mike
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Post by mike on May 31, 2016 7:47:11 GMT
Sorry yes. I'm going to draft an email that will summarise everyone's exact position in terms of how much they have paid for capital and accrued do you have it on file (it's correct in our database). A Andy, Can you also provide an example of how the "next installment amount" is calculated. I was expecting to see a number equal to 205% of the invested capital. Mike
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Post by ablrateandy on May 31, 2016 11:48:45 GMT
Yup. It's out by a factor of 650/600 at the moment. The loan is listed as 600 on the system but it should be 650. It'll be updated shortly.
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Balder
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Post by Balder on Jun 5, 2016 10:36:32 GMT
Yup. It's out by a factor of 650/600 at the moment. The loan is listed as 600 on the system but it should be 650. It'll be updated shortly. Hi ablrateandy - can you define shortly for us please? Thanks
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oldgrumpy
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Post by oldgrumpy on Jun 5, 2016 14:14:47 GMT
It's wot you tell people NOT to call you.
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Balder
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Post by Balder on Jun 15, 2016 9:00:17 GMT
Yup. It's out by a factor of 650/600 at the moment. The loan is listed as 600 on the system but it should be 650. It'll be updated shortly. Hi ablrateandy - can you define shortly for us please? Thanks Obviously must be shortly to an "elephant" and not a "Mayfly"
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nick
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Post by nick on Jun 15, 2016 14:46:20 GMT
Word of warning. I note that our initial subscribed amounts have been escalated each month so that all parts will become homogeneous and have the same yield irrespective of the month of issue. On our account statements, the incremental amounts are being labelled as accrued interest. Whilst I see the logic in this, it does have unwanted tax consequences if the incremental 'accrued' interest is not correctly classified as capital, ie it could be taxed as income.
I have raised this with Andy who has confirmed that the incremental amount when repaid will be recorded as interest and not capital and that we will need to make a manual adjustment (deduction) to get to the right interest amounts. I still strongly believe that amounts we have subscribed to as capital (the accrued interest is just notional) it should be recorded as such by the system. If a tax statement/report functionality is ever developed for the site, I don't want any of my initial capital contributions recorded as interest - I would rather not have to explain the variation to HMRC if ever queried or even have the difference trigger a query in the first place (not HMRC formally requires P2P platforms to provide such information at present, but it is just a matter of time). Of course I have zero chance of remembering to make the required adjustment in 5 years (assuming the loan is repaid), but take consolation that the amounts involved are relatively small........
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pom
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Post by pom on Jun 15, 2016 16:31:36 GMT
I'm not quite sure what you're getting at - the later tranches are effectively SM purchases, and no different to any others - so unless you've never made any other SM purchases and never intend to sell anything there either it isn't really going to make it any more complicated than it already is
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nick
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Post by nick on Jun 15, 2016 17:46:47 GMT
I'm not quite sure what you're getting at - the later tranches are effectively SM purchases, and no different to any others - so unless you've never made any other SM purchases and never intend to sell anything there either it isn't really going to make it any more complicated than it already is That's the problem, it is different to buying on the SM as we are subscribing to a new loan at 100% face value, ie what we are paying is all capital. When buying on the SM you pay for the capital and accrued interest element and will record the accrued interest once received as interest which will may be subject to tax (if the Accrued Interest Scheme applies which I don't think it does). In the case of the monthly tranches, these are freshly issued loan parts and the money used to purchase them should be treated as 100% without accrued interest which could otherwise be subject to tax.
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pom
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Post by pom on Jun 15, 2016 21:05:49 GMT
I'm not quite sure what you're getting at - the later tranches are effectively SM purchases, and no different to any others - so unless you've never made any other SM purchases and never intend to sell anything there either it isn't really going to make it any more complicated than it already is That's the problem, it is different to buying on the SM as we are subscribing to a new loan at 100% face value, ie what we are paying is all capital. When buying on the SM you pay for the capital and accrued interest element and will record the accrued interest once received as interest which will may be subject to tax (if the Accrued Interest Scheme applies which I don't think it does). In the case of the monthly tranches, these are freshly issued loan parts and the money used to purchase them should be treated as 100% without accrued interest which could otherwise be subject to tax. But we're not paying all capital - for the last tranche we paid ~103.5% for the capital we received to cover capital plus interest - it's just the same as any other SM trade that also has an interest element in the cost (ie any purchase not made on the day of a loan's most recent repayment) - just larger as they're normally less than a months worth. Still flippin' complex to work it all out (and I'm still not entirely sure I've fully worked it all out), but it's the same (in principle) for any SM trade and not just unique to this loan (edit except that having just double checked, the entries in our account history don't in fact differentiate between the premium & accrued for purchases, just sales - gah!) PS You might want to have a read of their recently updated faq entry (your comment on AIS suggests you may not have not seen it - or maybe you're not convinced by their statement that their loans "may fall under") www.ablrate.com/FAQs/View.aspx?id=75a6e0b4-0a80-443b-af9f-5eb8a2d5cbf9Edit - PPS I'm still not entirely sure why you're so worried about reporting it correctly to HMRC tho...it's accrued interest we've paid, not received, so it's a relief you can claim rather than something they'll slap your wrists for not declaring. Worst case you'll be paying too much tax
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nick
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Post by nick on Jun 15, 2016 22:17:27 GMT
That's the problem, it is different to buying on the SM as we are subscribing to a new loan at 100% face value, ie what we are paying is all capital. When buying on the SM you pay for the capital and accrued interest element and will record the accrued interest once received as interest which will may be subject to tax (if the Accrued Interest Scheme applies which I don't think it does). In the case of the monthly tranches, these are freshly issued loan parts and the money used to purchase them should be treated as 100% without accrued interest which could otherwise be subject to tax. But we're not paying all capital - for the last tranche we paid ~103.5% for the capital we received to cover capital plus interest - it's just the same as any other SM trade that also has an interest element in the cost (ie any purchase not made on the day of a loan's most recent repayment) - just larger as they're normally less than a months worth. Still flippin' complex to work it all out (and I'm still not entirely sure I've fully worked it all out), but it's the same for any SM trade and not just unique to this loan PS You might want to have a read of their recently updated faq entry (your comment on AIS suggests you may not have not seen it - or maybe you're not convinced by their statement that their loans "may fall under") www.ablrate.com/FAQs/View.aspx?id=75a6e0b4-0a80-443b-af9f-5eb8a2d5cbf9I was under impression that each loan tranche loan was created and issued directly to me and not previously held by anyone else and thus there is no true interest accrued day 1. The notional attached "accrued interest" is really just a mechanism to ensure that the yield on the 'face value' remains unchanged. Therefore I would classify the total amount as principal rather accrued interest. Thanks for the reference to the revised FAQ. I had previously read these, but I remain unconvinced that these loan parts (or any P2P loan parts) fall under the AIS namely as it is questionable that they fall under the definition of securities to which AIS applies (which is probably why Ablrate are non-committal on whether they believe AIS applies and why different platforms have various views - FS comes to mind). To make things even more complex, there are exemptions from the AIS for small holdings of less than £5k in any individual 'security'. Anyway, I'm probably making a mountain out of a molehill but I find the whole issue very taxing..............
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pom
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Post by pom on Jun 16, 2016 12:56:08 GMT
Well yeah I have to say that while I was answering I did wonder how ABL are treating this accrued interest they're receiving.... At the end of the day we can only do the best we can with the info we have available (we are after all only signing up to the fact that to the best of our knowledge the figures we're providing are correct)and ABL have listed it on the statements as accrued. Which given it'd be a claim for relief rather than additional tax, having it classed as income rather than capital is better (for me anyway as a 40% taxpayer) I guess. Mind you if I weren't already having to do full calculations for CGT due to transactions elsewhere (annoying when my ABL gain for last year is ~£10 that won't even be taxable!) I might well be tempted not to bother claiming it. Generally I've found that if you tell/ask HMRC when you're not sure of anything they're really helpful so given the amounts are (for me so far) pretty small I may just state my assumptions somewhere..especially as I'm pretty certain I'm going to have to tick the "provisional data" boxes anyway...(if the amounts had been large I'd probably have written to them). Especially as I'll have to include all my CGT calcs anyway (may just paste the faq into my spreadsheet before uploading!) unless we suddenly get good usable statements provided to us that I can use instead.... (and having been through my figures a few times now I can see why it's proving difficult)
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mike
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Post by mike on Jul 2, 2016 7:25:51 GMT
ablrateandy when is the June 28th investment going to be taken?
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pom
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Post by pom on Jul 2, 2016 7:39:54 GMT
Err... it WAS taken
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Post by ablrateandy on Jul 2, 2016 10:27:27 GMT
ablrateandy when is the June 28th investment going to be taken? It was. If I missed you please mail me!
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nick
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Post by nick on Aug 4, 2016 17:20:32 GMT
When is this loan going to be tradeable on the SM?
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