Post by min on Apr 5, 2016 15:29:53 GMT
Sorry if this appears elsewhere - I looked but couldn't find it.
Had a very helpful email from those nice people at FK the other day. I thought others might benefit from its contents.
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HMRC have now published their final guidance on how and when losses on Peer to Peer (P2P) loans can be used to reduce tax liabilities.
The new rules are very generous in that a loan can be treated as irrecoverable for tax purposes once there is no reasonable prospect of the recovery of the loan from the borrower. The ability for the investor to be repaid from other sources, such as via personal guarantees or security, can be ignored.
Tax Year 2015/16, ending on the 5th April 2016
In the current tax year - 2015/2016 - claims for loss need to be made by you, as the investor. Losses can be claimed against either Income Tax or Capital Gains Tax, and claimed differently for different loans.
New Tax Year 2016/17 - The changes
* From 6th April, the loss claims will normally be made by the P2P platform, for example FundingKnight.
* From 6th April, losses will automatically be treated as losses for Income Tax and offset against your income with us.
If losses in a tax year exceed your income with us, you can use the balance against P2P income from other platforms in the same tax year and, to the extent that you still have residual losses, then against subsequent tax years. If you wish to do so then you must notify HMRC.
*******
Had a very helpful email from those nice people at FK the other day. I thought others might benefit from its contents.
********
HMRC have now published their final guidance on how and when losses on Peer to Peer (P2P) loans can be used to reduce tax liabilities.
The new rules are very generous in that a loan can be treated as irrecoverable for tax purposes once there is no reasonable prospect of the recovery of the loan from the borrower. The ability for the investor to be repaid from other sources, such as via personal guarantees or security, can be ignored.
Tax Year 2015/16, ending on the 5th April 2016
In the current tax year - 2015/2016 - claims for loss need to be made by you, as the investor. Losses can be claimed against either Income Tax or Capital Gains Tax, and claimed differently for different loans.
New Tax Year 2016/17 - The changes
* From 6th April, the loss claims will normally be made by the P2P platform, for example FundingKnight.
* From 6th April, losses will automatically be treated as losses for Income Tax and offset against your income with us.
If losses in a tax year exceed your income with us, you can use the balance against P2P income from other platforms in the same tax year and, to the extent that you still have residual losses, then against subsequent tax years. If you wish to do so then you must notify HMRC.
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