Balder
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Post by Balder on Apr 12, 2020 8:32:25 GMT
A question(s) if I may.
1) Can losses on Lendy be offset against interest on other P2P platforms?
2) If I am in loans that have had no repayment yet can I "assume" a certain % loss for my tax return?
3) If 1 and 2 are a yes how is it entered on the return?
Thanks in advance to someone cleverer than I.
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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 Apr 12, 2020 8:48:12 GMT
A question(s) if I may. 1) Can losses on Lendy be offset against interest on other P2P platforms? 2) If I am in loans that have had no repayment yet can I "assume" a certain % loss for my tax return? 3) If 1 and 2 are a yes how is it entered on the return? Thanks in advance to someone cleverer than I. 1) AIUI yes providing you have a surplus after offsetting all interest on Lendy first, you cant use losses against other platforms ahead of the originating platform. 2) AIUI Providing the loan meets the criteria yes. The guidance sets out the calculations for the amount of relief that can be claimed but it doesn't say it must be claimed. However, if you don't claim the full relief you wont be able to use the remainder later as carry forward is only available if you have a surplus after offseting all your interest. 3) Other income section Instruction here www.gov.uk/guidance/peer-to-peer-lendingAs ever, if unsure seek advice, this isn't advice. p2pindependentforum.com/post/268187/thread
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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 Apr 12, 2020 9:12:59 GMT
Balder I just expanded the post
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Balder
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Post by Balder on Apr 12, 2020 9:37:47 GMT
Balder I just expanded the post Thank you. So i think i will use one of the loans for 2019/20 and save the other for 2020/21 (never know might even have the real numbers by then!)
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sam i am
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Post by sam i am on Apr 12, 2020 16:41:13 GMT
Balder something else you might want to think about is how much P2P interest you might receive in the future. Depending on your personal position you may not have enough to fully offset your losses. P2P losses can only be offset against P2P income not any other income (as I suspect you already know).
If any of your losses occurred in earlier tax years you may wish to consider going back and amending these tax returns so you can offset against the interest earned in these earlier years.
Obviously I don't know your personal position, so no advice. Just something you may want to look at.
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one21
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Post by one21 on Apr 12, 2020 17:19:19 GMT
Balder something else you might want to think about is how much P2P interest you might receive in the future. Depending on your personal position you may not have enough to fully offset your losses. P2P losses can only be offset against P2P income not any other income (as I suspect you already know).
If any of your losses occurred in earlier tax years you may wish to consider going back and amending these tax returns so you can offset against the interest earned in these earlier years.
Obviously I don't know your personal position, so no advice. Just something you may want to look at.
Thanks for the reminder sam. As a 5 figure Lendy victim and now 2 years retired, I'm sure I will need to do this! Would you (or anyone) happen to know what happens to any future recovery of declared losses if income is below savings / personal allowance as not yet drawing a pension (living off investment income and consequent drawing down of savings) Edit A reasonable guess is they can be kept without needing to be declared.
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sam i am
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Post by sam i am on Apr 13, 2020 14:20:04 GMT
Balder something else you might want to think about is how much P2P interest you might receive in the future. Depending on your personal position you may not have enough to fully offset your losses. P2P losses can only be offset against P2P income not any other income (as I suspect you already know).
If any of your losses occurred in earlier tax years you may wish to consider going back and amending these tax returns so you can offset against the interest earned in these earlier years.
Obviously I don't know your personal position, so no advice. Just something you may want to look at.
Thanks for the reminder sam. As a 5 figure Lendy victim and now 2 years retired, I'm sure I will need to do this! Would you (or anyone) happen to know what happens to any future recovery of declared losses if income is below savings / personal allowance as not yet drawing a pension (living off investment income and consequent drawing down of savings) Edit A reasonable guess is they can be kept without needing to be declared.
I am not a tax adviser, but it is my understanding that future recoveries are treated as if they are P2P income in the tax year that the recovery is made. If your total income including recoveries is below your tax allowance then I believe there would be no tax to pay. You may not need to declare it (if you have no other reason to complete a tax return) but it would be sensible to keep full records just in case.
Also it is my understanding that if you write off P2P losses in an earlier year and have unrecovered losses in that year you can roll forward this unrecovered amount to offset recoveries in future years. If my memory is correct, you can roll forward for a maximum of 4 years.
I haven't gone back to check the tax rules. I'm relying on what I read several months ago, so please do your own research and take advice as necessary. As always, no advice being given here!
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cwah
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Post by cwah on Apr 18, 2020 2:53:35 GMT
Thanks for the reminder sam. As a 5 figure Lendy victim and now 2 years retired, I'm sure I will need to do this! Would you (or anyone) happen to know what happens to any future recovery of declared losses if income is below savings / personal allowance as not yet drawing a pension (living off investment income and consequent drawing down of savings) Edit A reasonable guess is they can be kept without needing to be declared.
I am not a tax adviser, but it is my understanding that future recoveries are treated as if they are P2P income in the tax year that the recovery is made. If your total income including recoveries is below your tax allowance then I believe there would be no tax to pay. You may not need to declare it (if you have no other reason to complete a tax return) but it would be sensible to keep full records just in case.
Also it is my understanding that if you write off P2P losses in an earlier year and have unrecovered losses in that year you can roll forward this unrecovered amount to offset recoveries in future years. If my memory is correct, you can roll forward for a maximum of 4 years.
I haven't gone back to check the tax rules. I'm relying on what I read several months ago, so please do your own research and take advice as necessary. As always, no advice being given here!
That's a great thing to know. Thank you. I'll consider that. Although I have to be careful because I need my last 3 years income to be as high as possible to be able to secure mortgage. Offsetting the loss would decrease the total earning needed to show to the bank you can afford the mortgage!
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Post by angel19 on Apr 18, 2020 14:06:10 GMT
Also worth remembering if your adjusted net income is in the sweet spot above £100k where your personal allowance starts to get reduced, then any allowable P2P loss may well get you 60% tax back. So careful management of losses, carry forwards and recoveries can be well worth it.
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one21
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Post by one21 on May 6, 2020 11:40:12 GMT
Balder something else you might want to think about is how much P2P interest you might receive in the future. Depending on your personal position you may not have enough to fully offset your losses. P2P losses can only be offset against P2P income not any other income (as I suspect you already know).
If any of your losses occurred in earlier tax years you may wish to consider going back and amending these tax returns so you can offset against the interest earned in these earlier years.
Obviously I don't know your personal position, so no advice. Just something you may want to look at.
Hi sam et al would you happen to know HMRC’s reasoning why loss relief couldn’t be claimed from the time the defaulted loan originated as opposed to the tax year in which default was deemed to have occurred - There’s probably some logical reason which I cannot work out as yet.
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sam i am
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Post by sam i am on May 6, 2020 12:31:55 GMT
Balder something else you might want to think about is how much P2P interest you might receive in the future. Depending on your personal position you may not have enough to fully offset your losses. P2P losses can only be offset against P2P income not any other income (as I suspect you already know).
If any of your losses occurred in earlier tax years you may wish to consider going back and amending these tax returns so you can offset against the interest earned in these earlier years.
Obviously I don't know your personal position, so no advice. Just something you may want to look at.
Hi sam et al would you happen to know HMRC’s reasoning why loss relief couldn’t be claimed from the time the defaulted loan originated as opposed to the tax year in which default was deemed to have occurred - There’s probably some logical reason which I cannot work out as yet.
I'm not a tax adviser and I certainly wouldn't want to second guess the reasoning of HMRC. But just thinking logically it would make sense that loss relief should be claimed at the time the loss occurs not at an earlier time in the same way that if you make a taxable income or gain it's taxed at the time that income is received or the gain is realised.
I would assume that the same is true with capital losses for CGT purposes although that's not something I've looked into.
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one21
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Post by one21 on May 6, 2020 19:58:20 GMT
Hi sam et al would you happen to know HMRC’s reasoning why loss relief couldn’t be claimed from the time the defaulted loan originated as opposed to the tax year in which default was deemed to have occurred - There’s probably some logical reason which I cannot work out as yet.
I'm not a tax adviser and I certainly wouldn't want to second guess the reasoning of HMRC. But just thinking logically it would make sense that loss relief should be claimed at the time the loss occurs not at an earlier time in the same way that if you make a taxable income or gain it's taxed at the time that income is received or the gain is realised.
I would assume that the same is true with capital losses for CGT purposes although that's not something I've looked into.
Many thanks for your reply sam! Looks like HMRC curtesy of yours truly Lendy have me over a barrel once again!
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sam i am
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Post by sam i am on May 8, 2020 12:42:16 GMT
I'm not a tax adviser and I certainly wouldn't want to second guess the reasoning of HMRC. But just thinking logically it would make sense that loss relief should be claimed at the time the loss occurs not at an earlier time in the same way that if you make a taxable income or gain it's taxed at the time that income is received or the gain is realised.
I would assume that the same is true with capital losses for CGT purposes although that's not something I've looked into.
Many thanks for your reply sam! Looks like HMRC curtesy of yours truly Lendy have me over a barrel once again! Thanks for your comment one21. But please remember that I'm just an investor who has no special tax expertise and looks at tax rules for my own purposes. If you think there may be a significant personal impact for you then please do your own research and/or seek professional tax advice. Tax rules are usually complex and it's possible that there are details and interpretations that I haven't picked up on. Best of luck.
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one21
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Post by one21 on May 8, 2020 13:03:01 GMT
Many thanks for your reply sam! Looks like HMRC curtesy of yours truly Lendy have me over a barrel once again! Thanks for your comment one21. But please remember that I'm just an investor who has no special tax expertise and looks at tax rules for my own purposes. If you think there may be a significant personal impact for you then please do your own research and/or seek professional tax advice. Tax rules are usually complex and it's possible that there are details and interpretations that I haven't picked up on. Best of luck. Yes I will enquire further - not very optimistic, but your comments are much appreciated!
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