stevio
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Post by stevio on Oct 15, 2017 19:39:54 GMT
As we can sum the amount of purchases, just wondering if anyone could give an upper and lower limit maybe for an estimate on the proportion of that is likely to be accrued interest If interest is 10-16%.......accrued interest 0-30d.......then my brain catches fire🔥 Lower limit is 0, i.e. all SM purchases on same day and following interest payment. Upper limit per loan will be capital*annual_rate*payment_frequency/12, where payment_frequency is 1 for monthly, 3 for quarterly Ignores 033 of course. So if upper limit was 30d (assuming most pay monthly) at 16% (1.33%) and lower limit zero, would it be reasonable to take an average of say 0.665% (or 0.7%) of all SM purchases as accrued interest paid?
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Post by dan1 on Oct 15, 2017 19:59:09 GMT
Lower limit is 0, i.e. all SM purchases on same day and following interest payment. Upper limit per loan will be capital*annual_rate*payment_frequency/12, where payment_frequency is 1 for monthly, 3 for quarterly Ignores 033 of course. So if upper limit was 30d (assuming most pay monthly) at 16% (1.33%) and lower limit zero, would it be reasonable to take an average of say 0.665% (or 0.7%) of all SM purchases as accrued interest paid? Whether it's reasonable or not is for the tax man to say, question is would you be happy to defend your method to HMRC? Personally, I would not. I would use the tax statement provided by ABL or trawl through all of the SM purchase emails to extract the accrued interest paid to the seller, and only present the latter to HMRC if the tax saving made it worthwhile.
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SteveT
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Post by SteveT on Oct 15, 2017 20:03:52 GMT
I keep my own record of each transaction and have netted off Accrued Interest purchased when submitting my tax return. I also included an explanatory note to the effect that the Ablrate tax statement figures are incorrect, that Ablrate acknowledge this but still appear unable to separate purchase transactions between Capital and Accrued Interest.
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blender
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Post by blender on Oct 15, 2017 20:56:56 GMT
Yes, we have argued this out with Ablrate on this forum and they have, in effect, declined to subtract that bought interest from the buyer. It is in the tax statement of both buyer and seller. Even if they wished to change it, they would then have the problem of having to treat it as negative interest in the account (cancelled when the full monthly payment is received), and that would be hard to do. FC have always done it, without HMRC problems. We here are using the Ablrate statements for 6/7, grumpily, and have long since ensured that any SM purchases into the standard accounts are made just after the monthly interest has been paid. We also have ISA accounts and have bought (transferred) through the SM into that, but of course the problem does not arise on ISA accounts. Still not good to double-report all that bought/sold interest to HMRC. Newbies beware.
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