mike
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Post by mike on Apr 15, 2016 8:28:18 GMT
savingstream There is a current discussion on the forum about the need to report loans sales in the CGT section of a tax return. Please refer to this thread: p2pindependentforum.com/post/108591One of the considerations is how sales are structured: 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.Could you please clarify how this is handled re SS.
Mike
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locutus
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Post by locutus on Apr 15, 2016 8:33:06 GMT
How can there be a capital gain if everything is sold at par?
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SteveT
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Post by SteveT on Apr 15, 2016 8:37:35 GMT
How can there be a capital gain if everything is sold at par? I believe a potential issue arises if the total value of your disposals exceeds the CG reporting threshold, even if there are no chargeable gains resulting from the disposals
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pom
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Post by pom on Apr 15, 2016 9:31:45 GMT
I also sent them an email about this earlier...so will let you know if I get a reply before we get a response here
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Post by meledor on Apr 15, 2016 10:08:26 GMT
As already noted, as all disposals are at par then this could only ever be a disclosure issue with HMRC (and if you are above the relevant CGT thresholds).
However on my reading of the T&Cs (see particularly 10.4) I understand all loans including those purchased on the SM are simple debts and therefore not subject to CGT.
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pom
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Post by pom on Apr 15, 2016 10:17:33 GMT
As already noted, as all disposals are at par then this could only ever be a disclosure issue with HMRC (and if you are above the relevant CGT thresholds).
However on my reading of the T&Cs (see particularly 10.4) I understand all loans including those purchased on the SM are simple debts and therefore not subject to CGT. Oooh thanks Meledor, looks like you might be right.....only question now is does whether that also applied to the loans under the old Ts&Cs ... !
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Post by GSV3MIaC on Apr 15, 2016 11:07:55 GMT
I believe those are simple debts too, albeit with a different debtor. 8>. SS also has the advantage of always paying interest to whoever owned it on the day .. when you start selling loan parts 'cum interest' (basically turning income into capital gains) you are treading on dangerous ground.
The BH's definitely have lots of taxation hoops they can trip over (mixed metaphors here) along with anyone who appears to be buying/selling loans as a business (over on FC, ReBS etc, where you can mark them up) .. however the BHs probably have paid tax accountants to argue the toss with HMRC too.
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Post by Deleted on Apr 15, 2016 12:08:20 GMT
The governments EIS scheme is also very useful for reducing income tax bills and deferring CGT  |
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stevio
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Post by stevio on Apr 15, 2016 12:51:23 GMT
savingstream There is a current discussion on the forum about the need to report loans sales in the CGT section of a tax return. Please refer to this thread: p2pindependentforum.com/post/108591One of the considerations is how sales are structured: 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.Could you please clarify how this is handled re SS.
Mike
Did you need to start another thread - could you not have just tagged savingstream in the thread you reference? You will now get 2 conversations about the same thing....
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locutus
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Post by locutus on Apr 15, 2016 13:09:59 GMT
Did you need to start another thread - could you not have just tagged savingstream in the thread you reference? You will now get 2 conversations about the same thing.... I'm grateful as I wasn't paying attention to the other thread as I thought it didn't affect SS.
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Post by solicitorious on Apr 15, 2016 13:47:33 GMT
Are there in fact any penalties due for omission to disclose facts which would not give rise to any tax?
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pom
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Post by pom on Apr 15, 2016 15:08:26 GMT
Are there in fact any penalties due for omission to disclose facts which would not give rise to any tax? Dunno but I wouldn't want to test it....at best if they discover you're not declaring stuff they might start examining everything else with a fine tooth comb. Given what you sign says "accurate to the best of my knowledge" or some such you might get a bit of leeway but I still wouldn't want to risk it. Had a response from Tim to my email "SM transactions are structured in exactly the same way as if you were investing in a fresh new loan with plenty of availability." So I am crossing SS off my list of things to worry about.
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Post by solicitorious on Apr 15, 2016 15:44:27 GMT
Well good luck to them - pursuing thousands of taxpayers through thousands of transactions for a big fat zero return.
The nature of P2P and diversification means everyone should have a turnover in loans of something like 3x or 4x their actual average holding - perhaps more. That can lead to some eyewatering numbers many times the threshold mentioned.
Can't believe HMRC will be remotely interested if there's nothing in it for them, and if reporting is going to be that onerous it could kill P2P stone dead.
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mikes1531
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Post by mikes1531 on Apr 15, 2016 16:01:57 GMT
Well good luck to them - pursuing thousands of taxpayers through thousands of transactions for a big fat zero return. Can't believe HMRC will be remotely interested if there's nothing in it for them, and if reporting is going to be that onerous it could kill P2P stone dead. I suppose it all depends on who benefits from the penalties/fines levied on those who fail to report. But I'd have to agree that dealing with all the records of these transactions that generate no liability to tax would be a bit of a pain. The accountants, however, might be rubbing their hands with glee!
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ped
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Post by ped on Apr 20, 2016 9:09:22 GMT
Am I missing something here, but we lean money (invest) to SS and then they provide a bridging loan to a developer/purchaser of a property. We never own the property so where does the CGT and declarations come from? We have to tell HMRC about our interest received but as income (Income Tax due).
Confused a little, never takes much.
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