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Post by p2psws on Jul 9, 2021 7:04:14 GMT
Hi
Im trying to look at ways to claw back some of the tax Ive paid on Lendy income. In my tax year 18/19 I declared all zombie loans as being a loss. My accountant was then able to wipe off all income from 17/18 onwards from tax liability.
So on years before 17/18 I paid 40% tax on Lendy income.
I can show to my accountant that I was an 'investor' rather than a 'lender' in the M1 loans. (by showing him the Admin updates which explains the difference between M1 and M2).
Were the only M1 loans with Saving Stream/Lendy: PBL027, PBL031, PBL056, DFL001, DFL002?
Whats the tax advantage (if any) of income earnt as a lender rather than an investor?
Thanks
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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 Jul 9, 2021 12:56:46 GMT
There is no relevance attached to the term investor or lender. The important point when it comes to taxation is the product structure. They were all loans paying interest so you are taxed on interest.
Model 1 loans are not article 36h loans so cannot be claimed for loss relief against P2P income.
Model 2 loans are article 36h so can be claimed but only if they meet the criteria ... the platform needs to declare them as irrecoverable which Lendy has not done.
Alternatively the loan needs to be in legal recovery ie receivership, administration, bankruptcy. (NB Lendy being in administration does not count). In theory a loan in default does not qualify, so for loans that have been refinanced but not in full it is debatable if they qualify.
Obviously not advice. I assume your accountant has read the relevant guidance & come to their own conclusions.
For loans that entered into recovery before 2017/18 you may be able amend a previous year. You may also be able to offset losses against CGT if you have insufficient P2P income.
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sam i am
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Post by sam i am on Jul 9, 2021 16:27:59 GMT
If you have any unrelieved losses then I believe you are able to roll these forward for up to 4 years to offset against future gains. These future gains may arise if you get recoveries from any of the loans which you have written off because capital recovery from these loans needs to be treated as income.
That's my understanding. No advice being given of course.
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Post by martin44 on Jul 9, 2021 21:24:19 GMT
And remind your accountant to emphasize in your favor.... hmrc will come back with further questions if they have any, or they may not.... as i found.
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Post by p2psws on Jul 10, 2021 8:24:32 GMT
For loans that entered into recovery before 2017/18 you may be able amend a previous year. You may also be able to offset losses against CGT if you have insufficient P2P income. Were there any loans that entered legal recovery before 2017/18? (If so which?) I certainly have insufficient P2P income to offset my losses. So I will offset against CGT. Not that Ill be paying CGT, other than perhaps when I sell my second property. There is no time limit if you declare a capital loss is there?
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Post by p2psws on Jul 10, 2021 8:26:22 GMT
If you have any unrelieved losses then I believe you are able to roll these forward for up to 4 years to offset against future gains. These future gains may arise if you get recoveries from any of the loans which you have written off because capital recovery from these loans needs to be treated as income.
That's my understanding. No advice being given of course.
Indeed. This is what I did. However - because of the various legal battles and 'complications', further capital recoveries will be much more than 4 years in the future!!  
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ilmoro
Member of DD Central
'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 Jul 10, 2021 9:07:04 GMT
For loans that entered into recovery before 2017/18 you may be able amend a previous year. You may also be able to offset losses against CGT if you have insufficient P2P income. Were there any loans that entered legal recovery before 2017/18? (If so which?) I certainly have insufficient P2P income to offset my losses. So I will offset against CGT. Not that Ill be paying CGT, other than perhaps when I sell my second property. There is no time limit if you declare a capital loss is there? A few, the Con***t loans being the main ones. Full list here p2pindependentforum.com/thread/12601/lendy-distressed-loans-loss-relief
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Post by p2psws on Jul 12, 2021 5:40:18 GMT
Were there any loans that entered legal recovery before 2017/18? (If so which?) I certainly have insufficient P2P income to offset my losses. So I will offset against CGT. Not that Ill be paying CGT, other than perhaps when I sell my second property. There is no time limit if you declare a capital loss is there? A few, the Con***t loans being the main ones. Full list here p2pindependentforum.com/thread/12601/lendy-distressed-loans-loss-reliefLovely - thanks ilmoro !
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ilmoro
Member of DD Central
'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 Jul 12, 2021 11:43:35 GMT
As an addendum - the administrators have now provided their own breakdown in the latest report Appendix F & G which includes whether formal insolvency proceedings have been undertaken. ( I note they dont include those where bankruptcy & possession against borrowers who are individuals has been undertaken which probably qualifies under HMRC criteria) It includes statements about whether there will be further recoveries, which may allow you to claim for loans on the basis that the 'platform' has a declared the loan to have 'become' irrecoverable, particularly in relation to loans where formal insolvency has not occurred
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sam i am
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Post by sam i am on Jul 12, 2021 14:49:17 GMT
If you have any unrelieved losses then I believe you are able to roll these forward for up to 4 years to offset against future gains. These future gains may arise if you get recoveries from any of the loans which you have written off because capital recovery from these loans needs to be treated as income.
That's my understanding. No advice being given of course.
Indeed. This is what I did. However - because of the various legal battles and 'complications', further capital recoveries will be much more than 4 years in the future!!
Yes, that's bound to be the case for many of the loans. However for now I'm keeping my fingers crossed while hoping that the recent court case will be resolved in our favour and that some or all of the withheld cash from the already realised assets will head our way before the end of this tax year.
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