p2pfan
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Post by p2pfan on Feb 14, 2020 13:45:45 GMT
Interesting point. What kind of tax do you pay on interest received from BC? Do you classify it as p2p or some other income? Just to clarify are you saying that loses from other platforms could not be used against interest received from BC? I'd be curious to know this as well. If we can't offset losses from either other or the same platform against interest received from BC, then that has huge ramifications and makes BC an inferior investment to other platforms. Why would it be the case that BC is different to other P2P platforms? Thanks.
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tomp
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Post by tomp on Feb 14, 2020 14:06:17 GMT
Interesting point. What kind of tax do you pay on interest received from BC? Do you classify it as p2p or some other income? Just to clarify are you saying that loses from other platforms could not be used against interest received from BC? I'd be curious to know this as well. If we can't offset losses from either other or the same platform against interest received from BC, then that has huge ramifications and makes BC an inferior investment to other platforms. Why would it be the case that BC is different to other P2P platforms? Thanks. Depending on your tax situation and how you classify BC income it could be an advantage
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SteveT
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Post by SteveT on Feb 14, 2020 14:17:37 GMT
Interesting point. What kind of tax do you pay on interest received from BC? Do you classify it as p2p or some other income? Just to clarify are you saying that loses from other platforms could not be used against interest received from BC? I'd be curious to know this as well. If we can't offset losses from either other or the same platform against interest received from BC, then that has huge ramifications and makes BC an inferior investment to other platforms. Why would it be the case that BC is different to other P2P platforms? Thanks. Because it's not an FCA-regulated P2P platform and so SAIM12000 is not applicable. From the BC "Company Info" summary: " The loans that you make are not regulated by FCA" Hence, any capital losses you might incur cannot be offset against taxable income (whether from P2P or otherwise). I presume an individual could probably offset them against other capital gains (should they have any) but don't take my word for it. I use BC as a company lender and so any losses simply reduce my company's taxable profit.
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SteveT
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Post by SteveT on Feb 14, 2020 14:25:20 GMT
Because it's not an FCA-regulated P2P platform and so SAIM12000 is not applicable. From the BC "Company Info" summary: " The loans that you make are not regulated by FCA" How do you classify income received from BC for tax purposes - as P2P or something else? I am wondering if I am doing something wrong See my edit above (crossed with your question). As an individual, BC interest would be taxable as per any other interest income where tax isn't already deducted at source (eg. bank account interest)
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tomp
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Post by tomp on Feb 14, 2020 14:26:55 GMT
How do you classify income received from BC for tax purposes - as P2P or something else? I am wondering if I am doing something wrong See my edit above (crossed with your question) Sorry deleted. I think I posted my question at the same time as you posted your edit
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michaelc
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Post by michaelc on Feb 14, 2020 14:34:13 GMT
So what makes you doubt that BC still have "skin in the game" ? In Bridgecrowds "Newsletter from the Managing Director" emailed out on 5/7/19 they stated: "(iv) We will only offer loans that we have invested in or we would be happy to invest in.This shows commitment to our deals. We have skin in the game.** **subject to our own capital requirements" I read that as saying they are not in every loan any more; and hypothesise that their exposure to each loan is now a smaller amount*. Without detailed statistics from BC my soothsaying and gut instinct is all that I have to go on so I may be entirely wrong on this! The "Percentage of the loans invested by family funds 93%" statistic seems a little vague, i'm not quite sure how it should be read? *As their platform grows, a smaller BC slice of each pie seems inevitable to me. Yes I agree with that but I'm starting to think it doesn't actually matter that much. Unless their exposure is very significant in a given loan (e.g. 50%) it wouldn't seem to make direct financial sense to attempt to spend more money on recovery. I can only conclude that their reasons for ensuring good recovery are primarily about customer sentiment/reputation which is pretty important for the long term players in this game.
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p2pfan
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Post by p2pfan on Feb 14, 2020 14:34:25 GMT
I'd be curious to know this as well. If we can't offset losses from either other or the same platform against interest received from BC, then that has huge ramifications and makes BC an inferior investment to other platforms. Why would it be the case that BC is different to other P2P platforms? Thanks. Because it's not an FCA-regulated P2P platform and so SAIM12000 is not applicable. From the BC "Company Info" summary: " The loans that you make are not regulated by FCA" Hence, any capital losses you might incur cannot be offset against taxable income (whether from P2P or otherwise). I presume an individual could probably offset them against other capital gains (should they have any) but don't take my word for it. I use BC as a company lender and so any losses simply reduce my company's taxable profit. Thank you. Ouch. That makes BC significantly less favourable compared to other P2P platforms where (I presume) you can offset capital losses against taxable income. Real pity, as BC are a decent platform in many ways. It would be terrific if BC made themselves FCA regulated to give their lenders this advantage, but I suppose they've decided the time-consuming red tape resulting from FCA regulation is not worth it.
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tomp
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Post by tomp on Feb 14, 2020 14:46:16 GMT
Because it's not an FCA-regulated P2P platform and so SAIM12000 is not applicable. From the BC "Company Info" summary: " The loans that you make are not regulated by FCA" Hence, any capital losses you might incur cannot be offset against taxable income (whether from P2P or otherwise). I presume an individual could probably offset them against other capital gains (should they have any) but don't take my word for it. I use BC as a company lender and so any losses simply reduce my company's taxable profit. Thank you. Ouch. That makes BC significantly less favourable compared to other P2P platforms where (I presume) you can offset capital losses against taxable income. Real pity, as BC are a decent platform in many ways. It would be terrific if BC made themselves FCA regulated to give their lenders this advantage, but I suppose they've decided the time-consuming red tape resulting from FCA regulation is not worth it. I would say the main difference is that they are profitable as a company and have excellent track record so far
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Greenwood2
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Post by Greenwood2 on Feb 14, 2020 15:23:22 GMT
In Bridgecrowds "Newsletter from the Managing Director" emailed out on 5/7/19 they stated: "(iv) We will only offer loans that we have invested in or we would be happy to invest in.This shows commitment to our deals. We have skin in the game.** **subject to our own capital requirements" I read that as saying they are not in every loan any more; and hypothesise that their exposure to each loan is now a smaller amount*. Without detailed statistics from BC my soothsaying and gut instinct is all that I have to go on so I may be entirely wrong on this! The "Percentage of the loans invested by family funds 93%" statistic seems a little vague, i'm not quite sure how it should be read? *As their platform grows, a smaller BC slice of each pie seems inevitable to me. Yes I agree with that but I'm starting to think it doesn't actually matter that much. Unless their exposure is very significant in a given loan (e.g. 50%) it wouldn't seem to make direct financial sense to attempt to spend more money on recovery. I can only conclude that their reasons for ensuring good recovery are primarily about customer sentiment/reputation which is pretty important for the long term players in this game.Included in that is not being perceived as a soft touch for borrowers. I believe BC also make loans themselves separately from their P2P platform, they probably apply the same recovery procedures to both sides of the business. Edit: Also I assume they take the cost of recovery out of the final settlement on the loan, so as long as they get the LTVs right they don't lose anything by doing a thorough job on recoveries. (of course it would mainly be lenders that would lose out anyway).
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