kaya
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Post by kaya on Dec 13, 2016 10:40:27 GMT
Why does the 30 day restriction exist at FS? Why not let the market - us lenders - decide whether or not we want to buy and sell within the last 30 days - and indeed later? This could allow those who are feeling anxious about a loan to exit it, and thus improve overall confidance.
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duck
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Post by duck on Dec 13, 2016 11:22:26 GMT
On the face of it trading up until the expected 'end day' seems sensible.
However due to the way the FS secondary market works allowing trading up to the end date would with certain easy manipulation allow interest payments to escape all Tax all bar one day (no I'm not going to explain how!)
Kept as is there are Tax advantages available, use sensibly, you only miss something good when it's gone!
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SteveT
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Post by SteveT on Dec 13, 2016 11:38:03 GMT
I think tax considerations are a red herring; taxation is a matter between the individual (or company) and HMRC, not the platform.
Bottom line for me is that FS loans are simple debts and, until they're either repaid or enter legal recovery, they remain simple debts regardless of any notional end date attached to them at the start. If an FS loan can be traded at 150 days then it should equally be trade-able at 180 days, or 280 days for that matter. Let the market determine fair value (whilst protecting unwary lenders with a confirmation tick box to confirm they are buying with their eyes open).
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duck
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Post by duck on Dec 13, 2016 12:14:55 GMT
I think tax considerations are a red herring; taxation is a matter between the individual (or company) and HMRC, not the platform. I disagree. If a platform is seen to be setting up and running a system that easily allows tax to be avoided would at minimum be subject to extra scrutiny, which I don't think anybody platform or investor would welcome.
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bg
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Post by bg on Dec 13, 2016 12:32:09 GMT
I think tax considerations are a red herring; taxation is a matter between the individual (or company) and HMRC, not the platform. I disagree. If a platform is seen to be setting up and running a system that easily allows tax to be avoided would at minimum be subject to extra scrutiny, which I don't think anybody platform or investor would welcome. Tax isn't avoided though. The liability is simply transferred from one person to another.
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SteveT
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Post by SteveT on Dec 13, 2016 12:35:28 GMT
I guess my question would be, if HMRC woke up tomorrow and changed the way accrued interest is taxed when selling a simple debt, would your view on the SM trading restrictions question change?
IMO, the tax loophole is skewing the FS secondary market, not the other way around, forcing lenders to discount perfectly good loans in order to sell them (even those who pay no tax in any case).
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duck
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Post by duck on Dec 13, 2016 14:03:10 GMT
I disagree. If a platform is seen to be setting up and running a system that easily allows tax to be avoided would at minimum be subject to extra scrutiny, which I don't think anybody platform or investor would welcome. Tax isn't avoided though. The liability is simply transferred from one person to another. I'm not prepared to write on an open forum what I'm hinting at but I can assure you that there is a way to reduce tax liability to one day (if no restrictions) but if you are looking at it simply from person to person yes you are correct liability is transferred.
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duck
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Post by duck on Dec 13, 2016 14:05:44 GMT
I guess my question would be, if HMRC woke up tomorrow and changed the way accrued interest is taxed when selling a simple debt, would your view on the SM trading restrictions question change? IMO, the tax loophole is skewing the FS secondary market, not the other way around, forcing lenders to discount perfectly good loans in order to sell them (even those who pay no tax in any case). Yes in principal but obviously that would depend on the changes.
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mikes1531
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Post by mikes1531 on Dec 13, 2016 18:46:57 GMT
... if HMRC woke up tomorrow and changed the way accrued interest is taxed when selling a simple debt... Does this decision rest in HMRC's hands? Or are they simply applying the rules set out in a law passed by Parliament, such that only Parliament can change the way accrued interest is taxed?
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kaya
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Post by kaya on Dec 17, 2016 11:02:45 GMT
As a matter of interest  , what would the effective rate be with, say, 1 day left to run? Could this calculation work for negative term loans? |
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sqh
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Post by sqh on Dec 17, 2016 11:39:21 GMT
As a matter of interest , what would the effective rate be with, say, 1 day left to run? Could this calculation work for negative term loans? A loan with 1 day left to run at 1% discount would have an effective rate of c.365%. A negative term loan would be infinity.
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kaya
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Post by kaya on Dec 17, 2016 12:36:18 GMT
Infinite? So would that mean then, that by buying a negative loan term with 0.1% discount, you would be infinitely wealthy upon maturity, and thus be the owner of all money that exists?
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Liz
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Post by Liz on Dec 17, 2016 12:57:09 GMT
Infinite? So would that mean then, that by buying a negative loan term with 0.1% discount, you would be infinitely wealthy upon maturity, and thus be the owner of all money that exists? In theory, yes! But you can't negatively hold a loan for a period of time.
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sqh
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Post by sqh on Dec 17, 2016 14:49:49 GMT
Infinite? So would that mean then, that by buying a negative loan term with 0.1% discount, you would be infinitely wealthy upon maturity, and thus be the owner of all money that exists? Only in your dreams  , and if you mistakenly purchased at a premium of 0.1%, that would be an infinite nightmare. 
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sqh
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Post by sqh on Dec 28, 2016 14:36:06 GMT
Loan 1026999574 is currently available at 292% for a non tax payer. Ideal for lender who hasn't utilised their PST Allowance.
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, what would the effective rate be with, say, 1 day left to run? Could this calculation work for negative term loans?
, and if you mistakenly purchased at a premium of 0.1%, that would be an infinite nightmare. 