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Post by sirpercyblakeney on Jul 20, 2024 19:15:44 GMT
In my mind the potential JC Starr Claim settlement demonstrates that the loans we made as lenders via FundingSecure are not actually P2P loans as a third interested party is involved. Therefore they are normal loans subject to loss and gain for tax purposes and can be considered with other gains / losses for the tax year.
The court instructions have also demonstrated that the large pool of loans would likely be liable for any fees to a third party. Again demonstrating that these loans are not P2P loans.
Note I have no legal training, I am an engineer, please discuss.
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iRobot
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Post by iRobot on Jul 20, 2024 20:05:36 GMT
In my mind the potential JC Starr Claim settlement demonstrates that the loans we made as lenders via FundingSecure are not actually P2P loans as a third interested party is involved. Therefore they are normal loans subject to loss and gain for tax purposes and can be considered with other gains / losses for the tax year. The court instructions have also demonstrated that the large pool of loans would likely be liable for any fees to a third party. Again demonstrating that these loans are not P2P loans. Note I have no legal training, I am an engineer, please discuss. Can you expand on that, please? Would that mean that any loan that had underwriters (either for a part of the term or the full term) would be classified as non-P2P? And how about situations where the loan was deemed 'unserviceable' or 'unenforceable' (there is probably a more technical term for it) because the platform screwed up on the paperwork or the loan was a fabrication in the first place. Can they be deemed as 'non-P2P' and therefore qualifying for taxation consideration? Outstanding questions aside, what I or anyone here thinks is largely immaterial. It's how you intend to present any losses to HMRC and then what HMRC think that matters. It would need to be a pretty tidy sum* for me to a) pay for a qualified expert opinion on the matter and then b) run the gamut with HMRC. My preference - and that of my accountant - is to not poke the bear when it comes to taxes. Keep it simple. Pay your dues. Sleep well at night. *Actually, given the collective sums involved across the many, many platforms that have buggered things up, you might consider setting up a support group where everybody chips in and gets that professional advice.
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Post by sirpercyblakeney on Jul 20, 2024 21:21:45 GMT
iRobot you have expanded better than me.
I don't have an answer to all of the legal technicalities that you raise and I do agree that the cost of the legal opinion will likely be costly and beyond the likely savings for me or anyone.
To elaborate:
1)
A P2P loan according to HMRC website
"Peer to peer lending operates on a ‘many to many’ lending model through internet intermediaries, also called a lending platform, who arrange and manage the loans.
How peer to peer lending works
Lenders place their money with a peer to peer platform which is then lent to lots of different borrowers as many small loans. Each borrower borrows small amounts from many different lenders to make up the full loan they need. The platform will collect the repayments of interest and capital from each borrower and pass them to the lenders. The platforms are regulated and authorised by the Financial Conduct Authority (FCA)*, they put lenders with money in touch with borrowers."
However by paying out to JC Starr we apparently did not lend to the borrower, we lent to an intermediary and hence broke the chain of lending outside of our p2p agreement. And P2P is a special case outside the norm and therefore by default we are not lending P2P we must be lending in a normal loan and a normal load would be subject to normal capital gains and losses.
* if the FCA needed to regulate the platform, did JC Starr by being in the middle become an unregulated platform?
2)
If the client account has been compromised by the JC Starr Claim, it seems to me that all the monies paid in and out of that account have been compromised. This has been demonstrated by the lack of repayment in a timely manner and the court putting in place a representative and a potential claim for fees from all lenders, irrespective of when they lend the money (e.g. beforehand).
3)
In addition a payment to a third party (JC Starr, etc) would demonstrate a contract has been formed. However, their is nothing to say that this is a P2P contract, in fact by default it would probably not be a p2p contract (my thoughts) and hence normal capital gains and losses would apply as this.
Finally
However, I might just present the loan as a loan in my tax return unexplained**. After all according to the last load of adverts I saw (many years ago) 'Tax should not be taxing' and I am a believer that an ordinary person should be able to fill in anything, taxes, planning permission, etc. without expert help otherwise why do we have a government. The FCA and others have proved to be self serving so why shouldn't I
**So I will probably roll the dice, as you said keep it simple. As to sleeping well at night, i don't but its the public waste that I see that really annoys me and keeps me awake, I see millions burnt.
As I said I have no legal training, I am an engineer.
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dh1
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Post by dh1 on Jul 20, 2024 22:15:38 GMT
iRobot's succinct and elegant "... present any losses to HMRC and then what HMRC think that matters ..." does it for me. That's exactly what I have done with FS losses; HMRC hasn't complained yet.
Looked at another way: what's the worst that can happen? HMRC might eventually get round to looking at the status of FS and might decide it's not p2p. It might then look at loss claims and it might decide to disallow some or all of them. It might then ask you for some money which you might eventually have to hand over.
That's far too many "mights" to be concerned about and they don't bother me at all.
... and no I'm not qualified in anything relevant to all this....
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iRobot
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Post by iRobot on Jul 21, 2024 11:46:22 GMT
... Looked at another way: what's the worst that can happen? ... please don't over think all this; life is too short.
I do agree that life is short and overthinking things can be a waste of valuable resource but would temper that with 'look before you leap' and at least understand the probability of being on the right side of any HMRC decision and, perhaps more importantly, understand the impact of being on the wrong side. Or - put another way - attempt to fully answer 'what's the worst that can happen'. Maybe I'm being overly cautious and, if so, that is almost certainly as a result of being under the HMRC's lens some twenty years ago when my PSC limited company was investigated under IR35 rules. My accountant and I were reasonably confident the company was operating wholly outside of IR35 but there was no guarantee that the HMRC inspectors would see it the same way. Had the decision gone against me, I would have been regarded as owing around £100k plus any interest that was deemed applicable. That's the sort of thing that cause me sleepless nights ![:)](//storage.proboards.com/forum/images/smiley/smiley.png) and I've since taken steps to, as far as possible ensure, it wouldn't happen again. No doubt the sums involved will have a bearing; eg: large enough to be worth taking on any risk of incurring the scrutiny of HMRC, yet affordable enough not to be too much of an encumbrance if HMRC comes knocking on the door wanting £X + y% interest from years gone by. Somewhat off-topic, perhaps, but I wonder to what degree so-called AI is being used by HMRC. (Or maybe the US' IRS service given, I think, a far higher percentage of US citizens complete their own returns?) Taking a massive volume of inputs such as found in the tax return process, calculating the norms and scanning for parameter-based anomalies would seem an ideal use case. I should have thought it theoretically possible to devise a highly automated process that accurately identifies challengeable returns and progresses that challenge through to determination without, in the majority of cases, input from a human on the agency-side. But I digress. Weigh up the pros and cons and decide but - a bit like any investment decision - do be very aware of the potential down side.
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Greenwood2
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Post by Greenwood2 on Jul 21, 2024 12:24:59 GMT
iRobot 's succinct and elegant "... present any losses to HMRC and then what HMRC think that matters ..." does it for me. That's exactly what I have done with FS losses; HMRC hasn't complained yet.
Looked at another way: what's the worst that can happen? HMRC might eventually get round to looking at the status of FS and might decide it's not p2p. It might then look at loss claims and it might decide to disallow some or all of them. It might then ask you for some money which you might eventually have to hand over.
That's far too many "mights" to be concerned about and they don't bother me at all.
... and no I'm not qualified in anything relevant to all this....
Of course if HMRC find anything, they will investigate everything, not just your dealings with FS. Better have all your ducks in a row if they come calling (metaphorically speaking).
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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 21, 2024 13:10:45 GMT
iRobot you have expanded better than me. I don't have an answer to all of the legal technicalities that you raise and I do agree that the cost of the legal opinion will likely be costly and beyond the likely savings for me or anyone. To elaborate: 1) A P2P loan according to HMRC website "Peer to peer lending operates on a ‘many to many’ lending model through internet intermediaries, also called a lending platform, who arrange and manage the loans. How peer to peer lending works Lenders place their money with a peer to peer platform which is then lent to lots of different borrowers as many small loans. Each borrower borrows small amounts from many different lenders to make up the full loan they need. The platform will collect the repayments of interest and capital from each borrower and pass them to the lenders. The platforms are regulated and authorised by the Financial Conduct Authority (FCA)*, they put lenders with money in touch with borrowers." However by paying out to JC * we apparently did not lend to the borrower, we lent to an intermediary and hence broke the chain of lending outside of our p2p agreement. And P2P is a special case outside the norm and therefore by default we are not lending P2P we must be lending in a normal loan and a normal load would be subject to normal capital gains and losses. * if the FCA needed to regulate the platform, did JC Starr by being in the middle become an unregulated platform? 2) If the client account has been compromised by the JC Starr Claim, it seems to me that all the monies paid in and out of that account have been compromised. This has been demonstrated by the lack of repayment in a timely manner and the court putting in place a representative and a potential claim for fees from all lenders, irrespective of when they lend the money (e.g. beforehand). 3) In addition a payment to a third party (JC Starr, etc) would demonstrate a contract has been formed. However, their is nothing to say that this is a P2P contract, in fact by default it would probably not be a p2p contract (my thoughts) and hence normal capital gains and losses would apply as this. Finally However, I might just present the loan as a loan in my tax return unexplained**. After all according to the last load of adverts I saw (many years ago) 'Tax should not be taxing' and I am a believer that an ordinary person should be able to fill in anything, taxes, planning permission, etc. without expert help otherwise why do we have a government. The FCA and others have proved to be self serving so why shouldn't I **So I will probably roll the dice, as you said keep it simple. As to sleeping well at night, i don't but its the public waste that I see that really annoys me and keeps me awake, I see millions burnt. As I said I have no legal training, I am an engineer. I think you might be overthinking this. The loans on FS are peer to peer agreements under article 36H. I dont think the payment to JC * has any impact on the loan contracts at all. We havent lent any money to JC *, any liability arises through an entirely separate route due to client money rules and pooling events. Specifically through a court order, not any form of contract, lending etc. It seems to me it is just a recovery cost, like the administrators fees. The position may be clearer once the Court has determined where the funds ultimately are derived from. P2P gains and losses are taxable under income tax rules, with CGT only coming into pay if there are insufficient gains to cover losses under IT. You can declare a loss at the point a loan enters formal insolvency (not the platform) with any subsequent recoveries then counting as income or at the point the platform declares the loss. (In the case of FS these are actually the same as it declares losses on the basis of loans entering insolvency) The loss is the difference between capital lent and recovered capital distributed so aby costs, fees fall before the loss is calculated. Put simply if yo invest £100 and after deductions, whatever they are, you get £50 back then the claimable loss is £50. The wider question would seem to be how a loss due to a client account deficiency is treated as that is outside the P2P regime ... should that circumstance arise then might need specialist advice. We know the client account was compromised by FS outside of the JC * case. Dont know if any of the Collateral lenders have looked at it as the circumstances already exist there. (though fraud is an additional potential factor there)
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duck
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Post by duck on Jul 21, 2024 17:13:13 GMT
We know the client account was emptied by the Curries hence the FCA going after some of the money taken out ............ but there are many more issues here where client money was extracted and it either disappeared or went into different loans than the investor thought they were buying into. Like many other issues with how Col operated the FCA seem to have brushed these issues under the carpet. I still don't fully know what actually happened after 6.5 years.
Convincing HMRC that the losses were genuine and how they were incurred would be one hell of a task!
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keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Jul 26, 2024 13:36:49 GMT
Can you expand on that, please? Would that mean that any loan that had underwriters (either for a part of the term or the full term) would be classified as non-P2P? And how about situations where the loan was deemed 'unserviceable' or 'unenforceable' (there is probably a more technical term for it) because the platform screwed up on the paperwork or the loan was a fabrication in the first place. Can they be deemed as 'non-P2P' and therefore qualifying for taxation consideration? Outstanding questions aside, what I or anyone here thinks is largely immaterial. It's how you intend to present any losses to HMRC and then what HMRC think that matters. It would need to be a pretty tidy sum* for me to a) pay for a qualified expert opinion on the matter and then b) run the gamut with HMRC. My preference - and that of my accountant - is to not poke the bear when it comes to taxes. Keep it simple. Pay your dues. Sleep well at night. *Actually, given the collective sums involved across the many, many platforms that have buggered things up, you might consider setting up a support group where everybody chips in and gets that professional advice. hmm that to me is fraud plain and simple, as I see it if you lose money due to fraud or theft you can't claim tax relief, but best not to open that can of worms as I would suggest that many of us in P2P were defrauded on loans on many of the platforms and have claimed the tax relief on the write offs. one I can think of, because the company was pretty local to me took a loan in November 2018, went into liquidation in March 2019. the borrowing at the time was > 1 years profit the other thing that struck me was in this case the liquidator didn't get paid ! Book debts of 85000 total assets 86,400 recoveries £507, unpaid administrators fees £50,000 !
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