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Post by hobbitcz on Apr 12, 2019 2:04:56 GMT
It's pretty simple. You can declare loss yourself (and I put attachment with explanation to my S.A.), yet if anything will be recovered, you need to put full amount recovered as your P2P profit (not just the interest) in the year when you receive the payment. You should have clear justification why you declared loans to be lost. I used Lendy's updates and whenever they indicate any form of legal action necessary or under-way, I declared those loans as defaulted. The truth is, you ideally need to offset only the earnings, so you don't have to be too aggressive in declaring loss.
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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 Apr 12, 2019 12:54:06 GMT
It's pretty simple. You can declare loss yourself (and I put attachment with explanation to my S.A.), yet if anything will be recovered, you need to put full amount recovered as your P2P profit (not just the interest) in the year when you receive the payment. You should have clear justification why you declared loans to be lost. I used Lendy's updates and whenever they indicate any form of legal action necessary or under-way, I declared those loans as defaulted. The truth is, you ideally need to offset only the earnings, so you don't have to be too aggressive in declaring loss. Only problem with that is relying on Lendy updates which have a tendency to be less than accurate. For instance, saying a receiver is involved isnt the same as saying a receiver has been appointed. Only the latter means the rights to the security have been enforced. Also Lendy updates are prone to editing ... there is one loan in recovery which has mysteriously lost a whole passage from an update. All comes down to whether you are happy that HMRC wil be happy with the rationale you have provided where it differs from the platform and you are confident in being able to argue your case with supporting evidence if challenged.
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Post by hobbitcz on Apr 22, 2019 3:45:53 GMT
The simple fact is that I invested my money, I didn't get them back by the term of the maturity of the investment and the updates are really not saying that I would get it anytime soon. So the money are loss at least for the time being, I will use them against my profits now and if by any chance they will get recovered I will put the whole recovery (not just the interest) as a profit. I really don't see reason why should HMRC have problem with that approach. It's not like I can really profit from it or anything.
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sydb
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Post by sydb on Apr 22, 2019 23:18:22 GMT
The simple fact is that I invested my money, I didn't get them back by the term of the maturity of the investment and the updates are really not saying that I would get it anytime soon. So the money are loss at least for the time being, I will use them against my profits now and if by any chance they will get recovered I will put the whole recovery (not just the interest) as a profit. I really don't see reason why should HMRC have problem with that approach. It's not like I can really profit from it or anything. You're potentially not paying tax owed. What you don't pay in tax, you can invest and profit from.
My understanding is that such things may be used if they want to get you for something else e.g. Al Capone. 
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Mucho P2P
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Post by Mucho P2P on Apr 26, 2019 8:14:59 GMT
The simple fact is that I invested my money, I didn't get them back by the term of the maturity of the investment and the updates are really not saying that I would get it anytime soon. So the money are loss at least for the time being, I will use them against my profits now and if by any chance they will get recovered I will put the whole recovery (not just the interest) as a profit. I really don't see reason why should HMRC have problem with that approach. It's not like I can really profit from it or anything. It is not as clear cut as you state. Firstly it depends on the amounts involved as it is possible to take capital gains tax losses on P2P to offset other gains from non P2P investments. Furthermore, by placing the " whole recovery (not just the interest) as a profit", you are mingling capital and interest on your tax forms. Mingle them to the detriment of HMRC and they wont be happy. Take professional advise on your above plan, for your own benefit.
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ilmoro
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Post by ilmoro on Apr 26, 2019 9:34:00 GMT
The simple fact is that I invested my money, I didn't get them back by the term of the maturity of the investment and the updates are really not saying that I would get it anytime soon. So the money are loss at least for the time being, I will use them against my profits now and if by any chance they will get recovered I will put the whole recovery (not just the interest) as a profit. I really don't see reason why should HMRC have problem with that approach. It's not like I can really profit from it or anything. It is not as clear cut as you state. Firstly it depends on the amounts involved as it is possible to take capital gains tax losses on P2P to offset other gains from non P2P investments. Furthermore, by placing the " whole recovery (not just the interest) as a profit", you are mingling capital and interest on your tax forms. Mingle them to the detriment of HMRC and they wont be happy. Take professional advise on your above plan, for your own benefit. HMRC are unlikely to have an issue as that is exactly the procedure they outline for declaring P2P income. Interest minus claimed capital loss plus recoveries on previous claimed losses. Any capital recovery of capital previously claimed as a loss is treated as interest so their is no 'mingling' of capital & interest, it is all considered interest.
I would concur on the professional advice, particularly in the case of aggressive capital loss claims that are borderline compared to SAIM12050 guidance. I would certianly seek advice on claiming losses against CGT as the SAIM 12210 appears to remove that as an option
'An irrecoverable loan that would have been eligible for capital gains relief as a capital loss under TCGA 1992 will no longer be eligible for that relief.'
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Mucho P2P
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Post by Mucho P2P on Apr 26, 2019 10:59:53 GMT
It is not as clear cut as you state. Firstly it depends on the amounts involved as it is possible to take capital gains tax losses on P2P to offset other gains from non P2P investments. Furthermore, by placing the " whole recovery (not just the interest) as a profit", you are mingling capital and interest on your tax forms. Mingle them to the detriment of HMRC and they wont be happy. Take professional advise on your above plan, for your own benefit. HMRC are unlikely to have an issue as that is exactly the procedure they outline for declaring P2P income. Interest minus claimed capital loss plus recoveries on previous claimed losses. Any capital recovery of capital previously claimed as a loss is treated as interest so their is no 'mingling' of capital & interest, it is all considered interest.
I would concur on the professional advice, particularly in the case of aggressive capital loss claims that are borderline compared to SAIM12050 guidance. I would certianly seek advice on claiming losses against CGT as the SAIM 12210 appears to remove that as an option
'An irrecoverable loan that would have been eligible for capital gains relief as a capital loss under TCGA 1992 will no longer be eligible for that relief.'
Note what you say Ilmoro and totally agree when the amounts are relatively “normal” and for an individual. In the past, my accountant has had to refer to statute for clarification of SAIM regs and my queries, as regrettably, not all is contained in SAIM. I use a major London accounting firm. As I said above in my reply to hobbittcz, it depends upon how much he has invested in P2P, not to mention his other income and how his lending is structured. If significant amounts or non-standard lending setup, then other areas of the tax code might also be used for calculating his P2P income/losses and not just the SAIM section. I treat SAIM as the general guide, however in more complex cases (such as significant amounts in P2P), professional advice should be taken (as I always do) to ensure there is not a misinterpretation of SAIM. Any professional accountants on the platform, would appreciate your comments – thx.
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Post by hobbitcz on May 24, 2019 21:44:55 GMT
It's pretty simple. You can declare loss yourself (and I put attachment with explanation to my S.A.), yet if anything will be recovered, you need to put full amount recovered as your P2P profit (not just the interest) in the year when you receive the payment. You should have clear justification why you declared loans to be lost. I used Lendy's updates and whenever they indicate any form of legal action necessary or under-way, I declared those loans as defaulted. The truth is, you ideally need to offset only the earnings, so you don't have to be too aggressive in declaring loss. Only problem with that is relying on Lendy updates which have a tendency to be less than accurate. For instance, saying a receiver is involved isnt the same as saying a receiver has been appointed. Only the latter means the rights to the security have been enforced. Also Lendy updates are prone to editing ... there is one loan in recovery which has mysteriously lost a whole passage from an update. All comes down to whether you are happy that HMRC wil be happy with the rationale you have provided where it differs from the platform and you are confident in being able to argue your case with supporting evidence if challenged. Now it got sorted, and my approach when I declared assumed loss from Lendy investment in the size of my other P2P income won't be challenged. 
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ilmoro
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Post by ilmoro on May 24, 2019 21:51:30 GMT
Only problem with that is relying on Lendy updates which have a tendency to be less than accurate. For instance, saying a receiver is involved isnt the same as saying a receiver has been appointed. Only the latter means the rights to the security have been enforced. Also Lendy updates are prone to editing ... there is one loan in recovery which has mysteriously lost a whole passage from an update. All comes down to whether you are happy that HMRC wil be happy with the rationale you have provided where it differs from the platform and you are confident in being able to argue your case with supporting evidence if challenged. Now it got sorted, and my approach when I declared assumed loss from Lendy investment in the size of my other P2P income won't be challenged. Lendy being in administration only affects old term loans & only in this current financial year if that's what you mean. Potentially might make HMRC pay more attention 🤔
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Post by masquedefer on May 25, 2019 8:50:09 GMT
I’m sure I can’t but can someone confirm that a capital loss cannot be used to reclaim tax paid in a previous tax year on p2p interest.
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Mucho P2P
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Post by Mucho P2P on May 26, 2019 9:03:29 GMT
I’m sure I can’t but can someone confirm that a capital loss cannot be used to reclaim tax paid in a previous tax year on p2p interest. Masq: You are correct, the capital losses that are arriving from Lendy can not be used to reclaim interest gains from the previous years. The easiest way [cleanest for HMRC] is to offset the [capital] losses against [interest] gains from other platforms for the next 4 years. It is possible to offset capital losses from lendy from capital gains purchases on other platforms, such as FS SM. But the amount of purchases involved would be near enough astronomical to balance the two.
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jomantha
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Post by jomantha on May 26, 2019 9:10:59 GMT
For 19/20 can it all be written off in one tax year? and I assume that can be done January time - if you arent self assessment would you need to complete a SA
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Mucho P2P
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Post by Mucho P2P on May 26, 2019 9:21:59 GMT
For 19/20 can it all be written off in one tax year? and I assume that can be done January time - if you arent self assessment would you need to complete a SA It can be written all off in one year. Depends when you send your returns in. If you are not SA, you will need to send a letter to HMRC explaining amounts and reasons. If not SA, and depending upon amounts involved, a single one-off SA might be required. Jomantha, everyone tax situation is different, PM me for clarification if needed, as your question is "open" to interpretation. I do not wish to place "opinion" in open forum which can be taken as "advice" by members when their situation is different. Allow me time for response - thx
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Post by masquedefer on May 26, 2019 9:35:27 GMT
Is there an update to this very useful “loans in default” listing at the beginning of this thread? It appears to only cover up to May 2018 . It would be most useful if the list could be updated to the 5th of April 2019 for those who are preparing their tax returns early.
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ilmoro
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Post by ilmoro on May 26, 2019 9:53:21 GMT
Is there an update to this very useful “loans in default” listing at the beginning of this thread? It appears to only cover up to May 2018 . It would be most useful if the list could be updated to the 5th of April 2019 for those who are preparing their tax returns early. I'll have a look later but I updated it in May 19 with DFL005. Do need to note some partial repayments but I think all the insolvencies are there. What do you think is missing?
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