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Post by pepperpot on Apr 26, 2015 13:27:27 GMT
I toe dipped on FK this month and I don't quite get the tax report for sales. I'm yet to receive an interest payment but have sold a couple of parts and the tax statement generated now, shows me as having declarable interest. I thought the payments on FK went to whoever holds the part on the payment day, so why do I need to declare something I haven't received? nicky? kayfundingknight? or anyone else who knows where I'm going wrong...
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Post by nicky on Apr 27, 2015 11:27:26 GMT
Hi pepperpot I have to be honest, I don't have the answer to my fingertips... but I've referred your question to a 'man who can' Either kayfundingknight or I will be back to you toot sweet with the answer.
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Post by kayfundingknight on Apr 27, 2015 12:59:09 GMT
Hi Pepperpot,
Thank you for your enquiry, sorry that it is not clear from the information we provide how and why there might be interest to be declared by the seller for loan parts.
To confirm, if you sell something on the secondary market, our Loan Exchange, for tax purposes, you are deemed to have received the accrued interest for the period between:
- the date of the previous borrower payment, if you held the loan portion at the time of that payment, or
- the date the loan started if you acquired the loan at auction and there hasn't been a borrower payment made yet, or
- the date you bought the loan on the loan exchange
AND
- the date you sold the loan on the loan exchange.
I hope that this helps to clarify the situation for you. Please contact me, kay@fundingknight.com, if you require further guidance or a more detailed explanation.
Kind regards,
Kay
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Post by pepperpot on May 7, 2015 20:36:47 GMT
Hi Pepperpot, Thank you for your enquiry, sorry that it is not clear from the information we provide how and why there might be interest to be declared by the seller for loan parts. To confirm, if you sell something on the secondary market, our Loan Exchange, for tax purposes, you are deemed to have received the accrued interest for the period between: - the date of the previous borrower payment, if you held the loan portion at the time of that payment, or - the date the loan started if you acquired the loan at auction and there hasn't been a borrower payment made yet, or - the date you bought the loan on the loan exchange AND - the date you sold the loan on the loan exchange. I hope that this helps to clarify the situation for you. Please contact me, kay@fundingknight.com, if you require further guidance or a more detailed explanation. Kind regards, Kay Thanks for the clarification of the situation, it's what I thought. Just to get my head around the point though I sold the handful of parts that I had, all before the first payment. So as it stands now I have not received any interest payments on FK (but still have interest to declare). Will the purchasers have to declare all the interest received or just the portion that accumulated since the sale? If the former, then that surely creates double entries on the books and the total interest declared by the platform will be higher than the total interest received from all borrowers, presuming there that you have to send the info of which lenders received what interest to HMRC. If the latter, well, I'm sorry but I just see that as plain wrong, for the simple reason that I now have tax to pay on interest someone else received.
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Post by kayfundingknight on May 8, 2015 11:38:57 GMT
Pepperpot
Taxation! Although no physical interest had been paid by the borrower, as you sold the loan parts before the borrowers actually made their first payment, accrued interest was due to you and is, sadly, taxable.
The purchaser of the loan part receives a tax credit on their account for "your share" this is to avoid the HMRC collecting twice.
This can seem unfair. We checked with the HMRC and this is how we have are obliged to report on the interest payments.
Kay
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Post by pepperpot on May 8, 2015 12:56:13 GMT
Pepperpot Taxation! Although no physical interest had been paid by the borrower, as you sold the loan parts before the borrowers actually made their first payment, accrued interest was due to you and is, sadly, taxable. The purchaser of the loan part receives a tax credit on their account for "your share" this is to avoid the HMRC collecting twice. This can seem unfair. We checked with the HMRC and this is how we have are obliged to report on the interest payments. Kay Thankyou for your time and informative replies.
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