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Post by chris on Oct 20, 2015 5:30:48 GMT
Isn't Wellesley similar in that it loans its on cash then sells on the loans to retail lenders? Wouldn't the same also apply if FC sells on the SM the loan parts they buy on the PM? I don't think so as there is a direct contract between the lender and borrower. FC are true P2P as I understand it.
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awk
Posts: 276
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Post by awk on Oct 20, 2015 6:39:16 GMT
I've just looked at the Tax Statement provided by FC:
First it shows "interest" and then "fees" and then shows the total interest after fees highlighted in Bold with a clear title of interest paid to you.
It then shows "bad debt" and "recoveries", with the total titled as capital gain/loss.
"promotions" don't appear - (these are cash-back and/or rewards for signing up)
Also, no mention of profit/loss on buying/selling parts at a premium/discount.
So, if I was to print it off at the end of the year, then the obvious steer would be :-
- declare interest after fees, but not bad debt
- treat bad debt as a capital loss (wont help me this year)
- ignore promotions
- ignore trading gain/loss
Makes me think about converting some future interest into a trading gain by selling my good parts on the SM at a premium - I'll need to update my spreadsheet to work it out !!
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arbster
Member of DD Central
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Post by arbster on Oct 20, 2015 6:42:02 GMT
Wouldn't the same also apply if FC sells on the SM the loan parts they buy on the PM? I don't think so as there is a direct contract between the lender and borrower. FC are true P2P as I understand it. Ah, ok, and that contract transfers from the FC entity that bought the part on the PM to the new lender investor as part of the transaction?
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Post by chris on Oct 20, 2015 6:51:06 GMT
I don't think so as there is a direct contract between the lender and borrower. FC are true P2P as I understand it. Ah, ok, and that contract transfers from the FC entity that bought the part on the PM to the new lender investor as part of the transaction? Yes, that's my understanding. You're buying the loan contract on the secondary market not lending money to FC. awk - without giving advice my understanding is that you still need to be careful there as FC's fee was a lender fee and therefore shouldn't be taken off nor allowed for in bad debt provision. Not paying tax on cash back is also FC's interpretation of the tax rules and not necessarily HMRC's. From our own talks with HMRC they don't agree with FC's interpretation but FC may have spoken to someone else and received different feedback. If in doubt you'll need to seek your own tax advice, none of the platforms are able to provide tax advice as we don't have permissions to do so.
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pikestaff
Member of DD Central
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Post by pikestaff on Oct 20, 2015 7:32:38 GMT
...What disqualifies LendInvest is it doing the lending first then borrowing itself via the platform once the loan has been made. I agree that what LendInvest is doing is probably not 36H. However, I'd quibble with your description of what it's doing - at least in substance. Assuming that it has been done right, the transfer of the economic interest in the loan effected by the trust would not be accounted for by LendInvest as a borrowing but as if it were a true sale. Likewise the lender would (if they prepared accounts) account for the transaction as a loan to the ultimate borrower and not to LendInvest. This is the same as any other effective loan transfer or subparticipation.
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