james100
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Post by james100 on Aug 10, 2023 15:20:42 GMT
I've had a note for last 3(?) years on my tax return about intention to claim a CGT loss wrt to Collateral in the event that the FCA doesn't cough up the shortfall. Off the top of my head, plan is to argue it on the basis that Collateral never had correct authorisations so never qualified for the income tax deduction (irrespective of whether there was sufficient p2p income to offset it), therefore CG rules must apply as backstop. Or something like that. I've always used self-deeming approach on defaults and communicate a lot of info / rationale with returns on the basis that specific disagreements are easier to correct than broad ones. Very interested in the response you get on this duck best of luck.
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duck
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Post by duck on Aug 10, 2023 17:07:48 GMT
I've had a note for last 3(?) years on my tax return about intention to claim a CGT loss wrt to Collateral in the event that the FCA doesn't cough up the shortfall. Off the top of my head, plan is to argue it on the basis that Collateral never had correct authorisations so never qualified for the income tax deduction (irrespective of whether there was sufficient p2p income to offset it), therefore CG rules must apply as backstop. Or something like that. I've always used self-deeming approach on defaults and communicate a lot of info / rationale with returns on the basis that specific disagreements are easier to correct than broad ones. Very interested in the response you get on this duck best of luck. I do of course have a letter/ruling from HMRC saying that Col is not eligable for income tax deduction this may come in useful if/when you need to press the button.
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Post by valueinvestor123 on Aug 11, 2023 16:24:21 GMT
What is the reason for HMRC to mix up income with capital gains? To my knowledge, they never do this with any other asset class. Is it because nobody predicted that there might be capital losses? Would be good to have a definitive answer on this.
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Post by valueinvestor123 on Aug 11, 2023 16:32:32 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. What does your accountant say about this part: “Loans that become irrecoverable on or after 6 April 2016 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.” As far as I know, the platforms such as Fundingsecure and Lendy went into administration in 2019, no?
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Post by bracknellboy on Aug 11, 2023 17:30:43 GMT
What is the reason for HMRC to mix up income with capital gains? To my knowledge, they never do this with any other asset class. Is it because nobody predicted that there might be capital losses? Would be good to have a definitive answer on this. I think the answer to that is rather simple: because the P2P industry lobbied for it, and the govt. at that time wanted to make P2P lending more attractive so went with it. For P2P to be a mainstream alternative form of "saving" (sic), with the focus on interest generation not capital growth, but with the risk of capital losses, the need to offset loss against income was probably paramount: the mainstream generally wouldn't have had yearly capital gains against which to offset loss, and so that was a less attractive 'break'.
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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 11, 2023 18:25:56 GMT
What does your accountant say about this part: “Loans that become irrecoverable on or after 6 April 2016 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.” As far as I know, the platforms such as Fundingsecure and Lendy went into administration in 2019, no? At a guess they have read the next but one paragraph which adds a qualification to that statement
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duck
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Post by duck on Aug 12, 2023 14:34:34 GMT
What does your accountant say about this part: “Loans that become irrecoverable on or after 6 April 2016 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.” As far as I know, the platforms such as Fundingsecure and Lendy went into administration in 2019, no? At a guess they have read the next but one paragraph which adds a qualification to that statement Indeed.
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Post by valueinvestor123 on Aug 13, 2023 13:28:47 GMT
What does your accountant say about this part: “Loans that become irrecoverable on or after 6 April 2016 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.” As far as I know, the platforms such as Fundingsecure and Lendy went into administration in 2019, no? At a guess they have read the next but one paragraph which adds a qualification to that statement The next paragraph being this? “Loans that become irrecoverable between 6 April 2015 and 5 April 2016 An irrecoverable loan that would have been eligible for relief as a capital loss under TCGA 1992 may still be eligible for Capital Gains relief, but only if no claim is made for P2P income tax relief for the loss on the loan.” Most of the loans that have become irrecoverable were after 2016 though? Or did I miss something
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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
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Post by ilmoro on Aug 13, 2023 15:26:20 GMT
At a guess they have read the next but one paragraph which adds a qualification to that statement The next paragraph being this? “Loans that become irrecoverable between 6 April 2015 and 5 April 2016 An irrecoverable loan that would have been eligible for relief as a capital loss under TCGA 1992 may still be eligible for Capital Gains relief, but only if no claim is made for P2P income tax relief for the loss on the loan.” Most of the loans that have become irrecoverable were after 2016 though? Or did I miss something Yes, I said next but one ...
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Post by valueinvestor123 on Aug 14, 2023 10:43:25 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. Regarding itemising loans: is this information available from peer2peer websites? (My losses are mostly from Fundingsecure and Lendy). I have not kept track of which loans went bust. But it would be good to have proof ready at hand. There’s only 60 days following sale of property to work out precisely capital losses.
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duck
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Post by duck on Aug 14, 2023 11:30:21 GMT
Regarding itemising loans: is this information available from peer2peer websites? (My losses are mostly from Fundingsecure and Lendy). I have not kept track of which loans went bust. But it would be good to have proof ready at hand. There’s only 60 days following sale of property to work out precisely capital losses. Yes all information is available on both Lendy and FS sites. The 60 day rule is exactly why I did this work in advance, assuming the sale would go through.
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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 14, 2023 13:01:00 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. Regarding itemising loans: is this information available from peer2peer websites? (My losses are mostly from Fundingsecure and Lendy). I have not kept track of which loans went bust. But it would be good to have proof ready at hand. There’s only 60 days following sale of property to work out precisely capital losses. Lendy see website, admin reports & synopsis here p2pindependentforum.com/post/268187/thread (needs a bit of update ... Will look tonight)
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Post by valueinvestor123 on Dec 5, 2023 18:33:43 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. Hi, Can I ask: have you managed to do this in the end? (offsetting capital losses from peer2peer against property sale).
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duck
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Post by duck on Dec 6, 2023 1:49:46 GMT
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. Hi, Can I ask: have you managed to do this in the end? (offsetting capital losses from peer2peer against property sale). Yes and no! The sale finally went through 10 days ago and the 60 days was 'on'. Then the accountant realised that as the property was outside the UK the 60 day rule didn't apply, So profuse apologies given. All the calculations and paperwork prepared but they will now be submitted with my wifes 23/24 return.
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Post by masquedefer on Apr 11, 2024 6:31:28 GMT
There are many basic inequities in the P2P rules: Surely these should be taken into account when interpreting them in an equitable manner on the assumption there was never an intention to disadvantage or financially penalise P2P lenders by supposedly simplifying P2P lending ? Eg:
P2P losses are offset against interest income but they are strictly restricted to only P2P interest. Losses are not offsettable against other interest such as bank, building society and share interest.
If not enough P2P interest is available to offset the loss the loss can only be carried forward for 4 years. Losses on non P2P loans and CG losses in general can be carried forward forever.
Others?
Possibly we can assemble a strong case for letting Failed P2P like Lendy be treated as CG losses.
Disclosure: £51k lost with Lendy.
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