Liz
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Post by Liz on Apr 26, 2017 17:32:07 GMT
This is very ambiguous information and far from clarification. 1) What does "repeatedly" on the SM actually mean : - a) does it mean 1000 times over a tax year, 20 times a day for 10 consecutive days? b) what if purchase and sale are in different tax years? (e.g. bought on SM in Mar, sold on SM in May) 2) How do we know precisely how close we are to being deemed a "trader" ? 4) You say you can transfer a loan between regular and ISA account if a single transaction, do you really mean you can only ever do it once in a tax year, in a lifetime and if so why does FS platform allow you to keep doing it ? I think it is very explicit - its not up to FS to define exactly how many times you can 'push it' before HMRC deem you anything, you should be asking HMRC that and if you don't want to ask HMRC, then you probably know you shouldn't be doing it - have a bit of common sense - it's up to you if you want to risk a HMRC investigation I think the questions should be answered. It isn't about pushing it. If I sell 20 loan parts in a tax year is that trading? What about 5? What about if I sell £5,000 and it sells in £25 individual sales, which shows as 200 "sells" is that trading? We do need a rough guide. I have sold several loans I changed my mind about or reduced my exposure on some loans and I don't want to be classed as a trader. I do like to hold most of my loans for 4 1/2 months, then sell to avoid default risk, is that allowed? I'm not even a tax payer(don't work) so does that change anything? I mean I must have bought and sold 500 loan parts on Lendy last year! Half of their mem bers must be "traders"
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Post by excalibur on Apr 26, 2017 17:35:52 GMT
This is very ambiguous information and far from clarification. 1) What does "repeatedly" on the SM actually mean : - a) does it mean 1000 times over a tax year, 20 times a day for 10 consecutive days? b) what if purchase and sale are in different tax years? (e.g. bought on SM in Mar, sold on SM in May) 2) How do we know precisely how close we are to being deemed a "trader" ? 4) You say you can transfer a loan between regular and ISA account if a single transaction, do you really mean you can only ever do it once in a tax year, in a lifetime and if so why does FS platform allow you to keep doing it ? I think it is very explicit - its not up to FS to define exactly how many times you can 'push it' before HMRC deem you anything, you should be asking HMRC that and if you don't want to ask HMRC, then you probably know you shouldn't be doing it - have a bit of common sense - it's up to you if you want to risk a HMRC investigation FS have a control in place to stop you depositing more than the tax year allowance but nothing to stop you going over "repeatable" threshold (which could be anything more than once), or even tell you how many purchase / sale combinations you've done on the SM involving regular and/or ISA accounts. I don't see these questions having to be answered with advice from FS but simply hard cold numbers.
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Liz
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Post by Liz on Apr 26, 2017 17:40:27 GMT
Maybe if you just buy on the PM and sell on the SM, which is what I do, then you can't be a trader.
I do think we need a guide because for all we know anyone that has used the SM more than once could be a trader.
FS must have had dialgue to allow them to set the SM in the manner it has done. They must also have been given guidlines as to when to report someone as a trader
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stevio
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Post by stevio on Apr 26, 2017 18:27:30 GMT
I think it is very explicit - its not up to FS to define exactly how many times you can 'push it' before HMRC deem you anything, you should be asking HMRC that and if you don't want to ask HMRC, then you probably know you shouldn't be doing it - have a bit of common sense - it's up to you if you want to risk a HMRC investigation I think the questions should be answered. It isn't about pushing it. If I sell 20 loan parts in a tax year is that trading? What about 5? What about if I sell £5,000 and it sells in £25 individual sales, which shows as 200 "sells" is that trading? We do need a rough guide. I have sold several loans I changed my mind about or reduced my exposure on some loans and I don't want to be classed as a trader. I do like to hold most of my loans for 4 1/2 months, then sell to avoid default risk, is that allowed? I'm not even a tax payer(don't work) so does that change anything? I mean I must have bought and sold 500 loan parts on Lendy last year! Half of their mem bers must be "traders" FS can't give tax advice. They can only say if you buy and sell the same loan part on the SM, you could be considered a trader by HMRC. If you want definitive definition of trader, ask HMRC (but you won't as you expect a platform to define what HMRC will or won't do)
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Post by bracknellboy on Apr 26, 2017 20:05:43 GMT
I think the questions should be answered. It isn't about pushing it. If I sell 20 loan parts in a tax year is that trading? What about 5? What about if I sell £5,000 and it sells in £25 individual sales, which shows as 200 "sells" is that trading? We do need a rough guide..... Maybe, but not by the platform. Only HMRC can answer that - as to where they consider the tipping point to be - while no doubt reserving the right to change their mind at an undefined time in the future, and to retrospectively apply that change of mind. If it is not unambiguously defined within either legalisation or guidance around legalisation, you cannot possibly expect the platform to be offerring up any sort of opinion or even pointer on the matter. If they did, who are u going to be wanting to putting a claim against if it turns out to be 'wrong'.
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mason
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Post by mason on Apr 27, 2017 5:56:07 GMT
I think it is very explicit - its not up to FS to define exactly how many times you can 'push it' before HMRC deem you anything, you should be asking HMRC that and if you don't want to ask HMRC, then you probably know you shouldn't be doing it - have a bit of common sense - it's up to you if you want to risk a HMRC investigation I think the questions should be answered. It isn't about pushing it. If I sell 20 loan parts in a tax year is that trading? What about 5? What about if I sell £5,000 and it sells in £25 individual sales, which shows as 200 "sells" is that trading? We do need a rough guide. I have sold several loans I changed my mind about or reduced my exposure on some loans and I don't want to be classed as a trader. I do like to hold most of my loans for 4 1/2 months, then sell to avoid default risk, is that allowed? I'm not even a tax payer(don't work) so does that change anything? I mean I must have bought and sold 500 loan parts on Lendy last year! Half of their members must be "traders" It's not about the number of buys and sells. It is about the number of times you turn over loan parts in the same loan. Many people will buy loan parts on the secondary market. Some of those people will sell the loan parts as the loans reach maturity. FS has clarified none of that constitutes trading. So trading would represent something between turning over a loan part once, and doing so repeatedly. Maybe someone would buy a loan, later sell it, then decide they have nothing better to do with the cash and buy back in, later selling again near to the end of the loan term. That's turning over the loan twice, and would probably be ok if an isolated occurrence. It will all come down to your overall conduct where the tipping point would be. I don't think many people repeatedly buy in and out of the same loans.
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SteveT
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Post by SteveT on Apr 27, 2017 14:20:56 GMT
Some interesting input here from the Chief Exec of Goji, who are already acting as back-office IFISA administrators for a number of other P2P platforms |
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Post by excalibur on Apr 27, 2017 16:05:50 GMT
Some interesting input here from the Chief Exec of Goji, who are already acting as back-office IFISA administrators for a number of other P2P platforms Everything that is of concern regarding HMRC boundaries FS could resolve within hours from a little bit of code tweaking to their platform. In my opinion until they have clarity, or maybe they never do, it is their responsibility to ensure the FS platform does not allow a SM loan part to be bought & sold more than once, and none whatsoever of same loan part between regular and ISA account.
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stub8535
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Post by stub8535 on Apr 27, 2017 16:42:07 GMT
Having spoken to one of the lead inspectors at HMRC today it seems that "trading" has been taken in the wrong context by the platform. Trading covers a situation where someone elses money is being used, either as an individual or, as some on p2p do, via a company in order to take advantage of corporation tax and dividend limits to increase their tax free income, rather than using their own money and paying income tax.
Interestingly, the person I spoke to admitted that HMRC are still learning about p2p and the taxation due. I suspect it will not be long before rules incumbent on platforms or ISA administrators are adjusted and retrospective action, where obvious transgression can be proven, to reverse the transactions at best up to full investigatiin of a lender at worse.
As for the trading and churning between isa and none isa to inflate the isa deliberately then investors know it is wrong and must expect the HMRC consequences imho.
It should be possible, if the lender has linked ALL their accounts to ALL their ISA's that programming would help stop trangression. However, we are talking gamers out to avoid paying what is due.
It is simple enough to identify, from the rate figure on your secondary market trade on your main account which of the loans on sale is yours. Not difficult to avoid but multi screens or devices need to be open.
I am told that inside the isa the loan part on sale from your main account is not highlighted. That is the issue FS could solve by placing simple linkages to highlight multiple, or single, linked accounts. But then, would they be complicit in helping people hide money from HMRC where all the money belongs to the person trading, for tax purposes?
We will need to see what develops over time within HMRC and p2p. Interesting times ahead.
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jj
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Post by jj on Apr 27, 2017 17:08:25 GMT
I can understand why trading or flipping between the ISA & non-ISA would be wrong in the eyes of the HMRC.
I also understand why offering a discount/premium to yourself would be wrong. Its kind of common sense.
But putting your loans into your ISA account at 0% is like the Bed & ISA process in shares.
That bit is the grey area for me.
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stub8535
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Post by stub8535 on Apr 27, 2017 17:18:55 GMT
Agreed jj. Too much ambiguity. The discounts and premiums seen being used by greedier tax evaders is excessive and stupidly obvious. Some have worked out an invisible, seemingly, way to play the system. That is up to them but they could find FS taking action to stop it if it can be proven. S |
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mikes1531
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Post by mikes1531 on Apr 27, 2017 21:01:35 GMT
I mean I must have bought and sold 500 loan parts on Lendy last year! Half of their members must be "traders" One huge difference between the FS and L SMs is the discounts/premiums allowed. There are none with L, so that might reduce the chance of buying and selling being deemed to be trading.
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elliotn
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Post by elliotn on Apr 28, 2017 3:55:41 GMT
I mean I must have bought and sold 500 loan parts on Lendy last year! Half of their members must be "traders" Ly 'traders' will pay income/corporation tax (unless interest is within their tax free/personal savings allowances).
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Godanubis
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Post by Godanubis on Feb 1, 2018 12:43:30 GMT
Report to HMRC only shows interest paid not capital gain on selling at a premium in your ISA so selling before maturity still avoids TAX and only interest on loans you can't sell on time shows on Tax statement + money invested that year as allowed. If you by long term loans on SM early with discount you can then sell easier near term with same or lower discount and avoid all tax.
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