warn
Member of DD Central
Curmudgeon
Posts: 637 
Likes: 658
|
Post by warn on Aug 9, 2020 8:19:57 GMT
If I sell £1000 from my standard QAA at 5% discount, yielding me £950, I should be able to claim a £50 CGT loss come next April, no?
Similarly, would buying at a discount count as a CGT gain?
|
|
IFISAcava
Member of DD Central
Posts: 3,692
Likes: 3,018
|
Post by IFISAcava on Aug 9, 2020 8:57:42 GMT
If I sell £1000 from my standard QAA at 5% discount, yielding me £950, I should be able to claim a £50 CGT loss come next April, no? Similarly, would buying at a discount count as a CGT gain? I thought simple loans (i.e. loans bought at origination) weren't eligible for CGT. But loans bought on a secondary market and then resold would count towards CGT. The Q is whether when you entered the QAA it is a primary loan or secondary market. Also, you'd need to do as an aggregate so if you made any profits on reselling loans this year they would have first call on your £50 loss, AIUI.
|
|
ashtondav
Member of DD Central
Posts: 1,814
Likes: 1,092
|
Post by ashtondav on Aug 9, 2020 13:51:25 GMT
Interesting. Until you posted that, I’d assumed you treated it as a default and you could only offset it against other p2p income.
Clarification would be welcome (although I’ll be a buyer not a seller).
|
|
IFISAcava
Member of DD Central
Posts: 3,692
Likes: 3,018
|
Post by IFISAcava on Aug 9, 2020 15:12:14 GMT
Interesting. Until you posted that, I’d assumed you treated it as a default and you could only offset it against other p2p income. Clarification would be welcome (although I’ll be a buyer not a seller). I am pretty sure you cannot sell a loan at a discount and call that a default. However, what is complicated with the QAA is that several of your underlying holdings will indeed be defaulted loans, so can you claim those as losses if you sell at a discount and have therefore made a loss on he aggregate investment?
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,329
Likes: 11,549
|
Post by ilmoro on Aug 9, 2020 15:44:55 GMT
Interesting. Until you posted that, I’d assumed you treated it as a default and you could only offset it against other p2p income. Clarification would be welcome (although I’ll be a buyer not a seller). I am pretty sure you cannot sell a loan at a discount and call that a default. However, what is complicated with the QAA is that several of your underlying holdings will indeed be defaulted loans, so can you claim those as losses if you sell at a discount and have therefore made a loss on he aggregate investment? Certainly cant claim income tax relief
SAIM12060
Assignment of irrecoverable peer to peer loans
A lender will not be entitled to this relief because they assign or sell a loan at a loss.
If the lender is able to assign or sell a loan for consideration then the assumption would be that the
loan has some market value and is not irrecoverable, although it may be at risk and could have
decreased substantially in valueFurthermore the person buying the loan would not then be able to claim losses subsequently as you cannot claim losses on loans that were in legal recovery prior to purchase. Generally tax relief isnt relevant to AA holdings as the PF covers them. Hence they dont appear in the AC tax statement Id be very surprised if you can claim CGT as it is superceded by IT provisions.
|
|
|
|
Post by Ton ⓉⓞⓃ on Aug 10, 2020 8:56:22 GMT
I am pretty sure you cannot sell a loan at a discount and call that a default. However, what is complicated with the QAA is that several of your underlying holdings will indeed be defaulted loans, so can you claim those as losses if you sell at a discount and have therefore made a loss on he aggregate investment? Certainly cant claim income tax relief
SAIM12060
Assignment of irrecoverable peer to peer loans
A lender will not be entitled to this relief because they assign or sell a loan at a loss.
If the lender is able to assign or sell a loan for consideration then the assumption would be that the
loan has some market value and is not irrecoverable, although it may be at risk and could have
decreased substantially in valueFurthermore the person buying the loan would not then be able to claim losses subsequently as you cannot claim losses on loans that were in legal recovery prior to purchase. Generally tax relief isnt relevant to AA holdings as the PF covers them. Hence they dont appear in the AC tax statement Id be very surprised if you can claim CGT as it is superceded by IT provisions.
Some have asked if defaulted loans bought on the MLA could be traded, perhaps in a special market place. Then if AC opened such a market presumably this would impact the tax relief associated with irrecoverable loans, which is something I'd not fully taken on board. On the face of it, it sounds like a quicker solution if that market existed and there were enough of those who were willing to buy. But if there weren't enough buyers could those unable to sell, say, after 3months of trying, then claim they were irrecoverable and get the tax relief?
"You only pay Capital Gains Tax if your overall gains for the tax year (after deducting any losses and applying any reliefs) are above the AEA."
|
|
