corto
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Post by corto on Jan 20, 2020 21:11:17 GMT
Technically, buying a loan at a discount and selling it at par (or a smaller discount) incurs a capital gain.
If a loan bought at a discount amortises it pays small amounts of the gain back every so often. These would be taxable events.
The tax statement does not mention these gains and locating the relevant transactions in the CSV is not entirely straight forward.
How do others deal with that in their tax returns?
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IFISAcava
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Post by IFISAcava on Jan 20, 2020 22:52:17 GMT
Technically, buying a loan at a discount and selling it at par (or a smaller discount) incurs a capital gain. If a loan bought at a discount amortises it pays small amounts of the gain back every so often. These would be taxable events. The tax statement does not mention these gains and locating the relevant transactions in the CSV is not entirely straight forward. How do others deal with that in their tax returns? I ignore it because it is so tiny Theoretically as the turnover is quite high (and may add to other capital disposals) you should report it if it is £48,000 turnover in total, but - really, do you think HMRC is going to get upset because you didn't declare a few pounds or tens of pounds of capital gains that would take literally days to calculate (and could easily also be a net loss if you factor in those sold at a lower premium/discount to what they were bought at)? Declare it if the platforms give you a figure, of course, but otherwise? Nope. Having said that, since I moved all P2P to ISAs it disappears as a problem. (If you are a super big hitter, the it might be different of course, assuming you can buy and sell enough on the secondary market)
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corto
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Post by corto on Jan 20, 2020 23:04:27 GMT
Not a big hitter .. it's 15£ max at AC
I saw Abl mentions the problem on their tax statements (and suggests to do the calculations if necessary)
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iren
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Post by iren on Jan 20, 2020 23:47:51 GMT
My understanding is that because these are simple loans rather than securitised assets, a capital gain arises only when a loan has been repaid in full.
Personally, I have a log of initial events for such gains and losses on my spreadsheet, which each new tax year are either carried forward or crystallised into my gains and losses for the year.
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