sydb
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Post by sydb on Jan 9, 2020 23:08:36 GMT
Remember the London loan court wranglings? We were nearly pulled into court on a personal level for just lending money. Do you really want to gift that potential to someone?
I always wondered whether all responsibility for the original lending of a loan part passes to someone buying it on the secondary market or whether it stays with the original lender. I don't think there is a simple answer (regardless of Bendy's Ts&Cs).
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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 Jan 10, 2020 13:19:41 GMT
DFL032 repaid more cash yesterday so sums to withdraw for those invested.
Now down to £150k plus accrued interest so might actually get out at a profit. Current LTV 24%. £1000 on SM if anyone fancies a punt. <snigger> 😁
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bloodycat
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Post by bloodycat on Jan 10, 2020 14:46:00 GMT
DFL032 repaid more cash yesterday so sums to withdraw for those invested. Oh so it did. would be nice if they had actually told us.
They seem to have jumped straight from issuing loan updates only when something happens to no updates whatsoever.
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Post by red_panda on Jan 11, 2020 0:21:36 GMT
Are there any loans and their principal that one can write off as a loss already since Lendy went into administration?
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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 Jan 11, 2020 10:02:46 GMT
Are there any loans and their principal that one can write off as a loss already since Lendy went into administration?
FYI Lendy being in administration isnt relevant to the ability to write loans off.
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sam i am
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Post by sam i am on Jan 11, 2020 10:57:17 GMT
Are there any loans and their principal that one can write off as a loss already since Lendy went into administration?
First things first. I'm not a tax expert and I'm not offering any advice. However I'll pass on my own personal experience.
This is SAIM 12000, part of the HMRC Savings and Investment Manual. Section 12050 covers "When is a peer to peer loan treated as irrecoverable?"
Within this section there is this statement:
"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."
(Note that this refers to the loans going into administration which is completely separate from the P2P platform going into administration.)
My personal experience is that I fully wrote off all loans that met the terms of the statement above. That is 100% write off regardless of the prospects of recovery. I did this for both P2P platforms I use (i.e. it wasn't a Lendy specific thing).
I hadn't taken this approach originally as when the first few losses started coming through I figured that I would write them off when the platforms crystallized the losses. What I didn't realise back then was that platforms would be loath to crystalise losses (allowing bad loans to limp on forever and never write them off), that losses would mount to the levels we now see and that my P2P interest would dramatically reduce (due to sale, payback and default of loans).
When I realised what was going on I figured this approach wouldn't work. My losses were now vastly exceeding my income and as the HMRC document says: "This tax relief allows P2P loans that become irrecoverable to be relieved by the lender against interest that they receive from other P2P loans." i.e. P2P losses can only be offset against P2P income. I was in a position where I wouldn't achieve full tax relief because I wouldn't be earning enough future P2P interest.
So I decided to backdate the write off to the point at which loans first went into administration. I did this by amending my tax returns for both 2017/18 and 2018/19 even though I had already submitted them. This meant that I could offset the losses against the interest in these tax years. Nothing strange going on here. I was just going back and doing something I would have been perfectly entitled to have done when I made my original submissions.
Even so, I am still in a position where my P2P losses exceed my income and I am carrying forward a loss to future tax years (which I can use to offset future income).
A very important point to note is about subsequent recoveries. The HMRC document says this: "If relief has been claimed because the principal of a loan has been treated as becoming irrecoverable, but the lender subsequently recovers any or all of the principal of the loan, then the lender should treat any amount received as peer to peer (P2P) interest received at the time of the recovery."
If loans are written off then any future capital recovery is treated as income and is taxable. I therefore do expect to have significant future income as I expect that there will be some capital recovery from some of the loans. I will need to track this through future tax returns.
Overall I have offset losses from a large number of loans and have based this on statements from the P2P platforms about when they have formally appointed administrators, receivers or liquidators for each loan. You would need to do your own research to determine which loans these are but there are some helpful threads to guide you on this forum. (Edit: I see ilmoro just posted the relevant one for Lendy.)
I will repeated again that none of this is advice. There is a lot of detail within SAIM 12000 about when tax relief is available and how it operates that goes beyond the general points I have made above and your personal situation may be very different from mine. Seek professional advice if you are unsure.
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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 Jan 11, 2020 11:31:57 GMT
Are there any loans and their principal that one can write off as a loss already since Lendy went into administration?
I will repeated again that none of this is advice. There is a lot of detail within SAIM 12000 about when tax relief is available and how it operates that goes beyond the general points I have made above and your personal situation may be very different from mine. Seek professional advice if you are unsure.
One important point of detail is that given the way Lendy operated, not always suspending loans that were in legal recovery but still had interest on account, any loans purchased on the SM have to be checked as SM purchases after the date legal recovery was intiated are not eligible for loss relief.
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Post by hobbitcz on Jan 17, 2020 18:23:38 GMT
Sorry for honestly answering questions people have here. I feel sorry for anyone who lost money in this endeavour. I did as well, I am ending up most probably on net loss. I just feel lucky I managed to get my exposition down to 1/6th before they put the loans on suspended and I couldn't sell the rest. But no point to lie each other in the face in the name of compassion. This is a blunder and we don't get all our money back. This is the hard cold truth and it's better to brace ourselves than keep unfounded hopes and be in stress for all the time. Sorry but who are you that we should take what you are saying as meaning anything of note. There are many on here with fantastic detective and deductive skills with thousands of meaningful and insightful posts that I will wait and see their analysis before making any judgments before that of a relatively new poster. However were you to provide your valid credentials to show you actually have merit with you opinion then I will of course take that into consideration. So, how do my May assumptions look now? (46% portfolio value, with 10% of net return on non-performing safe to assume, 20% it will be good, over 30% let's celebrate). And btw I am an advisor to the board of the biggest P2P lenders in Czech Republic and worked in business consulting and M&A analysis for many years. But honestly I would prefer if I was wrong on this one.
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quidco
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Post by quidco on Jan 18, 2020 17:14:12 GMT
Sorry but who are you that we should take what you are saying as meaning anything of note. There are many on here with fantastic detective and deductive skills with thousands of meaningful and insightful posts that I will wait and see their analysis before making any judgments before that of a relatively new poster. However were you to provide your valid credentials to show you actually have merit with you opinion then I will of course take that into consideration. So, how do my May assumptions look now? (46% portfolio value, with 10% of net return on non-performing safe to assume, 20% it will be good, over 30% let's celebrate). And btw I am an advisor to the board of the biggest P2P lenders in Czech Republic and worked in business consulting and M&A analysis for many years. But honestly I would prefer if I was wrong on this one. Will you be advising your P2P business to adopt the lucrative “waterfall model” behind investors backs?
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copacetic
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Post by copacetic on Feb 4, 2020 16:37:42 GMT
From an email today from the administrators regarding a request to the court for directions on Lendys distribution waterfall:
Basically if we don't challenge the distribution waterfall then p2p lenders get screwed in favour of creditors, if we do challenge it we get screwed in favour of the administrators and legal firms with a possible bonus screwing in favour of creditors. Gotta love the legal robbery that is administration.
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one21
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Post by one21 on Feb 4, 2020 16:51:48 GMT
From an email today from the administrators regarding a request to the court for directions on Lendys distribution waterfall: Basically if we don't challenge the distribution waterfall then p2p lenders get screwed in favour of creditors, if we do challenge it we get screwed in favour of the administrators and legal firms with a possible bonus screwing in favour of creditors. Gotta love the legal robbery that is administration. It's outrageous they’re having to seek legal direction for aspects that they should already be proficient in. If they need advice, they should pay for it out of their own company profits not charge us c£500 / hr for it!
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micky
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Post by micky on Feb 4, 2020 16:56:59 GMT
To me, obviously this update is something that they have have been waiting to send. It is now certain that action is going to be taken by LAG, so why can't the two sides now work together, to quickly and as cheaply as possible agree with the courts direction the right result.
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agent69
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Post by agent69 on Feb 4, 2020 17:10:58 GMT
To me, obviously this update is something that they have have been waiting to send. It is now certain that action is going to be taken by LAG, so why can't the two sides now work together, to quickly and as cheaply as possible agree with the courts direction the right result. To be fair to the administrators, they are very much caught between a rock and a hard place.
If they ignore the waterfall the creditors will challenge it, and if they honour it the investors will complain. What more can they do?
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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 Feb 4, 2020 17:31:39 GMT
From an email today from the administrators regarding a request to the court for directions on Lendys distribution waterfall: Basically if we don't challenge the distribution waterfall then p2p lenders get screwed in favour of creditors, if we do challenge it we get screwed in favour of the administrators and legal firms with a possible bonus screwing in favour of creditors. Gotta love the legal robbery that is administration. It's outrageous they’re having to seek legal direction for aspects that they should already be proficient in. If they need advice, they should pay for it out of their own company profits not charge us c£500 / hr for it! Not really. They are Insolvency practioners not contract lawyers. Well outside their detailed knowledge which is why they took advice. That advice has been challenged so they go to the legal arbiter, the courts. Correct procedure but they probably should have done it at the start as it was clear there were a number of contentious issues.
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quidco
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Post by quidco on Feb 4, 2020 19:12:51 GMT
To me, obviously this update is something that they have have been waiting to send. It is now certain that action is going to be taken by LAG, so why can't the two sides now work together, to quickly and as cheaply as possible agree with the courts direction the right result. To be fair to the administrators, they are very much caught between a rock and a hard place.
If they ignore the waterfall the creditors will challenge it, and if they honour it the investors will complain. What more can they do? But for example with the AML acitvities in whose interests were they acting then? So there is clearly a third way where they will take direction from regulators and Lendy clearly mis-sold the investments as investors were not notified of the risk to capital caused by the waterfall model. For example, on the investment page for each loan where was information about the impact defaults would have on the return of capital beyond cost of recovery?
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