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Post by wengyeeRelendex on Oct 26, 2016 8:29:10 GMT
We would just like to reintroduce ourselves to members of this forum. I’m sure some of you will remember us as we have been around since 2013 (albeit having gone slightly quite in the past year). However we are delighted to say that we have recently received a new equity injection which has allowed us to provide new loans and new features available soon on our website [ www.relendex.com] Firstly let me address some of the changes that we have undertaken since you last heard from us. 1. We are no longer operating with the Guernsey structure as we have found that it was not the most suitable process for us. Now a fully UK based operation, we are regulated under “Interim Permissions” by the Financial Conduct Authority and have submitted our application for full authorisation. 2. Introduction of a Direct Lending model. In line with FCA standards, we have made a change to our lending model which you can read about * here*. 3. Strengthened our operations team so processes like deposits and withdrawals should go through more smoothly. 4. With regards to certified copies of ID (which I know many were not a fan of), we have an alternative process which just needs a quick video conference call with one of the team to look over your documents to complete the Know Your Customer process. 5. Another small but significant change is to our logo! We hope that it will better reflect who we are as a company. One that is transparent, trustworthy and progressing ahead in the p2p market. We have a number of loans in the pipeline, with one potentially going live end of this week/early next week. So if you have any questions for us, please don’t hesitate to ask. |
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adrianc
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Post by adrianc on Oct 26, 2016 8:36:06 GMT
In your opinion, is every other platform being somehow irresponsible and lax by NOT requiring this video conference and power of attorney?
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upland
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Post by upland on Oct 26, 2016 9:15:36 GMT
Ditto , I hate the way we seem in this country to cause the ordinary investor so much nuisance administrative things to do usually accompanied by threats. Tax residency , money laundering , the list is endless and it never seems to stop the criminals , just causes me headaches.
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ablender
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Post by ablender on Oct 26, 2016 10:21:17 GMT
Had a quick look. ISTM like a lower interest rate version of SS but with lower LTV, some, significantly lower.
Have not explored SM (if any) and any other aspects.
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james
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Post by james on Oct 26, 2016 10:34:12 GMT
The FAQ says "in respect of the Loan Facility Agreement, replacing Relendex Lending Limited (acting as Facility Provider) with each successful bidder or purchaser of a Loan Part in a particular loan." but the new lending model says " Lenders bid on the live auction on the Relendex platform exactly as before. Relendex Lending Limited (RLL) issues a Loan Facility Agreement (LFA) to a borrower. When the auction fills ups, the loan is then novated (transferred) to individual lenders". These two documents disagree about the sequence of events. Does Relendex commit to lending to the borrower using Relendex money before the auction starts? Before it is filled? Ever? What does the loan facility agreement commit Relendex to do to fund the loan? Only offer to market it? Or is there any potential use of relendex money? Is the loan facility agreement in place before the start of the biding? If not, when it it put in place? On to tax. There is novation: " Facility Provider (Relendex Lending Limited) is the contracting party in the first instance with the Borrower. Once the loan auction is filled, the Facility Provider steps back and individual lenders (by novation) enter into a direct contractual relationship with the Borrower.. Are these simple debts in the hands of an individual who lends in the auction, given that the novation appears to mean that there has already been at least one transfer before they get the loan? Are these securities? Are these covered by the Accrued Interest Scheme? If the loans are initially simple debts for those who get them in the initial auction, do they remain simple debts after a purchase on the resale market? What reporting is available to help lenders work out their capital gains tax position if each repayment, sale or purchase is a relevant CGT event that needs to be tracked and used in calculations? As you'll be aware, CGT reporting is required if the value of disposals is above four times the annual CGT allowance even if there is no taxable profit, so sales at par matter if the loan is not simple in the hands of a buyer who then sells or receives repayments (which are also disposals). |
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Post by wengyeeRelendex on Oct 26, 2016 13:13:48 GMT
In your opinion, is every other platform being somehow irresponsible and lax by NOT requiring this video conference and power of attorney? Hi adrianc, We don’t feel that it is our place to comment on what other platforms do or don’t do, after all every platform has their own AML/KYC processes. What we work hard to do is ensure that the processes we adopt meet the highest standards for anti-money laundering protocols, whilst providing our lenders with a choice of ways to provide their information including the video conferencing option. And with the power of attorney/deed of novation, we see it as a good way to improve the direct security for our lenders. Yes it may all be more rigorous and conservative than you have experienced before, but when handling funds from so many individuals, it really gives all parties a peace of mind.
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invest
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Post by invest on Oct 27, 2016 5:50:28 GMT
What is the minimum investment ? You can add this info to your FAQ.
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Post by wengyeeRelendex on Oct 27, 2016 8:14:34 GMT
Oh wow quite a snowball of questions there james. Please see below for our answers in italics. Does Relendex commit to lending to the borrower using Relendex money before the auction starts? Before it is filled? Ever? What does the loan facility agreement commit Relendex to do to fund the loan? Only offer to market it? Or is there any potential use of Relendex money? Is the loan facility agreement in place before the start of the biding? If not, when it it put in place? The Loan Facility is in place before bidding but it does not commit Relendex to fund. The role of RLL is to make sure the key terms are agreed with the Borrower before bidding and that all lenders simultaneously novate into the same terms without variation. Relendex, as matter of policy, does not lend its own capital. However from time to time some of our directors and key shareholders co-fund loan requirements through the platform. We understand from our peers that the FCA has expressed concerns about co-funding from an operator’s capital as not being consistent with platform neutrality.On to tax. There is novation: " Facility Provider (Relendex Lending Limited) is the contracting party in the first instance with the Borrower. Once the loan auction is filled, the Facility Provider steps back and individual lenders (by novation) enter into a direct contractual relationship with the Borrower.. Are these simple debts in the hands of an individual who lends in the auction, given that the novation appears to mean that there has already been at least one transfer before they get the loan? Are these securities? Are these covered by the Accrued Interest Scheme? If the loans are initially simple debts for those who get them in the initial auction, do they remain simple debts after a purchase on the resale market? What reporting is available to help lenders work out their capital gains tax position if each repayment, sale or purchase is a relevant CGT event that needs to be tracked and used in calculations? As you'll be aware, CGT reporting is required if the value of disposals is above four times the annual CGT allowance even if there is no taxable profit, so sales at par matter if the loan is not simple in the hands of a buyer who then sells or receives repayments (which are also disposals).
Sorry that this is probably a not so helpful answer. But we don’t feel it is our role to provide tax advice. As you may be aware HMRC has issued specific guidance exclusively relevant to peer-to-peer lending (www.gov.uk/guidance/peer-to-peer-lending). As we operate under interim permission we believe peer-to-peer tax rules shall apply but is worth consulting with your tax advisor as individual circumstances may lead to materially different tax implications with respect to otherwise identical investment and/or disposal. With respect to reporting we intend to provide comprehensive tax statements to each lender at the end of the tax year end including details on any resale activity during the reported period, if any.
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Post by wengyeeRelendex on Oct 27, 2016 8:16:05 GMT
What is the minimum investment ? You can add this info to your FAQ. Our minimum investment is £500 for all loans. Yes sure I will get this added into the FAQ.
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james
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Post by james on Oct 27, 2016 9:07:27 GMT
There is novation: " Facility Provider (Relendex Lending Limited) is the contracting party in the first instance with the Borrower. Once the loan auction is filled, the Facility Provider steps back and individual lenders (by novation) enter into a direct contractual relationship with the Borrower.. Are these simple debts in the hands of an individual who lends in the auction, given that the novation appears to mean that there has already been at least one transfer before they get the loan? Are these securities? Are these covered by the Accrued Interest Scheme? If the loans are initially simple debts for those who get them in the initial auction, do they remain simple debts after a purchase on the resale market? What reporting is available to help lenders work out their capital gains tax position if each repayment, sale or purchase is a relevant CGT event that needs to be tracked and used in calculations? As you'll be aware, CGT reporting is required if the value of disposals is above four times the annual CGT allowance even if there is no taxable profit, so sales at par matter if the loan is not simple in the hands of a buyer who then sells or receives repayments (which are also disposals). Well, it wasn't helpful to refer to a HMRC document that answered none of the tax questions I asked. I asked because the HMRC documents don't and can't answer those questions. There is no generic P2P tax treatment for CGT, nor even the whole of income tax. It varies with each platform depending on the specifics of how the platform structures its agreements and carries out its transactions. Which is why I put together a CGT-related list of those I know about here. As you'll see, the treatment varies greatly. So how will Relendex be reporting the transactions in those comprehensive tax statements? As simple debts? As securities subject to the Accrued Interest Scheme? Something else? If there are amortising loans and if the loan has been purchased at a discount or premium is Relendex going to report each capital repayment as a capital gains tax disposal with accompanying capital gain or loss, as it must if it's not a simple loan, whether that's from day one or just after a secondary market purchase? On the interest side, in a secondary market purchase situation, who gets the interest? Does the buyer pay the seller a higher capital price to represent accrued interest until the time of sale, then the buyer receive all of the interest from the borrower? If yes, is it (a security) using the Accrued Interest Scheme so that the buyer can deduct the interest they paid the seller from the interest that the borrower paid them? Or is it not using AIS, so they have to take paying tax on interest they paid someone else? Or alternatively, does the buyer just pay the capital price and the borrower payment is split between buyer and seller when the interest is paid, if it is paid? Or does the seller just lose the interest so on a sale a day before interest is due the buyer gets a month's interest for a one day holding time and the seller gets none of it? Now, if Relendex is going to provide comprehensive tax reports, then Relendex is going to need to answer these questions as part of writing those reports, so it's not as if Relendex can dodge by pretending it's personal tax advice. It's not: it's how the platform is designed and those design decisions and the tax consequences that follow have differed between platforms. It'd be no surprise if Relendex just didn't realise that this is non-trivial, since even long-established platforms have not realised that until asked and having some of the detailed issues mentioned to them.
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james
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Post by james on Oct 27, 2016 12:50:32 GMT
I think giving basic tax treatment of the platform should be a requirement of FCA authorisation. It is, the FCA mentioned describing the tax treatment for each platform as one of the P2P requirements.
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Post by wengyeeRelendex on Oct 28, 2016 15:16:16 GMT
Hi james , Thank you for your additional clarifications which certainly have opened up discussions among the directors. Our Loan Parts are simple debts and are not securities as we have been advised. All loan parts are transacted at par so no CGT liability should arise. We have not had a request yet to report transactions on a chargeable assets basis but will look into this and get back to you. If you have anymore technical/in-depth questions, please feel free to send an email over to lender-support@relendex.com for further clarification. Regards, Relendex |
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ablender
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Post by ablender on Oct 28, 2016 16:04:03 GMT
Better to do the questions here. We all need to know.
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Post by wengyeeRelendex on Nov 8, 2016 9:28:26 GMT
Good morning all, We have just put a new loan live. London Residential Investment Bridge at £750,000 (65% LTV) for 12 months, 8.75% to lenders. relendex.com/marketplaceKind regards, Relendex |
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Post by wengyeeRelendex on Nov 17, 2016 9:24:58 GMT
james, (and anyone else interested in this tax issue) Having spoken to a tax adviser as well as lenders with experience gained from lending across different platforms, it is our understanding that: 1. Peer-to-peer lending, including a Loan Part acquired through our structure is a simple debt, and as such, AIS relief would not apply as this only applies to a security. Lenders participating in primary auctions only and holding their Loan Parts to term would be considered original debt lenders, and it follows that they should report a total gross figure for interest received during the tax year. 2. However, it does look as though purchases and sales via a secondary market could potentially be liable to CGT. So strictly, if proceeds received were in excess of £44,400 for tax year 2015/16, then all such transactions should have been reported on their tax return. However, it is quite unlikely that HMRC would ask for this information, particularly if all trades are transacted at par, as is the case for our Resale Marketplace. 3. That said, our tax advisor takes the view that lenders wishing to offset the cost of purchasing a Loan Part with accrued interest can do so via peer-to-peer relief when such loan parts repay at par. This would require details of loans sold / repaid in the tax year to be matched to related purchases (including accrued interest). The Relendex systems tracks such data for each individual lender / trade and we are able to supply this data to lenders seeking peer-to-peer relief in their self-assessment filings. Our tax advisors point out that self-assessment reporting of peer-to-peer income and, particularly, peer-to-peer relief is new and there is little experience on which to reach define the filing obligation with certainty. In fact, as you may be aware some of our peer platforms do not break down individual trades on annual tax statements, forcing lenders to take the only option of reporting gross income received. If HMRC, for whatever reason, does not agree with our advisors’ view, lenders should be aware that buying secondary loan parts with accrued interest may result in some tax disadvantage relative to primary purchases and may cause an additional reporting burden. We hope that helps. We also have our Resale Marketplace up and running now where you can buy and sell Loan Parts. Kind regards, Relendex
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