|
|
Post by bracknellboy on Apr 14, 2016 17:33:06 GMT
pikestaff : I'm glad you said that. I have been under SA for about the last 25 years. Never once have I thought I was required to submit anything under the CG part (more's the pity of course....I would have looooved to have been in the position where I clearly needed to).
|
|
pom
Member of DD Central
Posts: 1,922 
Likes: 1,244
|
Post by pom on Apr 14, 2016 17:35:29 GMT
james is correct that if you have sales of chargeable assets in excess of £44.4k you will have to comply with the extremely onerous reporting requirements, even if your chargeable gains are tiny. This is not new; it has always been the case. As noted by bigfoot12 , the reporting requirements apply only if you are over the limit, regardless of whether you are in self-assessment. So you need to know which assets are chargeable assets (within the scope of CGT) and which are not. The consensus is that p2p loans generally are "simple debts". Assuming this to be true, they are not chargeable assets for the INITIAL lender. The problem comes with second-hand loans. A second-hand "simple debt" is a chargeable asset. Any loans where you are not the initial lender would, ON THE FACE OF IT, be chargeable assets and sales of them would count toward the limit. HOWEVER, on many platforms (including RS, AC and FC that I am sure of), "sales" are structured as redemptions of the existing loan funded by a new loan. WHERE THIS IS SO, YOU AVOID THE PROBLEM. There used to be a slightly guarded explanation of this point in FC's FAQ, but the FAQ has recently been updated to cover the new bad debt relief and it has disappeared in the update. I have, however, been told by TC that sales on TC are true sales. Consequently the problem will arise on TC. I have a full record of all my sales and purchases on TC but hope I won't ever need to use it for this purpose! My personal view on all this is that (1) HMRC is rather unlikely to take the point. (2) There won't be many lenders who go over the limit. (3) Many lenders with large volumes of purchases and sales of second-hand loans (whether over the limit or not) may in fact be traders who should be reporting ALL gains and losses (including on sales of new loans) as income. If I were HMRC would prioritise going after them. I guess you can potentially avoid the problem by only ever buying OR selling a loan part on a platforms SM... the challenge will then be on sites (such as ABL) where everything gets amalgamated, how do you know which parts you're actually selling....
|
|
pikestaff
Member of DD Central
Posts: 2,188 
Likes: 1,546
|
Post by pikestaff on Apr 14, 2016 17:40:30 GMT
pom - I think I remember ablrateandy saying that ABL is a platform where "sales" are structured as a redemption and new issue. But I'm not sure which is why I left them out of my list.
|
|
pom
Member of DD Central
Posts: 1,922
Likes: 1,244
|
Post by pom on Apr 14, 2016 17:47:50 GMT
pom - I think I remember ablrateandy saying that ABL is a platform where "sales" are structured as a redemption and new issue. But I'm not sure which is why I left them out of my list. I hope you're right, it's definitely a complication I could do without!
|
|
pikestaff
Member of DD Central
Posts: 2,188
Likes: 1,546
|
Post by pikestaff on Apr 14, 2016 23:25:45 GMT
paul123 - Sadly not. You need to fill in the Capital gains summary pages and submit all the supporting detail if (among other things) EITHER: • you sold or disposed of chargeable assets which were worth more than £44,400, or • your chargeable gains before taking off any losses were more than £11,100. See the guidance notes (linked to earlier) for other possible circumstances. People whose chargeable asset disposals are largely of p2p loans are more likely to fall foul of the first criterion than the second.
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Apr 14, 2016 23:40:13 GMT
pom - I think I remember ablrateandy saying that ABL is a platform where "sales" are structured as a redemption and new issue. But I'm not sure which is why I left them out of my list. Once the relevant professional opinions are in from the relevant advisers I'm hoping that there will be a nice neatly packaged tax treatment FAQ that covers it, along with accompanying reporting. Just don't ask him for it tomorrow, it's not him doing that work and he'll update and get the CGT programming in place and approved once he gets the answers he needs. The draft non-CGT tax statement and email that I saw in association with reconciling my accounting and Ablrate's looked good so there's progress even if it is currently invisible. But of course unapproved so Ablrate can't go around providing them to people who might use them with HMRC yet. In my dreams we'll have that convenient single tax reference main page from all of the platforms, all conveniently packaged so we can easily link to the things.
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Apr 15, 2016 5:15:02 GMT
Thinking this through... Surely the fs secondary market must be counted as chargeable assets in this context as you buy them along with current accrued interest? Or is that logic not sound and there is some other criteria which determines if a platform is in scope or not?
|
|
|
|
Post by bracknellboy on Apr 15, 2016 5:57:31 GMT
I very much appreciate the help and advice but clearly this is insane. Imagine trying to extract the figure from AssetsCapital with their thousands of nano penny transaction per purchase and sale? How would it even be possible with the black box QAA? I suppose the obvious question at this point is if you're confident no gain has been made and you don't fill in that part of you tax return, what's the maximum fine? And if you are fined, do you then have to do it anyway? but you wouldn't need to because they are simple debts ad therefore not chargeable assets: p2pindependentforum.com/post/108591or am I missing something ?
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Apr 15, 2016 7:13:57 GMT
...I don't know if HMRC would actually regard repayments as disposals and someone may well correct me on this. I am sure that a repayment is not a disposal. The gain or loss on disposal of an amortised loan would in principle be calculated by reference to amortised cost, which could be rather painful to work out. That doesn't seem correct logically, not that the HMRC lets logic dictate much. If I buy a loan on the SM on TC at a discount then when it redeems at par I will have made a (presumably chargeable) gain. This will be realised at the end (or in some amortising fashion throughout the remaining life). I haven't bought anything on TC at a discount so I don't think that this is going to matter to me.
|
|
pikestaff
Member of DD Central
Posts: 2,188
Likes: 1,546
|
Post by pikestaff on Apr 15, 2016 7:36:25 GMT
bigfoot12 - Sorry, you are right. Per the HMRC manual www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg53405:All debts are assets for Capital Gains Tax purposes - TCGA92/S21 (1). The satisfaction of a debt - by a repayment, or otherwise - is a disposal of the debt. If a debt is repaid in part, there is a part disposal, TCGA92/S251 (2)... Which means those of us who acquire p2p loans in the secondary market, on those platforms where the acquired loans are in legal form second-hand, need to make sure our aggregate disposals of all chargeable assets INCLUDING amortisation/repayment are kept below £44.4k in the tax year, otherwise we shall have some very painful reporting to do. The only platform where this is in point for me is TC. I will need to monitor, and if necessary curtail, my secondary market activity. All of a sudden lending through a company, so that everything is taxable/deductible on an accruals basis, begins to look quite attractive. PS Your comment "I haven't bought anything on TC at a discount so I don't think that this is going to matter to me" is not quite right. The reporting obligation kicks in if aggregate disposals of chargeable assets are over £44.4k, even if you have no gains.
|
|
shimself
Member of DD Central
Posts: 2,563
Likes: 1,171
|
Post by shimself on Apr 15, 2016 7:56:38 GMT
It seems to me the platform should be able to do this for each lender with relative ease, certainly with greater ease than any of us can, because they have all the data (given adequate software skills)
|
|
pikestaff
Member of DD Central
Posts: 2,188
Likes: 1,546
|
Post by pikestaff on Apr 15, 2016 8:10:27 GMT
It seems to me the platform should be able to do this for each lender with relative ease, certainly with greater ease than any of us can, because they have all the data (given adequate software skills) Going forward, with a bit of development work, yes. Whether their systems retain the historical information needed to do this for past transactions (a flag to identify SM purchases, and the premium or discount by loan part) is in the lap of the gods. In the case of TC, premiums/discounts are written off immediately in the system so I doubt they have the latter. I would prefer it if TC and other affected platforms restructured their SM transactions so that the issue went away.
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Apr 15, 2016 8:18:49 GMT
PS Your comment "I haven't bought anything on TC at a discount so I don't think that this is going to matter to me" is not quite right. The reporting obligation kicks in if aggregate disposals of chargeable assets are over £44.4k, even if you have no gains. Thanks for that. I was thinking about the how difficult it would be to report gains on amortising loans. If I have to report one or two par TC purchases and par redemptions that wouldn't be hard work. Fortunately, I have reduced my TC holding to near zero.
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Apr 15, 2016 8:23:00 GMT
It seems to me the platform should be able to do this for each lender with relative ease, certainly with greater ease than any of us can, because they have all the data (given adequate software skills) Going forward, with a bit of development work, yes. Whether their systems retain the historical information needed to do this for past transactions (a flag to identify SM purchases, and the premium or discount by loan part) is in the lap of the gods. In the case of TC, premiums/discounts are written off immediately in the system so I doubt they have the latter. I would prefer it if TC and other affected platforms restructured their SM transactions so that the issue went away. Given that FC doesn't even have the correct available cash number on each page and the least said about TC's technology the better, hoping for these sort of changes seems futile. It is also very new and there doesn't seem to be much consistency even from different HMRC offices, why would a platform want to risk getting something wrong by producing a report.
|
|
pikestaff
Member of DD Central
Posts: 2,188
Likes: 1,546
|
Post by pikestaff on Apr 15, 2016 8:56:19 GMT
Given that FC doesn't even have the correct available cash number on each page and the least said about TC's technology the better, hoping for these sort of changes seems futile. It is also very new and there doesn't seem to be much consistency even from different HMRC offices, why would a platform want to risk getting something wrong by producing a report. It's not an issue on FC, which is one of the platforms where SM "purchases" are structured as new loans. New "simple debts" are not chargeable assets and do not count toward the £44.4k total.
|
|
