james
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Post by james on Apr 14, 2016 15:48:54 GMT
Please review my post Capital Gains Tax filing needed in the general section and do what you can to help us to keep HMRC happy. While there is no prospect at present of profits or losses on the secondary market there is the possibility eventually of losses and the issue of simple debt or not as well as the sadly apparently mandatory reporting of all eligible (not simple) transactions by those who are in the self-assessment system seems to be unavoidable. Lots of hassle for little tax revenue effect, unfortunately.
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pom
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Post by pom on Apr 15, 2016 9:28:15 GMT
I'm also keen to get this confirmed ... there's no escaping the CGT pages for me, so just a question of just how long they need to be...
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SteveT
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Post by SteveT on Apr 15, 2016 9:34:14 GMT
Whatever the situation is currently, when we're all effectively lending to MT rather than to borrowers direct, it's important that the "new structure" that MoneyThing has mentioned is to be announced soon ensures that SM transactions are contractually handled as the redemption of the original simple debt and the creation of a new simple debt (between borrower and new loan-part holder), as they are on FC and AC.
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james
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Post by james on Apr 15, 2016 19:12:47 GMT
Yes, structuring things so secondary market buys are new simple debts will be significant for people investing outside an ISA or pension. As well as ensuring that primary market transactions are simple debts.
In both cases it'll be important to identify any exceptions so investors will know about the tax implications and don't end up accidentally misinforming HMRC.
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sam i am
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Post by sam i am on Apr 19, 2016 13:18:57 GMT
Whatever the situation is currently, when we're all effectively lending to MT rather than to borrowers direct, it's important that the "new structure" that MoneyThing has mentioned is to be announced soon ensures that SM transactions are contractually handled as the redemption of the original simple debt and the creation of a new simple debt (between borrower and new loan-part holder), as they are on FC and AC. Are we all effectively lending to MT? I don't think so. This is how I understand the structure: MT pre-fund the loan to get it off the blocks but then they assign the loan to the lenders on the platform. In my view this means that the lenders are then lending to the borrowers (not MT) albeit via an assigned contract rather than a direct one. If a borrower defaults then any losses pass through to the assigned lender (i.e. we don't have a claim against MT). MT seem to be clear about this in part 10 of their T&Cs. "You acknowledge and confirm that when you participate in Loans through the Platform you are lending to a Borrower via peer-to-peer lending and are not lending money to MoneyThing." Am I misunderstanding something? Regarding CGT reporting, what impact is there that all loans on MT appear to be reassigned loans? Does this mean that none of the MT loans are 'simple loans'? One interpretation could be that the whole of the MT platform is just a secondary market. There is no primary market because the primary market is the MT pre-fund - when they reassign the loan to platform lenders these are secondary transactions. I don't know the answers. I post the above in the hope that someone with far more experience than me can clarify this. MoneyThing, can you help?
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Post by SophieThing on Apr 20, 2016 9:01:16 GMT
Morning,
I wanted to let you know that we have noted this thread and it's related threads. We will need to seek advice on how our structure might be interpreted before we respond.
Kind regards
Sophie
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Post by SophieThing on Apr 29, 2016 12:49:02 GMT
Afternoon All,
Just to let you know that I'm still working on this. I now need to wait until one of our solicitors is back from holiday, which is after 11th May. Hope to have more to report then.
Kind regards
Sophie
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james
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Post by james on Apr 29, 2016 13:42:17 GMT
Thanks for the update Sophie. Having to wait for solicitors or accountants is nothing new in this area.
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Post by SophieThing on Jul 8, 2016 13:47:01 GMT
Hi All,
After a helpful reminder of this issue, I'm back on the case with this.
I have picked up discussions with the tax advisor and solicitor and have also engaged with our regulatory advisor to make sure there is no impact from a compliance perspective. I have had an initial opinion that our primary loans are 'simple debts', BUT I need further advice before I can confirm this as it is not a simple issue. Secondary market loans under review also.
I'll keep you informed.
Kind regards
Sophie
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james
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Post by james on Jul 8, 2016 20:35:36 GMT
It's worth a read of how Ablrate's advisers view things. Not simple loans for primary or secondary buys but logical, if with more potential CGT reporting to do, particularly with things like cashback being regarded as a discount on the purchase price so sales events, including just capital repayments by the borrower, generate a capital gain that is covered by capital gains tax rules. This isn't a suggestion about how I think things should be regarded for tax purposes, just an observation about the comprehensive coverage of the different issues that it'd be good for your own description to mention as well.
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pom
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Post by pom on Jul 8, 2016 21:26:02 GMT
It's worth a read of how Ablrate's advisers view things. Not simple loans for primary or secondary buys but logical, if with more potential CGT reporting to do, particularly with things like cashback being regarded as a discount on the purchase price so sales events, including just capital repayments by the borrower, generate a capital gain that is covered by capital gains tax rules. This isn't a suggestion about how I think things should be regarded for tax purposes, just an observation about the comprehensive coverage of the different issues that it'd be good for your own description to mention as well. Yikes, please no....ABL is a very different kettle of fish (love em to bits but their tax stuff has been doing my head in this week as I try and complete my tax return all for a measly £15 gain)... really don't think you can compare MTs flat rate of cashback vs ABLs time dependent instant returns....and of course no capital gains/losses involved in transactions at MT.
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james
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Post by james on Jul 8, 2016 21:46:44 GMT
Whether there are taxable and potentially reportable taxable gains at MoneyThing is one of the things that their advice will have to consider. Worth noting that I did say that I was not suggesting that MoneyThing and it's advisers take the same views as Ablrate's, though once Ablrate's reports are in place it'll be a good deal easier than it is now. As one of the more active participants in the Ablrate secondary market as both buyer and seller I'm even more affected by the treatments than most. Andy knows what is needed, just taking a while to get the advice then get things in place, not helped by them not having such a good relationship with their developers. If MoneyThing's conclusions end up like theirs I'm sure we'll see suitably good or excellent reporting to make dealing with the tax easy.
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Post by markp2p on Jul 8, 2016 22:03:47 GMT
I'm probably being thick but I don't see the possibility for capital gains on MT given that it is not possible to buy in the SM at a discount (or a premium). Of course capital losses are possible but there haven't been any yet.
Or is it irrelevant to HMRC that no gain or loss was made and you have to report all of your break-even disposals of chargeable assets to them as well?! In that case I would have thought that all loans on MT (SM or otherwise) would need reporting as we have already been told these work via assignment of part of the loan, not the creation of a new loan. They cannot be simple debts.
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pom
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Post by pom on Jul 8, 2016 22:18:59 GMT
I'm probably being thick but I don't see the possibility for capital gains on MT given that it is not possible to buy in the SM at a discount (or a premium). Of course capital losses are possible but there haven't been any yet. Or is it irrelevant to HMRC that no gain or loss was made and you have to report all of your break-even disposals of chargeable assets to them as well?! In that case I would have thought that all loans on MT (SM or otherwise) would need reporting as we have already been told these work via assignment of part of the loan, not the creation of a new loan. They cannot be simple debts. Yep - if they turn out to not be simple debts then the lack of losses/gains won't be relevant, they'll all be potentially reportable (if you meet the overall req'ts for CGT reporting)
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Post by markp2p on Jul 8, 2016 22:22:55 GMT
I'm probably being thick but I don't see the possibility for capital gains on MT given that it is not possible to buy in the SM at a discount (or a premium). Of course capital losses are possible but there haven't been any yet. Or is it irrelevant to HMRC that no gain or loss was made and you have to report all of your break-even disposals of chargeable assets to them as well?! In that case I would have thought that all loans on MT (SM or otherwise) would need reporting as we have already been told these work via assignment of part of the loan, not the creation of a new loan. They cannot be simple debts. Yep - if they turn out to not be simple debts then the lack of losses/gains won't be relevant, they'll all be potentially reportable (if you meet the overall req'ts for CGT reporting) Oh, that seems like an odd waste of time for taxpayer and HMRC - how annoying! (Not that it affects me as I have no capital gains at all...)
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