james
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Post by james on Jan 17, 2016 12:09:10 GMT
Also we are not talking about large sums. Even at 12% £15240 yields £1828, giving a tax saving of £365 or £731 and the biggest platforms pay much lower rates. All savings will get £500 or £1000 tax free anyway so frankly ISTM that it is no big deal for either small or large investors. I'm looking at something like 19%* average P2P interest rate for my current investments with a potential income tax liability of around a couple of thousand Pounds at basic rate. That's a fairly big deal, while the £1,000 tax free isn't. While it seems unlikely that most of my own P2P investments could be placed inside an ISA wrapper, the average interest rate still makes them a good deal and I'll just buy VCTs instead to soak up the income tax liability. *Assorted not now available deals to get me to that average rate. For example, you probably wouldn't want Bondora these days, it now has a different risk-reward blend from when I invested and new target net return of 12% or less, but this does mean that I have a lot of loans at 28% interest rate and just £3,572 of those would go over £1,000 of interest. For most people, stocks and shares ISAs have little value as a tax shelter and they would be better off taking their stocks and shares outside and putting their p2p inside. That's especially so for people with 6 figure portfolios. There's no need to track and report purchase and sales inside the ISA and that's a significant gain, particularly for larger portfolios. Outside the ISA you have to report every purchase (and it's price) and sale if you make sales of more than 4 times the CGT allowance, even if you have no CGT to pay. Lots of avoided record-keeping need there. Interest-paying investments can also benefit, as potentially can dividends under the pending new tax treatment of those. Still, using the allowance for P2P will beat using it for stocks and shares in terms of tax gain, easily.
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webwiz
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Post by webwiz on Jan 17, 2016 12:39:27 GMT
Of course if past years ISas currently in cash or shares could be liquidated and transferred into a IFISA that would be different, but this is most unlikely IMO. Based on the draft legislation this is undoubtedly possible, and I plan do just that. For most people, stocks and shares ISAs have little value as a tax shelter and they would be better off taking their stocks and shares outside and putting their p2p inside. That's especially so for people with 6 figure portfolios. Having got my money into my IFISA I'd like to get it invested quickly by transferring my existing investments across - which I may not be able to do. I hope you are right. I don't have any S&S ISAs but I have a lot of cash earning a pittance.
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pikestaff
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Post by pikestaff on Jan 17, 2016 15:01:34 GMT
Outside the ISA you have to report every purchase (and it's price) and sale if you make sales of more than 4 times the CGT allowance, even if you have no CGT to pay... Not quite. To be precise you have to report every sale and the cost of those sales - and only in any year that you go over the limit. There is no need to report purchases at all, but you do need either a record of costs or access to such a record. This is not really difficult and my online broker account has all the info readily to hand if I need it. It was much harder before indexation allowance was abolished. In any case, I'm a pretty passive investor and I plan on keeping below the limit most years.
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james
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Post by james on Jan 17, 2016 16:48:15 GMT
Outside the ISA you have to report every purchase (and it's price) and sale if you make sales of more than 4 times the CGT allowance, even if you have no CGT to pay... Not quite. To be precise you have to report every sale and the cost of those sales - and only in any year that you go over the limit. There is no need to report purchases at all, but you do need either a record of costs or access to such a record. Well, you have to report the purchase price and sale price which will often be equivalent to reporting each purchase, though strictly not because most will use the average purchase price basis, which requires instead calculating the average purchase price. Even if it turns out that for a particular deal you don't have to itemise each purchase you still need to do all of the record keeping anyway, and produce those records if HMRC asks. You also need to do the calculations even if no report is needed just to be sure you didn't go over the limits. Sometimes brokers do give handy reports but it's still more work to do outside the ISA than inside and you can't really rely just on a broker calculation because you can change broker and lose the records. Maybe some brokers are around that will let you enter all of the past purchase prices, or the average past purchase price that the normal HMRC return needs, don't know of one. Removal of inflation-linking has simplified things but now we get to pay capital gains tax on inflation so I don't think that's an improvement overall.
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pikestaff
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Post by pikestaff on Jan 17, 2016 22:30:49 GMT
...Maybe some brokers are around that will let you enter all of the past purchase prices, or the average past purchase price that the normal HMRC return needs, don't know of one. My broker (TD) has the book cost of each holding on the portfolio screen, from which calculating the average purchase price per share is trivial.
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pikestaff
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Post by pikestaff on Mar 24, 2016 10:34:05 GMT
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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 Mar 24, 2016 11:03:53 GMT
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james
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Post by james on Mar 24, 2016 12:34:43 GMT
It's not immediately obvious to me how the regs do this but perhaps james will know - and put us right if I've missed anything important. I may have a look over the long weekend and chance my arm trying to interpret something that's probably messy. Or not.  Sometimes it's nice to let the pros take care of things... Thanks to you both for the links, I'll be sure to have a read sometime, at least.
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ablender
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Post by ablender on Mar 24, 2016 18:07:53 GMT
The following is very interesting and promising
"1.5
We suggested that we may consider guidance on the sort of information that should be disclosed if firms holding interim permission were able to offer IFISAs. As it has since been confirmed that only firms holding full authorisation will be able to offer IFISAs we do not need to consider this issue further." (my bold)
I'll keep on reading.
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pikestaff
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Post by pikestaff on Mar 24, 2016 18:15:32 GMT
The following is very interesting and promising "1.5 We suggested that we may consider guidance on the sort of information that should be disclosed if firms holding interim permission were able to offer IFISAs. As it has since been confirmed that only firms holding full authorisation will be able to offer IFISAs we do not need to consider this issue further." (my bold) I'll keep on reading. Sadly I think the sentence after your bold bit rather kills it.
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ablender
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Post by ablender on Mar 24, 2016 18:29:52 GMT
Comments on the following:
"11. The general principle that consumers should take responsibility for their decisions
The approach on which we are consulting will place the onus on consumers to take responsibility for their actions and investment decisions. Our proposed rules focus on ensuring that firms disclose adequate information to allow investors to make informed investment decisions." pg 28 (my bold)
I understand it as: there should not be any restrictions on us seeing and using valuation documents as currently happens on some platforms.
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ablender
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Post by ablender on Mar 24, 2016 18:31:07 GMT
The following is very interesting and promising "1.5 We suggested that we may consider guidance on the sort of information that should be disclosed if firms holding interim permission were able to offer IFISAs. As it has since been confirmed that only firms holding full authorisation will be able to offer IFISAs we do not need to consider this issue further." (my bold) I'll keep on reading. Sadly I think the sentence after your bold bit rather kills it. I was wondering why there was the change if initially it was going to be considered.
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Post by mrclondon on Mar 24, 2016 18:35:58 GMT
Comments on the following: "11. The general principle that consumers should take responsibility for their decisions The approach on which we are consulting will place the onus on consumers to take responsibility for their actions and investment decisions. Our proposed rules focus on ensuring that firms disclose adequate information to allow investors to make informed investment decisions." pg 28 (my bold) I understand it as: there should not be any restrictions on us seeing and using valuation documents as currently happens on some platforms. disclose adequate information = data on historical and expected default rates, historical and expected loss on default etc. Members of the P2PFA have a consistent approach to publishing this data (see bottom half of p2pfa.info/data ), others don't ... IMO this is aimed fairly and squarely at those that don't.
i.e. macro level data on risk of a diversified portfolio on a particular platform not micro level data on a given loan
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ablender
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Post by ablender on Mar 24, 2016 20:51:11 GMT
Comments on the following: "11. The general principle that consumers should take responsibility for their decisions The approach on which we are consulting will place the onus on consumers to take responsibility for their actions and investment decisions. Our proposed rules focus on ensuring that firms disclose adequate information to allow investors to make informed investment decisions." pg 28 (my bold) I understand it as: there should not be any restrictions on us seeing and using valuation documents as currently happens on some platforms. disclose adequate information = data on historical and expected default rates, historical and expected loss on default etc. Members of the P2PFA have a consistent approach to publishing this data (see bottom half of p2pfa.info/data ), others don't ... IMO this is aimed fairly and squarely at those that don't.
i.e. macro level data on risk of a diversified portfolio on a particular platform not micro level data on a given loan consumers to take responsibility for their actions and investment decisions.
I understood this as relating to each individual loan since it relates to "consumers to take responsibility for their actions and investment decisions". We make decisions every time that we decide to lend in a particular loan and this is based not only on the macro figures shown by the platform but also by the information related to the particular business deal.
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james
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Post by james on Mar 24, 2016 21:57:17 GMT
disclose adequate information = data on historical and expected default rates, historical and expected loss on default etc. Members of the P2PFA have a consistent approach to publishing this data (see bottom half of p2pfa.info/data ), others don't ... IMO this is aimed fairly and squarely at those that don't.
i.e. macro level data on risk of a diversified portfolio on a particular platform not micro level data on a given loan
Not sufficient for platforms lending to businesses unless the amount that can be lent per loan is very low. There's that potentially pesky Lord Turner comment about actually having to look carefully at a business, not relying on just electronic checks to consider as well. If the cap is say £5 per loan per lender to businesses and there are hundreds per week the overall stats would be sufficient. Not if there are tens per week and thousands being lent per loan per lender. Bit like Zopa/RateSetter: large enough loan volume and small enough amount per loan (well, maybe not always at RS but the overall point holds) that the overall stats are what matters. But not at say Bondora where investors pick individual loans and the distribution can be very non-even. I don't think that the meaning of adequate is constant, instead it will depend on the platform and what lenders actually do on it.
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Sometimes it's nice to let the pros take care of things... 
