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Post by carol167 on Feb 3, 2020 18:13:26 GMT
I've already paid tax on a large part of the interest I have recieved.
What happens now given that LW is clawing back half my interest with the punitive sell out fees ?
And as I'm no longer a tax payer now - even if I claim the fees as losses(which is questionable practise) - it's not going to save me any future tax, so I will have lost out the sellout fees PLUS 20% income tax.
So basically.... LW never really had a safeguard afterall. They just lent some interest to us for a while...
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Post by propman on Feb 4, 2020 9:35:15 GMT
I've already paid tax on a large part of the interest I have recieved.
What happens now given that LW is clawing back half my interest with the punitive sell out fees ?
And as I'm no longer a tax payer now - even if I claim the fees as losses(which is questionable practise) - it's not going to save me any future tax, so I will have lost out the sellout fees PLUS 20% income tax.
So basically.... LW never really had a safeguard afterall. They just lent some interest to us for a while...
Are you saying that they have taken some money back off you? If not, the tax rules require interest to be taxed when received so the APR going back to previous periods is not relevant. If you choose to pay the sellout fees, I agree that these are probably not tax deductible, but we have known that for a while. It is up to you whether you bear this cost or accept a lower return going forward. ore tax efficient, but means leaving your investment at risk with LW.
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Post by carol167 on Feb 4, 2020 10:17:37 GMT
I've already paid tax on a large part of the interest I have recieved.
What happens now given that LW is clawing back half my interest with the punitive sell out fees ?
And as I'm no longer a tax payer now - even if I claim the fees as losses(which is questionable practise) - it's not going to save me any future tax, so I will have lost out the sellout fees PLUS 20% income tax.
So basically.... LW never really had a safeguard afterall. They just lent some interest to us for a while...
Are you saying that they have taken some money back off you? If not, the tax rules require interest to be taxed when received so the APR going back to previous periods is not relevant. If you choose to pay the sellout fees, I agree that these are probably not tax deductible, but we have known that for a while. It is up to you whether you bear this cost or accept a lower return going forward. ore tax efficient, but means leaving your investment at risk with LW.
As far as I'm concerned - the huge interest shortfall withdrawal cost is LW clawing back some of the interest I've already had where the interest % paid was more than the 5.4% despite believing the rates we were signing up to.
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squid
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Post by squid on Feb 4, 2020 12:45:09 GMT
carol167 - you raise an interesting point. As I see it tax has already been paid on interest received in past years. Now, Lending Works is effectively reducing the rate of historic interest for those wishing to withdraw now, so this would appear to have a tax implication - as more tax would have been paid than necessary.
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IFISAcava
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Post by IFISAcava on Feb 4, 2020 13:03:13 GMT
carol167 - you raise an interesting point. As I see it tax has already been paid on interest received in past years. Now, Lending Works is effectively reducing the rate of historic interest for those wishing to withdraw now, so this would appear to have a tax implication - as more tax would have been paid than necessary. which is offset by the less tax paid currently selling fees have never been tax deductible.
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keystone
Member of DD Central
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Post by keystone on Feb 4, 2020 13:13:27 GMT
The tax issue is a non-starter with HMRC at least, as you may have paid higher tax previously but will now pay a lower amount going forward. However, if you have changed to a lower tax rate band this will be detrimental to you, the cause of this is entirely due to Lending Works and is another reason why they have treated their remaining existing customers so badly.
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squid
Member of DD Central
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Post by squid on Feb 4, 2020 13:25:10 GMT
Tax may be offset now due to lower rates, but that doesn't change the position for those withdrawing - as historic interest received but not previously withdrawn - is effectively forfeited in fees.
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