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Post by robberbaron on Jun 23, 2017 18:16:24 GMT
Nice idea... first time I've heard it. You buy a £1k loan part that's been on sale for a month and get a £10 bonus... sweet! [assuming 12% loan.]
It would certainly add liquidity to the SM but I cannot imagine Lendy forfeiting the benefit of the unpaid interest, especially when it amounts to £80k per month at present.
I made the same proposal last year so I wouldn't keep my hopes up.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jun 23, 2017 18:46:17 GMT
I have LPOA over my elderly mother's financial affairs and she has savings in several bank and building accounts, some of which she had tied up for 1/2/3 year terms to get a tiny bit more interest - and is getting 1.5% or 2% max interest for not having access for months/years, unless she accepts a penalty. I have some of these. For example if the instant rate is 1% and the 2 year fixed rate is 2% with a 12 month penalty the fixed rate becomes advantageous after 12 months. Especially for ISAs where it is unlikely that I would withdraw or transfer inside 12 months I would go for the 2 year fix.
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Post by df on Jun 24, 2017 3:42:47 GMT
It is 19 defaults at £23,267,500 total capital at the minute. PBL 074 (£322k borrowed for divorce settlement) is just about to reach it first anniversary of failure to pay it back. I hope their divorce went well... Latest update: "Our agents are taking advice as to which auction this property is most suitable for, with a view to achieving the highest possible sale price. We have imposed an auction back-stop date of August to enable repayment to be made as soon as possible." - it takes SS/Ly a year for their agents to start taking advice on auctions. At this speed, I can't see 'return to famine' in foreseen future. Lendy's focusing on growth by introducing new 7%-to-lenders loans and releasing new tranches for existing projects (£813,860 of DFL012 on SM now - they couldn't fill it up) sounds more like a potential disaster. I meant a famine on the prime SM, excluding the default tab. I can't see why anyone would ever buy these. If there was an incentive to buy a default loan such as a higher rate of interest, then maybe there would be a reason, although obviously that may never be achieved if recovery is less than full, and I would personally still avoid. It is in deed difficult to understand why somebody would invest in one year overdue loan (someone bought £10 of Bridge Farm Huntingdon 6 days ago). I wouldn't buy defaulted loan at any rate. Ly is the only platform that I know of who has default loans available for sale.
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Post by mrg on Jun 24, 2017 5:56:16 GMT
I meant a famine on the prime SM, excluding the default tab. I can't see why anyone would ever buy these. If there was an incentive to buy a default loan such as a higher rate of interest, then maybe there would be a reason, although obviously that may never be achieved if recovery is less than full, and I would personally still avoid. It is in deed difficult to understand why somebody would invest in one year overdue loan (someone bought £10 of Bridge Farm Huntingdon 6 days ago). I wouldn't buy defaulted loan at any rate. Ly is the only platform that I know of who has default loans available for sale. Is it for tax reasons. You pay income tax on interest earned so if you are on 150k a year can you invest 50k in default and declare you earned 100k? Although if this was the case I'd at least wait until April to do it.
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elliotn
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Post by elliotn on Jun 24, 2017 6:17:36 GMT
I wouldn't buy defaulted loan at any rate. Ly is the only platform that I know of who has default loans available for sale. I sold some loan parts in a loan in administration on MT yesterday.
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Post by martin44 on Jun 24, 2017 6:33:53 GMT
It is in deed difficult to understand why somebody would invest in one year overdue loan (someone bought £10 of Bridge Farm Huntingdon 6 days ago). I wouldn't buy defaulted loan at any rate. Ly is the only platform that I know of who has default loans available for sale. Is it for tax reasons. You pay income tax on interest earned so if you are on 150k a year can you invest 50k in default and declare you earned 100k? Although if this was the case I'd at least wait until April to do it. From my experience with HMRC , nothing is claimable until the loan default has been resolved and a loss declared, i queried it in regards to a boatyard loan on FS , and was told in no uncertain terms to shove off, however, while being invested in a default loan, you do not have to declare any interest being earned while the loan is defaulted. But if the default loan is re-payed with interest, then it has to be declared and tax paid. That's been my experience so far.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jun 24, 2017 14:10:05 GMT
Is it for tax reasons. You pay income tax on interest earned so if you are on 150k a year can you invest 50k in default and declare you earned 100k? Although if this was the case I'd at least wait until April to do it. From my experience with HMRC , nothing is claimable until the loan default has been resolved and a loss declared, i queried it in regards to a boatyard loan on FS , and was told in no uncertain terms to shove off, however, while being invested in a default loan, you do not have to declare any interest being earned while the loan is defaulted. But if the default loan is re-payed with interest, then it has to be declared and tax paid. That's been my experience so far. I do not understand this. If the platform notifies you of a loss on the P60 (as FS did with the boatyard) surely it can be offset against interest earned. If there is a subsequent recovery then the amount will be taxable in that year.
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Post by lendinglawyer on Jun 24, 2017 14:48:11 GMT
From my experience with HMRC , nothing is claimable until the loan default has been resolved and a loss declared, i queried it in regards to a boatyard loan on FS , and was told in no uncertain terms to shove off, however, while being invested in a default loan, you do not have to declare any interest being earned while the loan is defaulted. But if the default loan is re-payed with interest, then it has to be declared and tax paid. That's been my experience so far. I do not understand this. If the platform notifies you of a loss on the P60 (as FS did with the boatyard) surely it can be offset against interest earned. If there is a subsequent recovery then the amount will be taxable in that year. There is a difference between the loan being in default and being claimable as a tax relief (essentially having become irrecoverable). Where the platform declares it in the way you to which you refer you can claim the relief. Where it doesn't (and to my knowledge Lendy never has), you would be wise to think twice as there will be a conflict between what the platform provides to HMRC and what you do.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 24, 2017 15:15:13 GMT
Loss relief is claimable on a loan if the platform has declared it irrecovable (as FS have with the boatyard) or it is only recovery by legal means (ie formal legal recovery procedures being taken) so where receivers/administrators have clearly been appointed and the appointment has been publically documented then lenders are entitled to claim the relief. (Needs to fulfill P2P and tax liability criteria) Rules are quite clear (SAIM 12000) Personally I shall claim anything in legal recovery and say why with references in the notes.
To go back to the original point on purchases on the SM of defaults. Relief is not avaliable to the purchaser if the loan was irrecovable prior to the purchase as it had not become irrecovable while in the hands of the purchasers. So buying loans on the SM is unlikely to have any tax benefit as they are either already in legal recovery and thus ineligible or arent in recovery and thus also inelligible.
Ability to sell a loan also makes it ineligible so I would be reluctant to claim relief on any loan in legal recovery but not declared as irrecovable by platform, that has had recent sales as that indicates evidence of value. So I would not claim relief on the MT loan even though technically it is in legal recovery.
JMO/interpretation - not advice.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 24, 2017 15:51:56 GMT
So I would claim relief on the MT loan even though technically it is in legal recovery. Missing a "not", I presume? Doh!
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Post by bracknellboy on Jun 24, 2017 18:00:18 GMT
From my experience with HMRC , nothing is claimable until the loan default has been resolved and a loss declared, i queried it in regards to a boatyard loan on FS , and was told in no uncertain terms to shove off, however, while being invested in a default loan, you do not have to declare any interest being earned while the loan is defaulted. But if the default loan is re-payed with interest, then it has to be declared and tax paid. That's been my experience so far. I do not understand this. If the platform notifies you of a loss on the P60 (as FS did with the boatyard) surely it can be offset against interest earned. If there is a subsequent recovery then the amount will be taxable in that year. But are you both talking from the standpoint ? Lending as an individual and looking to offest against income vs claiming to offset against capital gains vs. Treatment when lending as a company ?
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jun 24, 2017 19:06:56 GMT
I withdraw from the 30 day AC a/c after 30 days, and my QAA withdrawals have also been instant. I did try to get some money into the Green a/c once but it just sat there uninvested for several days and I gave up. Liquidity is relative. We grew accustomed to SS/LY being like an instant access account when it was never designed to be, nor was it ever going to remain that way as the business grew. In fact, for most (not all - Castle being one example) loans , liquidity still compares quite favourably with some low interest building society a/cs. I've had to wait around 2 months to completely sell out of a few loans recently (DFL002 being one). But to put that into context, I have LPOA over my elderly mother's financial affairs and she has savings in several bank and building accounts, some of which she had tied up for 1/2/3 year terms to get a tiny bit more interest - and is getting 1.5% or 2% max interest for not having access for months/years, unless she accepts a penalty. might it be worth you mum taking the hit on the bs accounts if you have somewhere else at a much higher rate in which to stow the cash in line with agreed justfication of risk acceptability? I am going through a similar process on lpoa for my mum atm as well. Minefield. Dealing with different banks, mostly defunct, for similar queries produces such a difference in customer service standards and costs. Any privatisation shares need specific actions if successors are not to be stuck with a 60% ish charge as I was on my sisters shares in a high street bank.
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GeorgeT
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Post by GeorgeT on Jun 24, 2017 22:14:26 GMT
I withdraw from the 30 day AC a/c after 30 days, and my QAA withdrawals have also been instant. I did try to get some money into the Green a/c once but it just sat there uninvested for several days and I gave up. Liquidity is relative. We grew accustomed to SS/LY being like an instant access account when it was never designed to be, nor was it ever going to remain that way as the business grew. In fact, for most (not all - Castle being one example) loans , liquidity still compares quite favourably with some low interest building society a/cs. I've had to wait around 2 months to completely sell out of a few loans recently (DFL002 being one). But to put that into context, I have LPOA over my elderly mother's financial affairs and she has savings in several bank and building accounts, some of which she had tied up for 1/2/3 year terms to get a tiny bit more interest - and is getting 1.5% or 2% max interest for not having access for months/years, unless she accepts a penalty. might it be worth you mum taking the hit on the bs accounts if you have somewhere else at a much higher rate in which to stow the cash in line with agreed justfication of risk acceptability? I am going through a similar process on lpoa for my mum atm as well. Minefield. Dealing with different banks, mostly defunct, for similar queries produces such a difference in customer service standards and costs. Any privatisation shares need specific actions if successors are not to be stuck with a 60% ish charge as I was on my sisters shares in a high street bank. Thank you for your thoughts and advice. Yes, it's a bit of a minefield. I got the LPoA through earlier this year and I've been compiling together a spreadsheet with all the details of money/accounts/shares/assets my mother has with up to date balances, interest rates, terms etc. with a view to tidying things up and rationalising things and getting a better return on her money. I've got myself registered with most of the places where she has accounts - and that was a varying experience. Halifax was the best - they did the paperwork,copied the LPoA and then sent it off to Head Office electronically while I was there - then got on the phone to someone at Head Office and it was all done and approved during my appointment. Nationwide was quite efficient but I had to wait a week or so for it to be sorted, same with Santander. NatWest made a pigs ear of it all and it took about a month in the end though I've got that sorted now. I've still got to do her NS&I. It's good job I advised my mother to grant me LPoA when I did because she's mid 80s now and I could tell she wasn't coping with financial things anymore and had so many accounts she couldn't even remember where she had tucked a bit away and what shares she had - and if I'm honest I was concerned about money getting lost altogether when she goes because nobody knew about it. I spent a day going through her papers and found statements and old passbooks she'd completely forgotten about. Got about 25 different accounts listed so far and multiple different ISAs that need amalgamating! Such as an old Abbey National account she'd totally forgotten she had. My mother was never one for taking a lot of risks with her money so I'd never put any of her money in relatively high risk 12% P2P type loans because even though she doesn't understand money things anymore and would agree to anything I suggested, I don't think it's what she would have chosen for herself but there are lower risk accounts in this sector that might be worth considering for some of it. I need to sit down and look at how I can make her money earn more for her because some of the really old accounts she has are paying almost nothing and with a bit of financial management I know I can simplify things and get a better return for her. I'll look into your privatisation shares point because my Mum does have a bit in 'Tell Sid' kind of share issues. I agree that it may well be the case that accepting interest penalties may be worthwhile in terms of where that money could be reinvested. One of the joys of having an elderly parent!
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Post by df on Jun 24, 2017 23:20:44 GMT
I wouldn't buy defaulted loan at any rate. Ly is the only platform that I know of who has default loans available for sale. I sold some loan parts in a loan in administration on MT yesterday. Is it Birkenhead? At least it has another 4 months to run.
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Post by martin44 on Jun 25, 2017 6:59:07 GMT
From my experience with HMRC , nothing is claimable until the loan default has been resolved and a loss declared, i queried it in regards to a boatyard loan on FS , and was told in no uncertain terms to shove off, however, while being invested in a default loan, you do not have to declare any interest being earned while the loan is defaulted. But if the default loan is re-payed with interest, then it has to be declared and tax paid. That's been my experience so far. I do not understand this. If the platform notifies you of a loss on the P60 (as FS did with the boatyard) surely it can be offset against interest earned. If there is a subsequent recovery then the amount will be taxable in that year. Having looked at my FS tax statement it does indeed now state that there are capital losses (3 of my loans in this position, which were not on my statement 1st of April) even though all three are being actively marketed, i wonder how HMRC will now view this, my initial conversation with them resulted in them informing me that a loss against the tax could not be claimed until the asset was disposed of, and a final loss figure was confirmed. Any tax experts out their?.  EDIT. info here. www.gov.uk/guidance/peer-to-peer-lending#claiming-tax-relief-on-unpaid-loans
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