cwah
Member of DD Central
Posts: 949 
Likes: 468
|
Post by cwah on Apr 18, 2020 2:39:05 GMT
Hello,
I'm trying to figure out my tax and it's all complicated now.
Let's put a scenario for the financial year 2019-20:
- If I have £50k P2P crystallised losses.
- But then I had a gain of let say £20k in realised gain from the stock market (selling shares)
- I also know that I have £12k capital allowance for the fiscal year.
How is the capital loss calculated?
Could that be:
- £20k gain - £12k capital allowance = £8k real gain.
- Then can I offset the £8k gain to the £50k P2P loss?
- Then it means for the tax year I can declare capital loss of £42k?
And then I won't have to pay tax on any gain from the stock market until I recover from all my losses?
Thank you
|
|
iRobot
Member of DD Central
Posts: 1,680
Likes: 2,477
|
Post by iRobot on Apr 18, 2020 7:34:05 GMT
Hello, I'm trying to figure out my tax and it's all complicated now. Let's put a scenario for the financial year 2019-20: - If I have £50k P2P crystallised losses. - But then I had a gain of let say £20k in realised gain from the stock market (selling shares) - I also know that I have £12k capital allowance for the fiscal year. How is the capital loss calculated?Could that be: - £20k gain - £12k capital allowance = £8k real gain. - Then can I offset the £8k gain to the £50k P2P loss? - Then it means for the tax year I can declare capital loss of £42k? And then I won't have to pay tax on any gain from the stock market until I recover from all my losses? Thank you The answer to your question is: By an accountant / tax advisor. To be brutally blunt, the nature of your questions suggests you need professional help in this matter and whilst there are no doubt many here that are capable of providing generalised advice based on a hypothetical 'scenario', you'll be far better off seeking guided assistance from a professional who can gather a detailed understanding of your situation; and that includes both past and present circumstances as well as looking to future likelihoods.
|
|
cb25
Posts: 3,528
Likes: 2,668
|
Post by cb25 on Apr 18, 2020 11:46:57 GMT
cwah You might want to take a look at this HMRC document (PDF) explaining 'Income tax relief for irrecoverable peer to peer loans' which includes the comment "Peer to peer (P2P) tax relief for irrecoverable P2P loans can only be set against interest received by the lender on other P2P loans. It cannot be used against any other form of income." (my bold)
If in doubt, suggest you consult a professional (certainly not me!) as iRobot said.
|
|
cwah
Member of DD Central
Posts: 949
Likes: 468
|
Post by cwah on Apr 18, 2020 14:45:06 GMT
Thanks guys. That sounds quite clear now.
P2p gain and loss can't be offset against other type.
I have done my own self assessment for many years via HMRC portail. Why would I need a professional? I just have to put capital gain for stock and capital loss for p2p no?
And how much would it cost if I were to hire one?
|
|
cb25
Posts: 3,528
Likes: 2,668
|
Post by cb25 on Apr 18, 2020 15:03:20 GMT
P2p gain and loss can't be offset against other type. -that is my understanding, certainly for the P2P platforms I use (AC, FC, RS, ZP), they pay interest which goes under 'income'. HMRC explains which boxes to use on SA101 form (apologies if you already knew that)
I have done my own self assessment for many years via HMRC portail. Why would I need a professional?
-I no longer have equity investments but, when I did, I did the capital gains calculations myself and do my P2P stuff myself
-I think people (including me) say "use a professional" as it's the safest thing to say. Nobody wants to say "do it up yourself based on my (amateur) opinion" and see you got into trouble.
I just have to put capital gain for stock and capital loss for p2p no?
-that is my understanding, but as I've said I'm not a professional. If I screw my stuff up, that's on me.
And how much would it cost if I were to hire one? -you'd have to get a quote/estimate
---
If you haven't already done so, you might want to read this thread on 'Filling in the tax return'
|
|
alanh
Posts: 556
Likes: 560
|
Post by alanh on Apr 18, 2020 15:31:58 GMT
Hello, I'm trying to figure out my tax and it's all complicated now. Let's put a scenario for the financial year 2019-20: - If I have £50k P2P crystallised losses. - But then I had a gain of let say £20k in realised gain from the stock market (selling shares) - I also know that I have £12k capital allowance for the fiscal year. How is the capital loss calculated? Could that be: - £20k gain - £12k capital allowance = £8k real gain. - Then can I offset the £8k gain to the £50k P2P loss? - Then it means for the tax year I can declare capital loss of £42k? And then I won't have to pay tax on any gain from the stock market until I recover from all my losses? Thank you At first sight it looks like you are mixing up categories. The P2P losses are in the "income" category and the stock market gains are "capital gains". You can't mix and match the two as far as I am aware.
|
|
|
|
Post by bracknellboy on Apr 18, 2020 17:35:21 GMT
Thanks guys. That sounds quite clear now. P2p gain and loss can't be offset against other type.
I have done my own self assessment for many years via HMRC portail. Why would I need a professional? I just have to put capital gain for stock and capital loss for p2p no?And how much would it cost if I were to hire one? As others have mentioned prior to your above post: On the first point, P2P loss can only be offset against P2P interest. I believe there is something about being able to roll losses forward and offset against future year interest earned, but as they say "good luck with that one". Besides, read the detailed guidance to find out. On the second point. It suggests a slightly concerning lack of understanding. The tax man is not going to be interested if you have made a net loss on p2p, so there would be nowhere to put it (except in attached notes). They are only interested in net earnings.
|
|
|
|
Post by Deleted on Apr 19, 2020 9:37:11 GMT
Crystalised losses..... You might want to discuss that a great deal more. You have some flexibility within the HMRC about what you count as a "loss" and since this is all about net income you might want to balance your annual loss with your annual income so being a net zero benificiary of P2P for a tax year.
Not giving advice just a thought.
|
|
cb25
Posts: 3,528
Likes: 2,668
|
Post by cb25 on Apr 19, 2020 9:40:20 GMT
Thanks guys. That sounds quite clear now. P2p gain and loss can't be offset against other type.
I have done my own self assessment for many years via HMRC portail. Why would I need a professional? I just have to put capital gain for stock and capital loss for p2p no?And how much would it cost if I were to hire one? As others have mentioned prior to your above post: On the first point, P2P loss can only be offset against P2P interest. I believe there is something about being able to roll losses forward and offset against future year interest earned, but as they say "good luck with that one". Besides, read the detailed guidance to find out. On the second point. It suggests a slightly concerning lack of understanding. The tax man is not going to be interested if you have made a net loss on p2p, so there would be nowhere to put it (except in attached notes). They are only interested in net earnings. I've never tried to carry losses forward to another tax year, but as you suggest it is mentioned by HMRC -"Any excess relief for peer to peer bad debts available to carry forward does not need to be included on the tax return, but the lender should keep records of any carry forward relief in order to make a correct and complete claim in a tax return for a future period." here-section "SAIM 12140 Relief allowed against interest received in later tax years" in HMRC PDF mentioned above
|
|
k6
Posts: 266
Likes: 161
|
Post by k6 on Apr 19, 2020 11:01:29 GMT
Just on a side note , since wasn't mentioned in here, you can't offset losses from IFISA, only from standard account ( but we all know that )
|
|
