Liz
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Post by Liz on Apr 18, 2017 21:40:45 GMT
This is happening! I've just seen Farmland in Cornwall listed at a 4% discount and was sold in an instant. Edit: just seen the same 4% discount on Lanarkshire farm too! This is going to happen a lot. fundingsecure, can I sell loans from my main account to my IFISA at a 4% discount? What if no SM loans are listed, what price can I sell to myself at? |
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dzo
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Post by dzo on Apr 18, 2017 22:00:52 GMT
Does that 'open market' rule apply to sales within ISAs as well? If not, then Liz 's abuser could sell to their ISA at the same discount as highest one currently available on the SM and then sell from their ISA at the maximum premium allowed (4%). I wonder what FS can do to stop such abuse. Firstly you are crazy to even try this because if you are caught you will be in big trouble, it was just an extreme example to highlight a possible problem. I'm surprised you are allowed to sell to your own ISA at anything other than par. What do you do if there are no loan parts for sale? Or only ridiculous premiums(2%+), that nobody is buying, then there is no market price. I think we should have been given some guidelines. Maybe we should be ultra safe and transfer our loans into our ISA's(via a sale) at par  Even par might not be considered market rate if everyone else is selling at a premium.
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dzo
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Post by dzo on Apr 18, 2017 22:04:20 GMT
This is happening! I've just seen Farmland in Cornwall listed at a 4% discount and was sold in an instant. Edit: just seen the same 4% discount on Lanarkshire farm too! This is going to happen a lot. fundingsecure , can I sell loans from my main account to my IFISA at a 4% discount? What if no SM loans are listed, what price can I sell to myself at? This is concerning. Surely FS need to stop people buying their own loans. I think I'll hold off on putting any money into mine until this is resolved.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Apr 18, 2017 22:55:57 GMT
The SM stats for this month should be stratospheric.
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Post by dan1 on Apr 18, 2017 22:59:05 GMT
SM listings at very high discounts are happening now, should anyone want to spoil the transferers party!
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Apr 19, 2017 2:01:12 GMT
Does that 'open market' rule apply to sales within ISAs as well? If not, then Liz 's abuser could sell to their ISA at the same discount as highest one currently available on the SM and then sell from their ISA at the maximum premium allowed (4%). I wonder what FS can do to stop such abuse. Firstly you are crazy to even try this because if you are caught you will be in big trouble, it was just an extreme example to highlight a possible problem. I'm surprised you are allowed to sell to your own ISA at anything other than par. What do you do if there are no loan parts for sale? Or only ridiculous premiums(2%+), that nobody is buying, then there is no market price. I think we should have been given some guidelines. Maybe we should be ultra safe and transfer our loans into our ISA's(via a sale) at par Actually, I think buying at a discount and selling back at a premium to boost your ISA pot will be fairly pointless, and this is why: You have an IFISA allowance of £20k, but you only need to use that allowance for loans approaching 31 days to maturity. Assuming, that your loans repay on time, then you have funds to buy more loans approaching 31 days. This constant recycling means you have an equivalent ISA allowance of over £200k. It's also compounding monthly and you can sell your loans from your main account at a discount. If that's not enough, then you probably have previous years ISA allowance to transfer in. That will also have an equivalent allowance of over ten-fold. The important point is make sure you keep the safest loans in your ISA.
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mason
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Post by mason on Apr 19, 2017 5:46:01 GMT
This is happening! I've just seen Farmland in Cornwall listed at a 4% discount and was sold in an instant. Edit: just seen the same 4% discount on Lanarkshire farm too! This is going to happen a lot. fundingsecure , can I sell loans from my main account to my IFISA at a 4% discount? What if no SM loans are listed, what price can I sell to myself at? This is concerning. Surely FS need to stop people buying their own loans. I think I'll hold off on putting any money into mine until this is resolved. There isn't anything inherently wrong with people buying their own loans. FS would probably have to report any behaviour like that Liz has observed to HMRC. The following post over on the Ablrate board might be of interest (the following was in relation to selling to oneself in a company account rather than an ISA, but is probably relevant to this situation too): p2pindependentforum.com/post/93382/threadOur market is set up to create a "market" price. ie. the best bid and offer are always shown. If I was asked by HMRC whether a "fair market price" was used to transfer loan parts then I can categorically say "Yes. There is a market. Those loan parts were on offer and the buyer paid the market rate." That of course assumes that there was more than one bid and offer, but generally I would expect there to be so. As far as I know, HMRC's interest gets piqued when an off-market price is used. If I spotted someone washing loan parts at a price that I think is wildly wrong I would be obliged to inquire why you have done so. (I would consider anything outside 97-103 or with a negative or excessive yield to be off-market in normal conditions)
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Apr 25, 2017 0:41:32 GMT
The SM will go mad untill everyone has their funds up to £20000 (or whatever you can transfer from other ISAs) as you will save on tax, any discount can be calculated to be net worth neutral
and end up with funds tax exempt.
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Post by markp2p on Apr 25, 2017 9:10:39 GMT
The SM will go mad untill everyone has their funds up to £20000 (or whatever you can transfer from other ISAs) as you will save on tax, any discount can be calculated to be net worth neutral and end up with funds tax exempt. Ive only just opened an ISA here but unless Im missing something there is no limit to what I can get into my FSISA. Sure I can only transfer in £20k but cant I use that to buy from my regular acct at a discount, then sell all of my loans back to my regular acct at a premium, then sell to the ISA at a discount, over and over until I have whatever amount I like in the ISA?
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Post by fundingsecure on Apr 25, 2017 16:04:49 GMT
Mark,
With the usual proviso that we cannot provide specific advice, I would like to clarify our understanding of one point.
If you repeatedly buy and sell loan parts on the secondary market you will be considered by HMRC to be a "trader" and will be subject to other restrictions and taxation, regardless of whether the "trading" is carried out within or outside of an ISA. If you were to "trade" in this way within an ISA you would loose the protection of the ISA wrapper and all interest earned would be taxed as a "trader".
If you offer a loan part for sale on the open market (i.e. secondary market) it can then be purchased by any other investor - both as regular investors or as ISA investors. Provided this is a single transaction you would not be considered as a "trader"
FundingSecure
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Post by excalibur on Apr 26, 2017 16:14:53 GMT
Mark, With the usual proviso that we cannot provide specific advice, I would like to clarify our understanding of one point. If you repeatedly buy and sell loan parts on the secondary market you will be considered by HMRC to be a "trader" and will be subject to other restrictions and taxation, regardless of whether the "trading" is carried out within or outside of an ISA. If you were to "trade" in this way within an ISA you would loose the protection of the ISA wrapper and all interest earned would be taxed as a "trader". If you offer a loan part for sale on the open market (i.e. secondary market) it can then be purchased by any other investor - both as regular investors or as ISA investors. Provided this is a single transaction you would not be considered as a "trader" FundingSecure This is very ambiguous information and far from clarification. 1) What does "repeatedly" on the SM actually mean : - a) does it mean 1000 times over a tax year, 20 times a day for 10 consecutive days? b) what if purchase and sale are in different tax years? (e.g. bought on SM in Mar, sold on SM in May) 2) How do we know precisely how close we are to being deemed a "trader" ? 3) How would HMRC even know whether someone was a "trader" when you only provide interest earned and capital gains figures? 4) You say you can transfer a loan between regular and ISA account if a single transaction, do you really mean you can only ever do a single loan in a tax year, in a lifetime and if so why does FS platform allow you to keep doing it ? 5) Have you identified any "trader" activity this tax year and if so will you inform the users now so they can consider closing accounts, or indeed allow them to reverse those transactions?
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SteveT
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Post by SteveT on Apr 26, 2017 16:22:59 GMT
This is very ambiguous information and far from clarification. 1) What does "repeatedly" on the SM actually mean : - a) does it mean 1000 times over a tax year, 20 times a day for 10 consecutive days? b) what if purchase and sale are in different tax years? (e.g. bought on SM in Mar, sold on SM in May) 2) How do we know precisely how close we are to being deemed a "trader" ? 3) How would HMRC even know whether someone was a "trader" when you only provide interest earned and capital gains figures? 4) You say you can transfer a loan between regular and ISA account if a single transaction, do you really mean you can only ever do a single loan in a tax year, in a lifetime and if so why does FS platform allow you to keep doing it ? 5) Have you identified any "trader" activity this tax year and if so will you inform the users now so they can consider closing accounts, or indeed allow them to reverse those transactions? It is HMRC that would need to answer questions 1- 4a, not FS
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stevio
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Post by stevio on Apr 26, 2017 16:23:15 GMT
Mark, With the usual proviso that we cannot provide specific advice, I would like to clarify our understanding of one point. If you repeatedly buy and sell loan parts on the secondary market you will be considered by HMRC to be a "trader" and will be subject to other restrictions and taxation, regardless of whether the "trading" is carried out within or outside of an ISA. If you were to "trade" in this way within an ISA you would loose the protection of the ISA wrapper and all interest earned would be taxed as a "trader". If you offer a loan part for sale on the open market (i.e. secondary market) it can then be purchased by any other investor - both as regular investors or as ISA investors. Provided this is a single transaction you would not be considered as a "trader" FundingSecure This is very ambiguous information and far from clarification. 1) What does "repeatedly" on the SM actually mean : - a) does it mean 1000 times over a tax year, 20 times a day for 10 consecutive days? b) what if purchase and sale are in different tax years? (e.g. bought on SM in Mar, sold on SM in May) 2) How do we know precisely how close we are to being deemed a "trader" ? 4) You say you can transfer a loan between regular and ISA account if a single transaction, do you really mean you can only ever do it once in a tax year, in a lifetime and if so why does FS platform allow you to keep doing it ? I think it is very explicit - its not up to FS to define exactly how many times you can 'push it' before HMRC deem you anything, you should be asking HMRC that and if you don't want to ask HMRC, then you probably know you shouldn't be doing it - have a bit of common sense - it's up to you if you want to risk a HMRC investigation
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09dolphin
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Post by 09dolphin on Apr 26, 2017 16:31:08 GMT
I asked if I could transfer a loan (not fully funded at the time) from my main account to my IFISA account and was told "no" on the 2nd day that IFISAs were available. Has the advice changed?
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Post by excalibur on Apr 26, 2017 16:45:41 GMT
I asked if I could transfer a loan (not fully funded at the time) from my main account to my IFISA account and was told "no" on the 2nd day that IFISAs were available. Has the advice changed? You definitely cannot *transfer* a loan until it is activated (i.e. fully funded) and the only way to make that transfer from your regular to your ISA account is via the open secondary market. That's my understanding.
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