j
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Penguins are very misunderstood!
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Post by j on Mar 3, 2015 19:17:30 GMT
How many years do we have to declare any losses in p2p to HMRC? I'm thinking of the wonderful Southerly-based, pipe-challenged AC loan.
Also, whilst I'm sure I know the answer but will ask, we can only offset the loss against current tax year in which loss happens (ie not 2014-15 as most likely outcome will not be know till well after April this year) or future tax year if resolved by then?
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bigfoot12
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Post by bigfoot12 on Mar 3, 2015 19:27:42 GMT
It is a while since I had a loss, so I might be out of date. But I think that you can carry it forward for quite a few years, but not if you make a gain. (i.e. if you make a gain you have to use the loss first.) www.gov.uk/capital-gains-tax/losses << looks like my memory is wrong. Not clear if you can report a loss within 4 years, but then carry it forward. Hopefully there will be no loss, but failing that, let's hope the loss isn't crystallised before the change in rules which will allow us to offset it against income tax. |
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Post by solicitorious on Mar 3, 2015 21:50:29 GMT
We should lobby our MPs to include something similar in the proposed income tax loss relief.
What happens if you get out of P2P before the crystallized loss?
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bigfoot12
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Post by bigfoot12 on Mar 3, 2015 22:03:52 GMT
What happens if you get out of P2P before the crystallized loss? On most platforms you can't get out, once a loan is in some sort of default.
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Post by solicitorious on Mar 3, 2015 22:16:11 GMT
What I mean is. What happens if by the time of the crystallized loss you have no other P2P holdings (interest) against which to utilize the loss?
That's why we need a carry-back and carry-forward clause.
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bugs4me
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Post by bugs4me on Mar 3, 2015 22:22:18 GMT
How many years do we have to declare any losses in p2p to HMRC? I'm thinking of the wonderful Southerly-based, pipe-challenged AC loan.
Also, whilst I'm sure I know the answer but will ask, we can only offset the loss against current tax year in which loss happens (ie not 2014-15 as most likely outcome will not be know till well after April this year) or future tax year if resolved by then? Not particularly helpful but I read somewhere that on this particular loan the administrator(s) IIRC were stating it could be sometime in 2017 when everything was resolved. By that I assume they would be able to state the exact financial position.
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Post by bracknellboy on Mar 3, 2015 22:36:01 GMT
What I mean is. What happens if by the time of the crystallized loss you have no other P2P holdings (interest) against which to utilize the loss? That's why we need a carry-back and carry-forward clause. are you lending as an individual or a company ?
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Post by Come_on_Grandad on Mar 3, 2015 22:47:07 GMT
Bad news: income tax relief on P2P losses will only be available for loans starting after 6 April 2015.
Here is an extract from HMRC Overview of legislation in draft, dated 10 Dec 2014 (easy to find on google, but I can't work out a link to it):
"1.15. Bad debt relief on peer-to-peer lending. As announced at Autumn
Statement, new legislation will be introduced to allow individuals who make loans
through peer-to-peer (P2P) platforms to offset bad debts arising against the interest
they receive from P2P loans when calculating their taxable income. These changes
will have effect for loans made from 6 April 2015. Legislation will be included in
Finance Bill 2016 and the Government will publish draft legislation in 2015. The
Government will also consult with industry about developing new withholding tax
rules for P2P platforms."
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Post by pepperpot on Mar 3, 2015 23:06:46 GMT
Bad news: income tax relief on P2P losses will only be available for loans starting after 6 April 2015. Here is an extract from HMRC Overview of legislation in draft, dated 10 Dec 2014 (easy to find on google, but I can't work out a link to it): "1.15. Bad debt relief on peer-to-peer lending. As announced at Autumn Statement, new legislation will be introduced to allow individuals who make loans through peer-to-peer (P2P) platforms to offset bad debts arising against the interest they receive from P2P loans when calculating their taxable income. These changes will have effect for loans made from 6 April 2015. Legislation will be included in Finance Bill 2016 and the Government will publish draft legislation in 2015. The Government will also consult with industry about developing new withholding tax rules for P2P platforms." Thanks for pointing that out... Is this what you mean? Being pdf, there is no direct link to the relevant paragraph, but the whole document is... www.gov.uk/government/uploads/system/uploads/attachment_data/file/385370/OLD_complete_v3.pdf
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Mar 3, 2015 23:20:48 GMT
Full understanding thus far then is we each have £11k cgt (2015 tax year) tax free allowance (assumption that p2p is under this umbrella). As pointed out, any tax relief on losses will occur on loans starting next tax year (apr 2015). Any losses can only be crystallised going forward & not to offset, say, previous year's profits (eg 2014-2015 losses or beyond cannot for example be used to offset profits from 2013-2014). Also, those of us who hoped they might at least utilise losses from loans such plumber man now cannot as the loan originated before the aforementioned Apr 2015 start off line. Even if that didn't apply, it could only have been utilised around the 2017 mark as that is the estimated resolution time frame (assumption only).
Have I missed anything? Got anything totally wrong? If so, feel free to add & correct
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
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Post by j on Mar 3, 2015 23:22:21 GMT
Bad news: income tax relief on P2P losses will only be available for loans starting after 6 April 2015. Here is an extract from HMRC Overview of legislation in draft, dated 10 Dec 2014 (easy to find on google, but I can't work out a link to it): "1.15. Bad debt relief on peer-to-peer lending. As announced at Autumn Statement, new legislation will be introduced to allow individuals who make loans through peer-to-peer (P2P) platforms to offset bad debts arising against the interest they receive from P2P loans when calculating their taxable income. These changes will have effect for loans made from 6 April 2015. Legislation will be included in Finance Bill 2016 and the Government will publish draft legislation in 2015. The Government will also consult with industry about developing new withholding tax rules for P2P platforms." Thanks for the info Come_on_Grandad, was not aware. Now I'll go & drown (no plumber in sight when you need one) in more of this loan's sorrow 
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mikes1531
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Post by mikes1531 on Mar 3, 2015 23:40:05 GMT
As pointed out, any tax relief on losses will occur on loans starting next tax year (apr 2015). Any losses can only be crystallised going forward & not to offset, say, previous year's profits . If tax relief on losses only starts with loans made after 5/Apr/15, then I don't see how any 2014-2015 losses could be used against income at all. So I would have thought the parenthetical remark should read more like... "(eg losses arising in 2015-2016 or later years cannot be used to offset profits from any previous year)". Is that any more correct? Or clearer?
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bigfoot12
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Post by bigfoot12 on Mar 4, 2015 8:24:43 GMT
Bad news: income tax relief on P2P losses will only be available for loans starting after 6 April 2015. Here is an extract from HMRC Overview of legislation in draft, dated 10 Dec 2014 (easy to find on google, but I can't work out a link to it): "1.15. Bad debt relief on peer-to-peer lending. As announced at Autumn Statement, new legislation will be introduced to allow individuals who make loans through peer-to-peer (P2P) platforms to offset bad debts arising against the interest they receive from P2P loans when calculating their taxable income. These changes will have effect for loans made from 6 April 2015. Legislation will be included in Finance Bill 2016 and the Government will publish draft legislation in 2015. The Government will also consult with industry about developing new withholding tax rules for P2P platforms." It feels wrong "liking" the bad news. How dull.
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Post by reeknralf on Mar 4, 2015 9:41:51 GMT
Would it perhaps be possible for AC to do a bed and breakfast deal on the leaky pipes, whereby the loan is repaid and then immediately reissued to the same lenders, on some date after the cutoff?
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Mike
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Post by Mike on Mar 4, 2015 10:13:17 GMT
On a slightly related news, does 'interest earned' in the 'tax statement' only count interest paid? Or does it count unpaid (unlikely-to-ever-be-paid) interest too?
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