oldgrumpy
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Post by oldgrumpy on Apr 11, 2016 11:47:33 GMT
I tend to admit my gains to HMRC late in the day, so it doesn't worry me yet. I want to know before Christmas what my 2015-2016 claimable losses on the plumbers and lensmakers will be. The former is my biggest loss of all on P2P. So much for the unsecure security on that one. Looks like I might have dodged most of the other "dodgy security" defaults, though I have a bit of the holiday park whose (former) director who has shown little inclination to pay anything at all for eighteen months, yet still I see his grinning face on the homepage of the establishment.
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SteveT
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Post by SteveT on Apr 11, 2016 11:56:29 GMT
I wasn't in the plumber loan but have already offset my current remaining "optical lens maker" capital against my 2015/16 AC interest income, adding a comment referencing the SAIM 12000 guidelines. Any further recovery in that loan can simply be taxed as part of my income in 2016/17.
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lobster
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Post by lobster on Apr 11, 2016 14:04:33 GMT
So am I right in thinking that p2p interest needs to be specifically entered on the tax return on the supplementary form "SA101" is that correct ? Or is that just if there are bad debts to reclaim ?
I had assumed that p2p interest would simply be lumped in with "untaxed uk interest" on the main part of the tax return ??
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SteveT
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Post by SteveT on Apr 11, 2016 14:17:26 GMT
I put it in "Untaxed UK interest", given that's exactly what it is. If HMRC want to quibble later, so be it. It doesn't change the amount of tax due!
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Post by mrclondon on Apr 11, 2016 15:29:24 GMT
So am I right in thinking that p2p interest needs to be specifically entered on the tax return on the supplementary form "SA101" is that correct ? Or is that just if there are bad debts to reclaim ? I had assumed that p2p interest would simply be lumped in with "untaxed uk interest" on the main part of the tax return ?? From 2015-16 the guidance implies that p2p income should be entered on SA101 (so that its clear to HMRC that you are not attempting to offset losses from p2p against other income.
The objective should be to minimise the risk that your return is selected for further investigation, so where the guidance suggests you do something in a particular way, you should do just that unless you have been advised otherwise by a tax expert.
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oldgrumpy
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Post by oldgrumpy on Apr 11, 2016 15:43:05 GMT
The latest email from FK confirms what I thought until recently, so it looks like plumber and lensman will be losses with no relief allowed against tax (despite being allowed as capital gains relief). How very fair!!  "The cut-off date for when a loan is treated as irrecoverable for Income Tax is only by reference to the borrower becoming unable to pay after 5th April 2015. Where the borrower ceased to be able to pay (on) or before 5th April 2015: • A claim for loss against Income Tax is not possible. • A claim for loss against Capital Gains Tax is only possible once all payments have stopped." |
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SteveT
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Post by SteveT on Apr 11, 2016 15:56:07 GMT
That strikes me as a very strange interpretation of what the guidelines SAIM 12000 actually say. The administrator was appointed for the optical lens business in mid April 2015 and it is this trigger that the guidelines point to.
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min
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Post by min on Apr 11, 2016 16:01:28 GMT
That strikes me as a very strange interpretation of what the guidelines SAIM 12000 actually say. The administrator was appointed for the optical lens business in mid April 2015 and it is this trigger that the guidelines point to. Read the FK email for yourself at p2pindependentforum.com/post/107646/thread
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SteveT
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Post by SteveT on Apr 11, 2016 16:21:34 GMT
Whatever FK's email may suggest, AC had no knowledge of problems with the Optical Lens business until 14th April 2015, when the loan was first suspended, so I am very comfortable concluding it became irrecoverable in FY 2015/16.
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oldgrumpy
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Post by oldgrumpy on Apr 11, 2016 16:46:34 GMT
Whatever FK's email may suggest, AC had no knowledge of problems with the Optical Lens business until 14th April 2015, when the loan was first suspended, so I am very comfortable concluding it became irrecoverable in FY 2015/16. Ah yes. 21 April 2015 was the first missed payment.
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SteveT
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Post by SteveT on Apr 12, 2016 7:16:19 GMT
Wow (again). So in the new world, when the platform marks a loan as written off, we or the platform will have to assign it to one of four loss categories. Presumably, we may need to submit a revision to a previously submitted tax return if we or the platform find out it was distressed in a certain way at some point in the past. I hope the platforms are going to help us by putting this all on the tax statement and don't wimp out and tell us to find a tax advisor.  . HMRC just haven't thought this through have they? No, it's a transitional issue for FY 2015/16 only. From FY 2016/17, the platforms will be required to determine for themselves when a loan becomes irrecoverable and to offset capital losses against reported income automatically. I would rather have the opportunity to make manual offsets in 2015/16 than not at all.
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SteveT
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Post by SteveT on Apr 12, 2016 9:02:46 GMT
Thanks stevet, I'm still pretty confused by the whole thing though. So to take an example, there's one or two AC loans that have called in the administrator mentioned above - I think that means that I could offset some/all of the capital against interest in my 2015/16 tax return even though they might continue to trade happily for years. The platform shouldn't feel under any obligation to mark it as bad because it continues to pay. if there is finally a real problem then, when all third party security and PGs have been exhausted and some part of the loan remains irrecoverable, they will then decide/mark/declare the remaining capital as loss. That might not happen for two or three years from now. If I decided to not take it upon myself to decide to put in my 2015/16 tax return and instead waited until the platform "called it" a few years later (in 2018/19) then presumably neither I or the platform would be allowed to offset that loss against the interest earned in 2018/19. My only option would be to submit a revision to my 2015/16 return? If I do decide to put it in my 2015/16 tax return and, as expected, there is a full recovery then I'll need to be somehow taxed on the amount I originally claimed as a loss as if it were interest? I'm going to try to keep quiet for a bit and see what the platforms say. Sounds like FK are going the extra mile. I so want to recommend P2P to friends and family but I don't want to be supporting them with filling out tax returns for the next 3 or 4 years! I don't think I can be in those loans, but my assumption is that a loan that's still happily repaying could not (yet) be considered irrecoverable, even if the company was operating under administration. At the point it later stopped paying and was deemed irrecoverable, that would clearly be in FY 2016/17 or later.
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Post by andrewholgate on Apr 13, 2016 8:12:34 GMT
When I generate tax statements they do not seem to show any (tax deductible) losses. andrewholgate this could get expensive for some people. Are you able to throw any light? What do suggest we do about this? Where can we see our losses please? For clarity, as yet they have been no declared losses. There are two cases where there is certainty of a loss but until we have pursued every avenue and closed the file, there could be a miraculous event that gets us repaid (someone won Euromillions last night....). Once the file is closed we will declare the loss. To head off any comment on this, files will not be left open indefinitely. A
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SteveT
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Post by SteveT on Apr 13, 2016 8:19:02 GMT
andrewholgate , HMRC guidance SAIM 12000 appears to show a lot of difference between a non-performing loan becoming "irrecoverable" (for income tax relief purposes, with any future recoveries then taxable as future income) and a definitive final loss being declared (with no further chance of recoveries). Will AC be following this guidance from the start of the 2016/17 tax year and declaring when you deem a non-performing loan may be regarded as "irrecoverable" for income tax relief purposes?
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Post by andrewholgate on Apr 13, 2016 8:45:09 GMT
andrewholgate , HMRC guidance SAIM 12000 appears to show a lot of difference between a non-performing loan becoming "irrecoverable" (for income tax relief purposes, with any future recoveries then taxable as future income) and a definitive final loss being declared (with no further chance of recoveries). Will AC be following this guidance from the start of the 2016/17 tax year and declaring when you deem a non-performing loan may be regarded as "irrecoverable" for income tax relief purposes? There is a lot of new tax guidance flying around at present and I am working on clarifying it all. In short, yes we will work within the law. The loose part of the law is when do they become "irrecoverable". For example, we know on two cases the business assets have been sold and that has realised a certain amount. We then have to rely on the PG's that have been pledged. At this staged we do not have full clarity on what assets the person has or hasn't got. Do we declare it as irrecoverable or do we continue to pursue the unknown to make it a known. It is complex, especially in secured lending when there are different avenues for recovery. A
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