation of Chargeable Gains Act (TCGA 1992) ...["loans assinged to another person...loans to a trader"] The paras you have quoted are in their own "subsection", which is opened with "An irrecoverable loan that would have been eligible for capital gains relief as a capital loss under TCGA 1992 will no longer be eligible for that relief. This is because Section 2(3) of TCGA 1992 specifically gives priority to income tax reliefs." It is only then it goes on to say "However,...". I just think that if HMRC had intended in the general case for CGT relief to be available when IT relief had been exhausted, it would be structured and worded quite differently. Or put it another way, if that had been my intent I certainly wouldn't have written it like that :-) Regardless, good luck. For some it would be extremely helpful if this was so.
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Post by valueinvestor123 on Aug 9, 2023 17:37:27 GMT
I have to agree with you bracknellboy the wording could be far clearer. My accountants view was that can be said to apply. We are of course ready to be knocked back but those paragaphs do appear to confirm that we can apply the losses. So in case CGT relief can be used, do you need to work it out and put down each individual loan, or can you give a one figure for all the loans where it is applicable? I am asking my accountant as well.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Aug 9, 2023 19:04:08 GMT
I have to agree with you bracknellboy the wording could be far clearer. My accountants view was that can be said to apply. We are of course ready to be knocked back but those paragaphs do appear to confirm that we can apply the losses. So in case CGT relief can be used, do you need to work it out and put down each individual loan, or can you give a one figure for all the loans where it is applicable? I am asking my accountant as well. It would appear that you enter the aggregate sum being claimed or the sum that would reduce your liability to zero. It would appear that you are required to provide your working out (computations) ... however, Im sure your accountant or HMRC will be able to better advise you than anyone on a forum assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1148433/SA108_Notes_2023.pdf
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duck
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Post by duck on Aug 10, 2023 0:59:55 GMT
bracknellboy Our interpretation of this is that this distinguishes those P2P loans that were never eiigable for tax relief i.e. those loans that crashed and burned before offsetting of losses against income tax was available. Before that time CGT could be used and the 'however' is used to distinguish those pre income tax relief loans from those that would be eligable for income tax relief. HMRC might view matters differently when the return is made but we will see ..... ilmoro My accountant said that she would be taking the approach you have stated. I have already compiled and supplied a spreadsheet with all loans listed along with the latest and any pertinent loan updates to show that the loan has been written off by the platform or is deemed to be irrecoverable by myself (as per the self deeming rules). This spreadsheet will be supplied with the computaion along with the CGT return. This was a time consuming task but since the timescales are tight following the sale of the property I got the task done early. To answer the question in the other thread where this is being discussed. IF recovery is made on any of the written off / self deemed irricoverable loans in the future that will be declared as income (and taxed accordingly) in future years.
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Post by bracknellboy on Aug 10, 2023 7:05:38 GMT
Another possible consideration here is it may not matter much what the original intent of this section was or was not. P2P is niche and so this will be relatively little used, and what will matter is how someone at HMRC today reads it. And given its wooliness/potential ambiguity/lack of clarity the broader interpretation is entirely possible regardless of whether it was originally intended or not.
Good luck with it.
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duck
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Post by duck on Aug 10, 2023 7:43:44 GMT
Another possible consideration here is it may not matter much what the original intent of this section was or was not. P2P is niche and so this will be relatively little used, and what will matter is how someone at HMRC today reads it. And given its wooliness/potential ambiguity/lack of clarity the broader interpretation is entirely possible regardless of whether it was originally intended or not. Good luck with it. Agreed.
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ilmoro
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Post by ilmoro on Aug 10, 2023 11:21:16 GMT
Another possible consideration here is it may not matter much what the original intent of this section was or was not. P2P is niche and so this will be relatively little used, and what will matter is how someone at HMRC today reads it. And given its wooliness/potential ambiguity/lack of clarity the broader interpretation is entirely possible regardless of whether it was originally intended or not. Good luck with it. That's true with most of the P2P tax/loss relief rules ... lots of grey areas & open to interpretation. Plenty of people doing stuff that appears outside of rules but either HMRC not fully conversant with facts, not checking or interpreting things differently (& surprisingly favourable) Caveat emptor, keep detailed notes & tell HMRC what & why.
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