amphoria
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Post by amphoria on Mar 31, 2019 9:54:23 GMT
P2P interest should be entered on your tax return under Interest from Gild Edged and Other Securities. However when the tax is calculated it is lumped together with Interest from UK banks and building societies. So it can be offset against your savings allowance. if you ask HMRC to do the calculation for you, they will do this automatically. From memory the first year that savings were not taxed at source was 2016/17.
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hazellend
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Post by hazellend on Mar 31, 2019 19:43:17 GMT
For those with no earned income you can get up to 18k tax free from interest.
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Post by p2plender on May 14, 2019 14:10:29 GMT
Question.
Mother in law usually rings HMRC and gives details of her p2p lending interest (usually a few thousand pounds). She's done this for a few years and her tax code is adjusted to take in extra earnings. This year she has been told by HMRC cust service that she now has to fill in a SA as her earnings are over 2500 pounds - the chap didn't even know what P2P lending was btw..
Has rules changed over there? Apologies I'm abroad and out of the UK tax loop.
Any help gladly appreciated.
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james100
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Post by james100 on May 14, 2019 16:59:34 GMT
Question. Mother in law usually rings HMRC and gives details of her p2p lending interest (usually a few thousand pounds). She's done this for a few years and her tax code is adjusted to take in extra earnings. This year she has been told by HMRC cust service that she now has to fill in a SA as her earnings are over 2500 pounds - the chap didn't even know what P2P lending was btw.. Has rules changed over there? Apologies I'm abroad and out of the UK tax loop. Any help gladly appreciated. that link should help. If she's required to file then HMRC will send her a letter. If she gets a letter then she's most likely to get them for each subsequent year too until she requests to be removed from self assessment. If she requests this, she'll need to wait until she receives a letter confirming she's been removed and from which applicable tax year her removal applies else she'll be liable for non-compliance fines. Self-assessment can be done by her directly or by you as her agent (for example).
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james100
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Post by james100 on May 14, 2019 17:24:18 GMT
For those with no earned income you can get up to 18k tax free from interest. And even more handouts this year Personal and savings 12,500 + 1,000 + 5000 plus 2,000 Divs plus 12,000 Allowance Cap Gains Total potentially 32,500 plus ISAs, if you are structured in that manner. For now, at least. It's astonishing really.
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alanh
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Post by alanh on May 14, 2019 17:31:56 GMT
What is the £5000 allowance you are referring to please?
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SteveT
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Post by SteveT on May 14, 2019 17:36:40 GMT
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alanh
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Post by alanh on May 14, 2019 17:52:43 GMT
I'm trying to work out what this means. The £5000 allowance may get reduced on a sliding scale according to the extent of any "other income" (seemingly meaning wages/pension), but am I right in thinking that if all of your income is savings interest then you get the full £5000 allowance irrespective of how much that savings income is?
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hazellend
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Post by hazellend on May 14, 2019 18:13:28 GMT
I'm trying to work out what this means. The £5000 allowance may get reduced on a sliding scale according to the extent of any "other income" (seemingly meaning wages/pension), but am I right in thinking that if all of your income is savings interest then you get the full £5000 allowance irrespective of how much that savings income is? Only up to 18.5 k of savings income then you will pay basic rate tax.
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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 May 15, 2019 0:58:55 GMT
I'm trying to work out what this means. The £5000 allowance may get reduced on a sliding scale according to the extent of any "other income" (seemingly meaning wages/pension), but am I right in thinking that if all of your income is savings interest then you get the full £5000 allowance irrespective of how much that savings income is? Only up to 18.5 k of savings income then you will pay basic rate tax. Not if you move all your savings into FISA and ISA .
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hazellend
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Post by hazellend on May 15, 2019 5:45:05 GMT
Only up to 18.5 k of savings income then you will pay basic rate tax. Not if you move all your savings into FISA and ISA . I only use stocks ISAs. For our tax situation I don’t like FISA because you can’t offset the loss and if you lose capital it is more likely to be permanent than a drop in the value of a global stock market tracker. The current tax benefits for non earners with investments is great. Shame it seems to have come at the expense of taxing earners on 100-200k till they scream
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Greenwood2
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Post by Greenwood2 on May 15, 2019 7:38:41 GMT
Not if you move all your savings into FISA and ISA . I only use stocks ISAs. For our tax situation I don’t like FISA because you can’t offset the loss and if you lose capital it is more likely to be permanent than a drop in the value of a global stock market tracker. The current tax benefits for non earners with investments is great. Shame it seems to have come at the expense of taxing earners on 100-200k till they scream Hopefully P2P losses are not that high. In most circumstances I would think the say 20% tax saving on funds in the IFISA against 20% tax relief on losses in the non-IFISA would be at worst a wash, and if P2P is where your funds are going IFISA keeps those funds out of tax for when you might want to move them somewhere else.
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hazellend
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Post by hazellend on May 15, 2019 7:49:54 GMT
I only use stocks ISAs. For our tax situation I don’t like FISA because you can’t offset the loss and if you lose capital it is more likely to be permanent than a drop in the value of a global stock market tracker. The current tax benefits for non earners with investments is great. Shame it seems to have come at the expense of taxing earners on 100-200k till they scream Hopefully P2P losses are not that high. In most circumstances I would think the say 20% tax saving on funds in the IFISA against 20% tax relief on losses in the non-IFISA would be at worst a wash, and if P2P is where your funds are going IFISA keeps those funds out of tax for when you might want to move them somewhere else. My personal opinion is that ISAs should be used for very long term investing in equities. We max out our ISAs and they are 100% invested in vanguard all world ETF, which has given us a great total return. People will have different preferences and tax situations.
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aju
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Post by aju on May 15, 2019 10:41:12 GMT
Question. Mother in law usually rings HMRC and gives details of her p2p lending interest (usually a few thousand pounds). She's done this for a few years and her tax code is adjusted to take in extra earnings. This year she has been told by HMRC cust service that she now has to fill in a SA as her earnings are over 2500 pounds - the chap didn't even know what P2P lending was btw.. Has rules changed over there? Apologies I'm abroad and out of the UK tax loop. Any help gladly appreciated. that link should help. If she's required to file then HMRC will send her a letter. If she gets a letter then she's most likely to get them for each subsequent year too until she requests to be removed from self assessment. If she requests this, she'll need to wait until she receives a letter confirming she's been removed and from which applicable tax year her removal applies else she'll be liable for non-compliance fines. Self-assessment can be done by her directly or by you as her agent (for example). That link is not quite formed correctly in the message, try this one its the same textually but it should now be clickable. Thanks for the steer james100 , I completed it and it seems I do not have to self assess. Not sure I fully understood this question about a payment or charge on a private pension. I do have a private DB pension that is paying me my work pension monthly but they tax it at source so I am guessing its not about that. I answered "none of these" option. To be honest I have usually written letters each year detailing my shares, interest etc. Recently I have been using the gateway and telling them about changes along the way it seems to work quite well. I always fully check their figures with mine at the end of each cycle. Also one can make changes using the gateway anytime during the year. This last year we moved a lot of money from normal interest accounts to ISA accounts and I advised HMRC of this with a new estimate and they adjusted tax accordingly the following month. Takes quite a while to get all the paperwork through for all the accounts we both have and some banks, Lloyds group in particular for us, don't report interest until June but my spreadsheets are usually fairly accurate using monthly figures.
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aju
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Post by aju on May 15, 2019 11:04:51 GMT
Not if you move all your savings into FISA and ISA . I only use stocks ISAs. For our tax situation I don’t like FISA because you can’t offset the loss and if you lose capital it is more likely to be permanent than a drop in the value of a global stock market tracker. The current tax benefits for non earners with investments is great. Shame it seems to have come at the expense of taxing earners on 100-200k till they scream I'd forgotten about the ISA and default losses, they are much higher in our zopa ISA's than in our invests but then the return are greater too (We have more money invested in the ISA especially as I restructured our invest side recently) and the defaults have started paying some money back too. To be fair I've usually written off the defaults by the end of the year in my mind and XIRR's are still suggesting rates better than a bank so I stay positive even in the knowledge I cannot get the default offset against tax. To be fair next year we will be paying very little tax if any on investments due to my restructure and Mrs Aju doesn't even come close to paying Tax.
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