SteveT
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Post by SteveT on May 5, 2018 8:18:02 GMT
When do reckon this becomes a loss, viable to offset any P2P profits? I guess some of us must have some. Since the site went down I'm unable to do my tax.... Since we now know that COL were not an Article 36H-compliant regulated platform, SAIM12000 precludes offsetting any COL losses against other P2P income. I guess it may be possible, if you have large enough Capital Gains elsewhere to be paying CG Tax, to offset any COL losses against your other Capital Gains. {crossed with archie}
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Post by brightspark on May 5, 2018 8:18:37 GMT
Suggest you look at
postings entitled "2017/18 Tax Return - Col interest"
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SteveT
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Post by SteveT on May 5, 2018 9:02:11 GMT
Having mused on this subject for a while, my current plan (unless / until definitive information on my COL loan book is forthcoming from the Administrators) is to wait until I actually receive funds in my bank account before declaring any interest earned as taxable income. Bar a few pounds in 2016-17, all of my lifetime COL "interest" was earned in the 2017-18 tax year and reinvested into further COL loans (I withdrew none of it). I've no access to anything that can confirm what this totalled, nor whether and when I'm likely to be able to lay my hands on it.
Given it now seems that any capital losses on COL loans will not be offset-able against other P2P income (since COL were not an FCA-authorised P2P platform), I'm disinclined to volunteer to pay income tax upfront on "interest" that I could only guesstimate and that I've no certainty I'll ever actually see.
I appreciate this may not follow the "letter of the law" but, if HMRC ever want to debate it with me, I'll ask them how I'm expected to confirm definitively the legal basis of my COL "investment", whether it truly generated any "profit" in 2017-18 and how this profit correctly should be declared in a tax return, when no information is accessible to me. At the point I know what I've earned, I will happily pay the correct tax due on it. Until then, I'm choosing to regard the funds I originally transferred into COL as a "black box" investment that's yet to deliver any definitive, quantifiable profit.
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ped
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Post by ped on May 5, 2018 10:12:46 GMT
Having mused on this subject for a while, my current plan (unless / until definitive information on my COL loan book is forthcoming from the Administrators) is to wait until I actually receive funds in my bank account before declaring any interest earned as taxable income. Bar a few pounds in 2016-17, all of my lifetime COL "interest" was earned in the 2017-18 tax year and reinvested into further COL loans (I withdrew none of it). I've no access to anything that can confirm what this totalled, nor whether and when I'm likely to be able to lay my hands on it. Given it now seems that any capital losses on COL loans will not be offset-able against other P2P income (since COL were not an FCA-authorised P2P platform), I'm disinclined to volunteer to pay income tax upfront on "interest" that I could only guesstimate and that I've no certainty I'll ever actually see. I appreciate this may not follow the "letter of the law" but, if HMRC ever want to debate it with me, I'll ask them how I'm expected to confirm definitively the legal basis of my COL "investment", whether it truly generated any "profit" in 2017-18 and how this profit correctly should be declared in a tax return, when no information is accessible to me. At the point I know what I've earned, I will happily pay the correct tax due on it. Until then, I'm choosing to regard the funds I originally transferred into COL as a "black box" investment that's yet to deliver any definitive, quantifiable profit. If COL was never authorised then the interest earned is not P2P income, so what kind of investment/saving/gamble was it. Pure punt on a website? Think I will wait for the new administrators to give us access then take a view on it. More waiting....
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Post by spareapennyor2 on May 5, 2018 17:13:37 GMT
thinking about it we need a tax statement / possible the Administrators may put some info on the next Fag`s update then another soon after your loans have been settled? for next year no good waiting till April next year no one may be home
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Post by mrclondon on May 5, 2018 20:00:22 GMT
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southport
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Post by southport on May 18, 2018 4:52:12 GMT
I'm not that well up on tax issues, however, I would have thought that as Col went into administration in the 2017-2018 tax year and the likelyhood is that there will be a haircut which is greater than interest earned during that tax year that there would be no profits earned therefore no tax payable?
Could someone more knowlegable than me please tell me if this is the case and if not why?
Thanks in advance.
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mason
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Post by mason on May 18, 2018 5:52:08 GMT
I'm not that well up on tax issues, however, I would have thought that as Col went into administration in the 2017-2018 tax year and the likelyhood is that there will be a haircut which is greater than interest earned during that tax year that there would be no profits earned therefore no tax payable?
Could someone more knowlegable than me please tell me if this is the case and if not why?
Thanks in advance.
These were not Article 36H loans (because COL was not FCA authorised), so capital losses cannot be offset against P2P interest. With most types of investment, captial losses can only be used to reduce your CGT bill and not your income tax bill. It's too early to say how the income received by lenders from COL loans would be treated for tax purposes.
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Greenwood2
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Post by Greenwood2 on May 18, 2018 5:57:10 GMT
I'm not that well up on tax issues, however, I would have thought that as Col went into administration in the 2017-2018 tax year and the likelyhood is that there will be a haircut which is greater than interest earned during that tax year that there would be no profits earned therefore no tax payable?
Could someone more knowlegable than me please tell me if this is the case and if not why?
Thanks in advance.
We don't know there will be a capital loss to offset our interest against (yet). And we don't know if it will be allowable to offset capital losses against interest on Col anyway because it was not (apparently) operating a regulated p2p platform. We do know what interest was paid (or can estimate it and say it is estimated on the tax form), so I would declare the interest paid and sort out claiming losses next tax year, when it is clearer. Or wait until closer to the tax deadline and see what progress is made.
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southport
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Post by southport on May 18, 2018 6:04:21 GMT
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nush
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Post by nush on May 18, 2018 10:43:13 GMT
When do reckon this becomes a loss, viable to offset any P2P profits? I guess some of us must have some. Since the site went down I'm unable to do my tax.... Since we now know that COL were not an Article 36H-compliant regulated platform, SAIM12000 precludes offsetting any COL losses against other P2P income. I guess it may be possible, if you have large enough Capital Gains elsewhere to be paying CG Tax, to offset any COL losses against your other Capital Gains. {crossed with archie } my bold is there a time limit on how long a capital loss can run over before it can be offset against a capital gain, example my loss is this year but i may make a large gain in 10 years from selling my land, would i be able to offset one against the other. TIA
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misscas
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Post by misscas on May 18, 2018 11:46:13 GMT
Since we now know that COL were not an Article 36H-compliant regulated platform, SAIM12000 precludes offsetting any COL losses against other P2P income. I guess it may be possible, if you have large enough Capital Gains elsewhere to be paying CG Tax, to offset any COL losses against your other Capital Gains. {crossed with archie } my bold is there a time limit on how long a capital loss can run over before it can be offset against a capital gain, example my loss is this year but i may make a large gain in 10 years from selling my land, would i be able to offset one against the other. TIA i think you can carry forward losses indefinitely assuming you have had no chargeable gains in the intervening years. On a 10 year time scale though the legislation could change.
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nush
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Post by nush on May 18, 2018 22:55:20 GMT
thanks for the reply, thats how i thought it worked but wasnt sure, i understand tax rules can change.
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Greenwood2
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Post by Greenwood2 on May 19, 2018 6:20:42 GMT
From the GOV.UK web site:
'Using losses to reduce your gain
When you report a loss, the amount is deducted from the gains you made in the same tax year.
If your total taxable gain is still above the tax-free allowance, you can deduct unused losses from previous tax years. If they reduce your gain to the tax-free allowance, you can carry forward the remaining losses to a future tax year.
Reporting losses
Claim for your loss by including it on your tax return. If you’ve never made a gain and aren’t registered for Self Assessment, you can write to HMRC instead.
You don’t have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset.
There’s an exception for losses made before 5 April 1996, which you can still claim for. You must deduct these after any more recent losses.'
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pikestaff
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Post by pikestaff on May 19, 2018 13:26:08 GMT
I agree with the last few posts, but it may be worth amplifying the conditions for and timing of CGT relief. The below applies to UK individual taxpayers who are not themselves lending as [part of] a trade.
P2P loans are generally considered to be "simple debts". This means that:
If you are the original lender, the debts are not chargeable assets but you can still claim CGT relief for losses on loans to UK resident traders, used wholly for the purpose of the trade. Property loans should be OK if used as intended. Bling loans won't qualify for relief unless you can demonstrate that they were so used.
If you are not the original lender, the debts are chargeable assets and you can claim CGT relief for losses in all cases. This would apply if you bought on the SM, or perhaps in other circumstances depending on how Collateral worked. I'm not on it so I don't know, but if for example Collateral funded the loan itself then sold it, you would not be the original lender. Likewise if you bought from an underwriter.
In either case you cannot claim until the loan has actually become irrecoverable. This means no prospect of further payment. You can't claim if the borrower is still trading but have to wait until the borrower's liquidator or adminstrator has indicated that no further payments are likely.
The assessment of what's eligible and when it can be claimed needs to be done on a loan by loan basis, so I hope you either have good records or can get what you need in due course!
In the event of losses arising because funds were not actually lent but were found to have been misappropriated by Collateral and/or its directors, I believe that they also should qualify for CGT relief, but only once there is no prospect of [further] recovery from the relevant parties.
Of course, the availability of CGT relief will be of little help to those who can't use it...
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