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Post by gusgorilla on May 19, 2018 20:14:21 GMT
Lendy Support, unlike the other P2P platforms I invest in (e.g. Funding Secure) you do not provide me with capital lost and capital recovered figures. This means I cannot offset my losses with Lendy against interest earned. I can be making a loss but you still force me to pay tax I do not owe. When do you plan to fix this problem?
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pom
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Post by pom on May 19, 2018 20:54:59 GMT
Lendy Support , unlike the other P2P platforms I invest in (e.g. Funding Secure) you do not provide me with capital lost and capital recovered figures. This means I cannot offset my losses with Lendy against interest earned. I can be making a loss but you still force me to pay tax I do not owe. When do you plan to fix this problem? Well according to Lendy no-one's lost anything yet.... and actually you should probably be glad of that as until/unless they get full permissions you can't offset losses against income anyway
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p2pmark
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Post by p2pmark on May 20, 2018 14:07:47 GMT
Lendy Support , unlike the other P2P platforms I invest in (e.g. Funding Secure) you do not provide me with capital lost and capital recovered figures. This means I cannot offset my losses with Lendy against interest earned. I can be making a loss but you still force me to pay tax I do not owe. When do you plan to fix this problem? Well according to Lendy no-one's lost anything yet.... and actually you should probably be glad of that as until/unless they get full permissions you can't offset losses against income anyway Is this definitely right? According to this from the HMRC: "Tax relief is available to peer to peer lenders who: [...] make loans through peer to peer lending platforms that are authorised by the FCA". And, although Lendy don't yet have full permissions they're still authorised by the FCA according to them. (Having said that, they then concede they are applying for "full authorisation", so it doesn't seem to be 100% clear.) Apologies if I'm going over old ground....
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warn
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Post by warn on May 20, 2018 16:42:14 GMT
...although Lendy don't yet have full permissions they're still authorised by the FCA according to them. (Having said that, they then concede they are applying for "full authorisation", so it doesn't seem to be 100% clear.) Apologies if I'm going over old ground.... According to the FCA register, Lendy has a status of Registered, but not of Authorised. Whether that matters, or is even accurate, I have no idea.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 20, 2018 17:19:43 GMT
Well according to Lendy no-one's lost anything yet.... and actually you should probably be glad of that as until/unless they get full permissions you can't offset losses against income anyway Is this definitely right? According to this from the HMRC: "Tax relief is available to peer to peer lenders who: [...] make loans through peer to peer lending platforms that are authorised by the FCA". And, although Lendy don't yet have full permissions they're still authorised by the FCA according to them. (Having said that, they then concede they are applying for "full authorisation", so it doesn't seem to be 100% clear.) Apologies if I'm going over old ground.... As I've said elsewhere the position is unclear & would require guidance from HMRC on Lendy specific status. The official guidance on loss relief states that the platform must have permission to 'operate an electronic platform in relation to lending' for loans to be eligible ie full authorisation which obviously Lendy lack. Whether the fact that they have P2P interim permission from the OFT & are seeking full permission qualifies requires clarification.
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littleoldlady
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Post by littleoldlady on May 20, 2018 20:47:13 GMT
Well according to Lendy no-one's lost anything yet.... and actually you should probably be glad of that as until/unless they get full permissions you can't offset losses against income anyway Is this definitely right? According to this from the HMRC: "Tax relief is available to peer to peer lenders who: [...] make loans through peer to peer lending platforms that are authorised by the FCA". And, although Lendy don't yet have full permissions they're still authorised by the FCA according to them. (Having said that, they then concede they are applying for "full authorisation", so it doesn't seem to be 100% clear.) Apologies if I'm going over old ground.... It's irrelevant unless you are going to claim some losses. I presume Lendy are not reporting any losses to HMRC so it would be unwise for you to do so IMHO.
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nsinvestor
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Post by nsinvestor on May 21, 2018 10:43:19 GMT
...although Lendy don't yet have full permissions they're still authorised by the FCA according to them. (Having said that, they then concede they are applying for "full authorisation", so it doesn't seem to be 100% clear.) Apologies if I'm going over old ground.... According to the FCA register, Lendy has a status of Registered, but not of Authorised. Whether that matters, or is even accurate, I have no idea. My understanding is that Lendy is authorised by the FCA. They do not have full authorisation as yet but operate under an Interim Permission - that is still authorised to undertake the regulated activities.
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nsinvestor
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Post by nsinvestor on May 21, 2018 10:53:13 GMT
Is this definitely right? According to this from the HMRC: "Tax relief is available to peer to peer lenders who: [...] make loans through peer to peer lending platforms that are authorised by the FCA". And, although Lendy don't yet have full permissions they're still authorised by the FCA according to them. (Having said that, they then concede they are applying for "full authorisation", so it doesn't seem to be 100% clear.) Apologies if I'm going over old ground.... It's irrelevant unless you are going to claim some losses. I presume Lendy are not reporting any losses to HMRC so it would be unwise for you to do so IMHO. The HMRC guidance seems to imply that the individual can determine whether a loan is irrecoverable, although there is a burden of proof if the loan is via a platform. More importantly, the HMRC guidance stipulates some conditions when a loan can be deemed irrecoverable even when there is a chance money may be collected later on. For most of our Lendy loans there is Receiver action and claims underway, so you could use this condition. When is a peer to peer loan treated as irrecoverable?
Under the legislation for income tax relief for irrecoverable peer to peer loans in certain circumstances a loan may be treated as irrecoverable for the purposes of the relief even if there may be a prospect that the lender could recover some of the amount outstanding.
This is the case for the following situations:
Loans with security
When loans are made against security, a loan may be treated as becoming irrecoverable as if the security did not exist.
Loans where legal recovery action is taken
When the borrower has entered legal recovery procedures such as liquidation, administration, receivership or bankruptcy the loan may be treated as becoming irrecoverable as if such action was not available.
Subsequent Recoveries
If a loan has been treated as irrecoverable in either of the scenarios outlined above then the relief will be given at the point where the loan becomes irrecoverable other than for the specified recovery actions.
If any value is then recovered, either through these actions or by any other means, then this recovery would then be taxed as additional interest received by the lender.
When is a peer to peer loan treated as irrecoverable?
Under the legislation for income tax relief for irrecoverable peer to peer loans in certain circumstances a loan may be treated as irrecoverable for the purposes of the relief even if there may be a prospect that the lender could recover some of the amount outstanding.
This is the case for the following situations:
Loans with security
When loans are made against security, a loan may be treated as becoming irrecoverable as if the security did not exist.
Loans where legal recovery action is taken
When the borrower has entered legal recovery procedures such as liquidation, administration, receivership or bankruptcy the loan may be treated as becoming irrecoverable as if such action was not available.
Subsequent Recoveries
If a loan has been treated as irrecoverable in either of the scenarios outlined above then the relief will be given at the point where the loan becomes irrecoverable other than for the specified recovery actions.
If any value is then recovered, either through these actions or by any other means, then this recovery would then be taxed as additional interest received by the lender.
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ilmoro
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Post by ilmoro on May 21, 2018 11:09:13 GMT
It's irrelevant unless you are going to claim some losses. I presume Lendy are not reporting any losses to HMRC so it would be unwise for you to do so IMHO. The HMRC guidance seems to imply that the individual can determine whether a loan is irrecoverable, although there is a burden of proof if the loan is via a platform. More importantly, the HMRC guidance stipulates some conditions when a loan can be deemed irrecoverable even when there is a chance money may be collected later on. For most of our Lendy loans there is Receiver action and claims underway, so you could use this condition. Yes, all true. Point LOL is making is that platforms are required to inform HMRC of loans eligible for loss relief, lenders can use the criteria to treat loans as irrecoverable but where this differs from what the platform has provided, HMRC may well require lenders to justify their claim. LOL doesnt think that it is worth the complication or potential scrutiny, others take a different approach.
The key question for this thread is whether loans on Lendy are actually eligible for loss relief full stop as they dont hold full permission. Before the criteria for whether a loan can be determined as qualifying for relief can be applied, the criteria for whether a platform qualifies & whether a lender qualifies need to be applied. Those criteria are very specific & Lendy doesnt qualify ... hence need for clarifcation from HMRC that Lendy would qualify under a historical criteria ie OFT P2P permission.
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Post by mrclondon on May 22, 2018 0:51:33 GMT
As I've said elsewhere the position is unclear & would require guidance from HMRC on Lendy specific status. The official guidance on loss relief states that the platform must have permission to 'operate an electronic platform in relation to lending' for loans to be eligible ie full authorisation which obviously Lendy lack. Whether the fact that they have P2P interim permission from the OFT & are seeking full permission qualifies requires clarification. The key question for this thread is whether loans on Lendy are actually eligible for loss relief full stop as they dont hold full permission. Before the criteria for whether a loan can be determined as qualifying for relief can be applied, the criteria for whether a platform qualifies & whether a lender qualifies need to be applied. Those criteria are very specific & Lendy doesnt qualify ... hence need for clarifcation from HMRC that Lendy would qualify under a historical criteria ie OFT P2P permission. Rightly, or wrongly, I'm pretty certain other platforms issued tax statements before they received full FCA authorisation showing capital deemed unrecoverable in prior tax years (2016-17 and in some cases 2015-16).
Anyone in possession of such tax statements from other platforms would probably be able to argue that they believed Lendy's loans that otherwise meet the criteria to be deemed unrecoverable would be covered irrespective of interim vs full permissions. (And hence would be unliklely to be hit with serious fines or face charges of tax evasion).
There again, the wording on many of the tax statements is vague and not explicity in the terms of the HMRC guidance, and it may well be the case that we have claimed loss relief incorrectly for those pre full authorisation years.
If in doubt seek the advice of a professional tax advisor.
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littleoldlady
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Post by littleoldlady on May 22, 2018 6:12:41 GMT
I'm claiming the castle as a loss. Got the printscreens as proof of the amount recovered as well as showing a 100% reduction in security value. How can this possibly not be considered a loss? You can always argue with HMRC but who would want to? Once you have attracted their attention you may need to produce documentation going back several years. Even if your affairs are perfectly in order it will be a hassle that I personally would rather avoid.
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Post by brightspark on May 22, 2018 7:41:12 GMT
The fact of the matter is that the lack of clarity with regard to the tax situation is another very good reason not to invest via Lendy. The position they are adopting in regard to non-declaration of losses is one more deliberate ploy on their part to keep the balls in the air. Some time soon this platform is going to collapse and all these relatively minor concerns about loss relief will be swept aside by the catastrophic impact of a very messy administration.
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IFISAcava
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Post by IFISAcava on May 22, 2018 8:40:54 GMT
I'm claiming the castle as a loss. Got the printscreens as proof of the amount recovered as well as showing a 100% reduction in security value. How can this possibly not be considered a loss? You can always argue with HMRC but who would want to? Once you have attracted their attention you may need to produce documentation going back several years. Even if your affairs are perfectly in order it will be a hassle that I personally would rather avoid. So would they if it's smallish sums. I'd say it's perfectly reasonable to claim as a loss the 60-odd percent of the castle capital that hasn't been repaid after the asset sold, and declare any additional repayments in the future in the unlikely circumstances that any is forthcoming. I'd be flabbergasted if HMRC argued over that.
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ilmoro
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Post by ilmoro on May 22, 2018 8:54:00 GMT
As I've said elsewhere the position is unclear & would require guidance from HMRC on Lendy specific status. The official guidance on loss relief states that the platform must have permission to 'operate an electronic platform in relation to lending' for loans to be eligible ie full authorisation which obviously Lendy lack. Whether the fact that they have P2P interim permission from the OFT & are seeking full permission qualifies requires clarification. The key question for this thread is whether loans on Lendy are actually eligible for loss relief full stop as they dont hold full permission. Before the criteria for whether a loan can be determined as qualifying for relief can be applied, the criteria for whether a platform qualifies & whether a lender qualifies need to be applied. Those criteria are very specific & Lendy doesnt qualify ... hence need for clarifcation from HMRC that Lendy would qualify under a historical criteria ie OFT P2P permission. Rightly, or wrongly, I'm pretty certain other platforms issued tax statements before they received full FCA authorisation showing capital deemed unrecoverable in prior tax years (2016-17 and in some cases 2015-16).
Anyone in possession of such tax statements from other platforms would probably be able to argue that they believed Lendy's loans that otherwise meet the criteria to be deemed unrecoverable would be covered irrespective of interim vs full permissions. (And hence would be unliklely to be hit with serious fines or face charges of tax evasion).
There again, the wording on many of the tax statements is vague and not explicity in the terms of the HMRC guidance, and it may well be the case that we have claimed loss relief incorrectly for those pre full authorisation years.
If in doubt seek the advice of a professional tax advisor.
Yes, both AC & FK released SAIM1200 based tax reports for 2016-17 and its a point I have made previously in this debate. My point is that it isnt clear based on the exisiting HMRC guidance, there is doubt and advice should be sought from HMRC/professional.
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