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Post by brock on Sept 8, 2016 8:35:58 GMT
I realise I am not going to win any friends with this post, but would greatly appreciate any help.
I am a British expat living and working in a zero income tax jurisdiction. I am an active p2p lender in both the UK and elsewhere in Europe. Interest I earn in the UK (mainly via SS and direct lending) I declare on my HMRC self-assessment and is not subject to any UK income tax (you see – this is why I said I wouldn’t win any friends!).
I read a thread recently regarding FS and the secondary market dynamic due to the tax being payable by the holder at maturity. This sounds perfect for my situation. I was wondering if anyone knows of any other quirks of different platforms regarding tax that could be advantageous for me to invest via?
Thanks in advance.
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Post by wiseclerk on Sept 8, 2016 8:49:49 GMT
Out of curiosity, which zero income tax jurisdiction?
As you are looking for "quirks", generally you may want to look at secondary markets that allow premiums and discounts on marketplaces with high interest rates and high default levels in Europe. As most lenders cannot offset defaults against interest earned and are taxed on interest earned, that might create opportunities for lenders in different tax circumstances.
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Post by brock on Sept 8, 2016 8:59:45 GMT
Out of curiosity, which zero income tax jurisdiction? As you are looking for "quirks", generally you may want to look at secondary markets that allow premiums and discounts on marketplaces with high interest rates and high default levels in Europe. As most lenders cannot offset defaults against interest earned and are taxed on interest earned, that might create opportunities for lenders in different tax circumstances. I'm a Monaco resident. Thanks for the reply regarding the high interest/high default. I will look into that as it could throw up opportunities. It might be that the same tax advantage doesn't exist within the Eurozone though - I lend via Mintos for instance, and they have confirmed that my interest is subject to 20% withholding tax on withdrawal.
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macro
Member of DD Central
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Post by macro on Sept 11, 2016 3:29:59 GMT
Out of curiosity, which zero income tax jurisdiction? As you are looking for "quirks", generally you may want to look at secondary markets that allow premiums and discounts on marketplaces with high interest rates and high default levels in Europe. As most lenders cannot offset defaults against interest earned and are taxed on interest earned, that might create opportunities for lenders in different tax circumstances. I'm a Monaco resident. Thanks for the reply regarding the high interest/high default. I will look into that as it could throw up opportunities. It might be that the same tax advantage doesn't exist within the Eurozone though - I lend via Mintos for instance, and they have confirmed that my interest is subject to 20% withholding tax on withdrawal. I'm in a similar position: an expat (NT status living outside the UK) and lending through Mintos. I hadn't considered a tax liability elsewhere. FAQs state: The income earned at Mintos is taxed for each investor based on legislation of the respective country where the investor is a tax resident. Is the 20% 'withholding' tax payable to the Latvian taxman?
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Post by brock on Sept 11, 2016 7:57:52 GMT
I'm a Monaco resident. Thanks for the reply regarding the high interest/high default. I will look into that as it could throw up opportunities. It might be that the same tax advantage doesn't exist within the Eurozone though - I lend via Mintos for instance, and they have confirmed that my interest is subject to 20% withholding tax on withdrawal. I'm in a similar position: an expat (NT status living outside the UK) and lending through Mintos. I hadn't considered a tax liability elsewhere. FAQs state: The income earned at Mintos is taxed for each investor based on legislation of the respective country where the investor is a tax resident. Is the 20% 'withholding' tax payable to the Latvian taxman? Latvian law states that withholding tax is payable on the interest at the time of a withdrawal if the person withdrawing is in a country considered to be a "low tax" country. Mintos confirmed that to me early last year having consulted with their tax advisors. I have just double-checked the correspondence I had with them, and my memory proved too conservative though. The withholding tax rate is actually 15%. Note that this is on the interest upon withdrawal. I withdrew some funds a while back - a Mintos rep had me confirm that the withdrawal was from my original principal and not interest. Confirming it was principal (despite being from a single account) made it a tax exempt withdrawal.
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Post by wiseclerk on Sept 11, 2016 8:32:36 GMT
... most lenders cannot offset defaults against interest earned and are taxed on interest earned, ... Sorry, are you referring to UK residents too, because didn't the rules change for them to allow offsetting losses, in April this year? I know the UK taxpayers can, but looking at Europe as a whole that still leaves a vast majority of investors who cannot.
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shimself
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Post by shimself on Sept 11, 2016 9:38:29 GMT
Sorry, are you referring to UK residents too, because didn't the rules change for them to allow offsetting losses, in April this year? I know the UK taxpayers can, but looking at Europe as a whole that still leaves a vast majority of investors who cannot. France too within limits
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