gnasher
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Post by gnasher on Oct 1, 2016 8:53:36 GMT
I will soon be commencing the joyous task of completing my 15/16 tax return. The AC tax report provides me with the interest earned but how do I find out which of my loans that have losses/defaults can be claimed? I am aware of the excellent thread in this General forum "P2P Bad Debt Relief ....", but I do not know how to apply this to my AC loan portfolio?
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bg
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Post by bg on Oct 1, 2016 11:51:36 GMT
I will soon be commencing the joyous task of completing my 15/16 tax return. The AC tax report provides me with the interest earned but how do I find out which of my loans that have losses/defaults can be claimed? I am aware of the excellent thread in this General forum "P2P Bad Debt Relief ....", but I do not know how to apply this to my AC loan portfolio? As far as I am aware there aren't any crystallised losses that can be claimed yet. You certainly can't claim for defaults.
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Greenwood2
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Post by Greenwood2 on Oct 1, 2016 12:04:07 GMT
As far as I can tell you just have to figure it out as best you can. Anything where legal recovery started during the period should be claimable. Then sort it out next year when the platforms have to deduct 'irrecoverable' (in HMRC terms in the guidelines) loans directly. In future tax years you will have to declare any subsequent recoveries on loans you have claimed.
Edit: That is if you mean income tax rather than Capital Gains Tax.
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SteveT
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Post by SteveT on Oct 1, 2016 12:05:32 GMT
Under the legislation, you can claim for any loan that enters legal recovery processes (receivership, etc) during the year. The only one I claimed for was the optical mfr but there may be others I wasn't in. Any future recoveries are then taxed as income in the year they arise.
[crossed with greenwood2)
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tomtom
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Post by tomtom on Oct 1, 2016 17:02:35 GMT
Under the legislation, you can claim for any loan that enters legal recovery processes (receivership, etc) during the year. The only one I claimed for was the optical mfr but there may be others I wasn't in. Any future recoveries are then taxed as income in the year they arise. [crossed with greenwood2) With this in mind how would you be eble to dtermine any potentail losses held in the gbba account?
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littleoldlady
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Post by littleoldlady on Oct 1, 2016 18:30:20 GMT
Under the legislation, you can claim for any loan that enters legal recovery processes (receivership, etc) during the year. The only one I claimed for was the optical mfr but there may be others I wasn't in. Any future recoveries are then taxed as income in the year they arise. [crossed with greenwood2) True, but for most people unless the sums are huge or cash flow is absolutely critical, the simplest plan is to deduct losses in the year in which the amount is known. IMHO.
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mikes1531
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Post by mikes1531 on Oct 1, 2016 20:40:53 GMT
Under the legislation, you can claim for any loan that enters legal recovery processes (receivership, etc) during the year. The only one I claimed for was the optical mfr but there may be others I wasn't in. Any future recoveries are then taxed as income in the year they arise. True, but for most people unless the sums are huge or cash flow is absolutely critical, the simplest plan is to deduct losses in the year in which the amount is known. IMHO. The problem is that definitive number could be a long time in coming. Take Anglesey. The property has been sold, and there was a shortfall. But now AC are pursuing the borrower for the remainder. Would anyone care to guess how long it might take before that will be settled finally, and either fully recovered or accepted that AC have received all they're going to get?
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littleoldlady
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Post by littleoldlady on Oct 1, 2016 21:03:38 GMT
True, but for most people unless the sums are huge or cash flow is absolutely critical, the simplest plan is to deduct losses in the year in which the amount is known. IMHO. The problem is that definitive number could be a long time in coming. Take Anglesey. The property has been sold, and there was a shortfall. But now AC are pursuing the borrower for the remainder. Would anyone care to guess how long it might take before that will be settled finally, and either fully recovered or accepted that AC have received all they're going to get? True, but how is that problem helped by pre-judging the loss in advance? The longer the period the more trouble in working things out when it is finally resolved, if different tax years are involved. But each to his own. I use the KISS principle when it comes to tax. Plus try to avoid an investigation if at all possible.
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duck
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Post by duck on Oct 2, 2016 5:32:13 GMT
Under the legislation, you can claim for any loan that enters legal recovery processes (receivership, etc) during the year. The only one I claimed for was the optical mfr but there may be others I wasn't in. Any future recoveries are then taxed as income in the year they arise. I also claimed for the optical loan on my personal 15/16 tax return which was submitted in April* and HMRC are yet to raise a query, they have 6 months so time is running out. *Before the Finance Act received Royal Assent - 15 September!
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agent69
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Post by agent69 on Oct 2, 2016 9:08:50 GMT
Whereabouts on your tax return do you enter details of the loss.
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duck
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Post by duck on Oct 2, 2016 9:34:35 GMT
Whereabouts on your tax return do you enter details of the loss. Mine were 'white noted' since I put in a very large claim against Bondora loans.
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SteveT
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Post by SteveT on Oct 2, 2016 9:39:03 GMT
Whereabouts on your tax return do you enter details of the loss. I deducted it from the earned interest and entered the net figure, keeping an offline record of the loan and sum involved.
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duck
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Post by duck on Oct 2, 2016 9:44:50 GMT
Whereabouts on your tax return do you enter details of the loss. I deducted it from the earned interest and entered the net figure, keeping an offline record of the loan and sum involved. Will that not open the possibility that the platform and you declare different figures?
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SteveT
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Post by SteveT on Oct 2, 2016 9:50:12 GMT
I deducted it from the earned interest and entered the net figure, keeping an offline record of the loan and sum involved. Will that not open the possibility that the platform and you declare different figures? For 2015/16, where bad debt offsetting decisions have been left to individuals to make, then almost inevitably. But the untaxed interest figure that one enters into an online SA return is a single aggregate number anyway, totalled across multiple platforms. If HMRC ever want me to break it down for them then I have all the figures at the ready. Hopefully it should be simpler in 2016/17 and beyond if platforms are obliged to declare their bad debts that are to be offset, as per the legislation.
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agent69
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Post by agent69 on Oct 2, 2016 9:55:16 GMT
Thanks for the suggestions.
I don't have any losses for 2015/2016. but Ive just had my first default on TC. May be in need of some assistance from the tax man next year as the security (surprise, surprise) isn't looking good.
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