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Post by d_saver on Jul 5, 2019 10:02:08 GMT
Hi All, Long time, no post (by me). I just wanted to drop off one piece of information that might be of importance to a few, in the hope I might help someone avoid my mistake. This has come to light, to me, given the significant defaults and failures in companies like Lendy and Collateral, to name the 2 biggest offenders (in my case). I have recently received a slap in the face, as where I am resident, I am told p2p loan activity is NOT in any way eligible for capital loss relief, yet the income, withdrawn, lost, or otherwise IS considered normal, taxable income (seems unfair, but it is what it is). Maybe this is not news to any of you, and I never really considered it so much of an issue (given I was expecting at least 50-70% of my investments back after defaults). Now, we know the situation in Collateral, even for the 'cannot fail' loan is dire. Lendy - Who knows. I'm guessing the outcome will be equally dire. This leaves me, in these cases, having to pay ordinary income tax on all the interest received, on paper, or in cash, now, and yet, I will likely loose the original sums invested too. Certainly, it may be a very long time before seeing any capital returned. This is a huge double whammy. I don't seek criticism for my failure to seek proper tax advice prior to making these investments (I did try, but several firms all were clueless). I own that mistake and am paying for it. But, I post this here, so that if you are engaging in this activity from outside the UK mainland, you might want to very carefully check your local tax laws to ensure you do not end up in the same situation I find myself in, i.e., owing the tax man a more significant sum than I ever got back from the p2p firms... I crawl back into my shell now  GL all. I hope we all get some news of more positive outcomes, sooner or later... |
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mrk
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Post by mrk on Jul 5, 2019 10:18:43 GMT
Even for UK residents I'm not sure Collateral losses can be claimed, since one of the requirements from HMRC is that the platform is authorised by the FCA, and Collateral was shut down precisely because they didn't have FCA authorisation. |
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Godanubis
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Post by Godanubis on Jul 5, 2019 11:40:14 GMT
Even for UK residents I'm not sure Collateral losses can be claimed, since one of the requirements from HMRC is that the platform is authorised by the FCA, and Collateral was shut down precisely because they didn't have FCA authorisation. Also the haven't yet issued any official figures to investors.
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Post by Deleted on Jul 5, 2019 13:35:21 GMT
While I understand that maybe one understanding of what happened, I suspect we may have to wait for learned counsel to confirm that view. ;-)
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mrk
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Post by mrk on Jul 5, 2019 15:29:04 GMT
While I understand that maybe one understanding of what happened, I suspect we may have to wait for learned counsel to confirm that view. ;-) Of course. I was mostly addressing this point in the OP even if you _are_ UK resident it's not like you can claim every possible loss. You still need to "very carefully check"...
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bigfoot12
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Post by bigfoot12 on Jul 6, 2019 8:37:00 GMT
This leaves me, in these cases, having to pay ordinary income tax on all the interest received, on paper, or in cash, now, and yet, I will likely loose the original sums invested too. Certainly, it may be a very long time before seeing any capital returned. This is a huge double whammy. You are saying that if you had a loan such as the AC plumbing loan which went bust in January 2015, but continues to accrue interest on the website, even though there is no chance of payment of that accrued you will have to pay tax on it, and again next year and so on? If so that sounds terrible. Would it be worth naming your country and trying to form a <My Country> Action Group to band together to pay for some advice to see if there is a solution.
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Post by dan1 on Jul 6, 2019 8:46:18 GMT
This leaves me, in these cases, having to pay ordinary income tax on all the interest received, on paper, or in cash, now, and yet, I will likely loose the original sums invested too. Certainly, it may be a very long time before seeing any capital returned. This is a huge double whammy. You are saying that if you had a loan such as the AC plumbing loan which went bust in January 2015, but continues to accrue interest on the website, even though there is no chance of payment of that accrued you will have to pay tax on it, and again next year and so on? If so that sounds terrible. Would it be worth naming your country and trying to form a <My Country> Action Group to band together to pay for some advice to see if there is a solution. Forgive me d_saver, but in answer to bigfoot12 no, tax is only due on "interest received" not accrued.
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bigfoot12
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Post by bigfoot12 on Jul 6, 2019 9:13:41 GMT
Forgive me d_saver , but in answer to bigfoot12 no, tax is only due on "interest received" not accrued. Sorry dan1 are you a tax expert in every jurisdiction in the world for every given entity?
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Post by brightspark on Jul 8, 2019 19:03:28 GMT
Forgive me d_saver , but in answer to bigfoot12 no, tax is only due on "interest received" not accrued. Sorry dan1 are you a tax expert in every jurisdiction in the world for every given entity? Ah!!. However it is possible individuals will have received interest into their client account and have reinvested it prior to platform failure. Also if capital is lost in a platform collapse would I be correct in thinking that it might only be used to offset capital gains elsewhere? Most individuals I would suggest are unlikely to have, in anything like sufficient quantity, other offsettable gains.
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Greenwood2
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Post by Greenwood2 on Jul 8, 2019 20:15:33 GMT
Edit : Reply to initial post!
A good heads up for non UK investors, but it be would really be helpful if the initial poster said where they lived so the discussion knew where it was going. It could be expanded for rules in different countries. Income Tax relief on p2p losses only became available in the UK in about 2016, before that it could only be used against capital gains, so very new here too.
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Post by martin44 on Jul 8, 2019 20:21:32 GMT
Sorry dan1 are you a tax expert in every jurisdiction in the world for every given entity? Ah!!. However it is possible individuals will have received interest into their client account and have reinvested it prior to platform failure. Also if capital is lost in a platform collapse would I be correct in thinking that it might only be used to offset capital gains elsewhere? Most individuals I would suggest are unlikely to have, in anything like sufficient quantity, other offsettable gains. my bold... I'll let you know... i'm in the process of finding out if p2p losses are able to be offset elsewhere . with regards to CGT ... as you would expect.. no one is rushing about to let me know..
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p2pfan
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Post by p2pfan on Jul 9, 2019 0:20:18 GMT
Ah!!. However it is possible individuals will have received interest into their client account and have reinvested it prior to platform failure. Also if capital is lost in a platform collapse would I be correct in thinking that it might only be used to offset capital gains elsewhere? Most individuals I would suggest are unlikely to have, in anything like sufficient quantity, other offsettable gains. my bold... I'll let you know... i'm in the process of finding out if p2p losses are able to be offset elsewhere . with regards to CGT ... as you would expect.. no one is rushing about to let me know.. Yes, I'm keen to know. My understanding was that you could offset P2P losses against all P2P income (if you're in the UK)? i.e. if you don't get £50k of your capital invested via Lendy back, you can offset it against £50k of interest from P2P investments elsewhere, which would mean no tax in that scenario? If you can only reclaim against CGT then that's completely different and potentially a game changing situation.
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