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    • elephantrosie
    • By elephantrosie 16th Apr 17, 2:18 PM
    • 316 Posts
    • 76 Thanks
    elephantrosie
    anyone with experience using MoneyThing?
    • slush
    • By slush 16th Apr 17, 2:32 PM
    • 101 Posts
    • 44 Thanks
    slush
    Yes, there are a few of us here.
    There is a specific thread at
    http://forums.moneysavingexpert.com/showthread.php?t=5503718
    • justme111
    • By justme111 16th Apr 17, 2:47 PM
    • 2,616 Posts
    • 2,503 Thanks
    justme111
    I do not remember exactly why I was not keen in options with safeguard fund, probably because rates are ridiculously low on those.
    After reading more I quickly taken 2 000 out of FC and placed 1000 in moneything and 1000 in ablrate. On FC I switched autobid off. Then added another 1000 split amongst FC, moneything and ablrate resulting in about 1300 on each platform. Entertaining myself with manually selecting loans on those platforms placing dribs of £20 at a time . If all goes well I will place another couple of thousands in those platforms plus collateral and FS if I find trustworthy loans on the latter.
  • jamesd
    what do you mean by 28% tax?
    Originally posted by elephantrosie
    Capital Gains Tax is the UK tax on the increase in value of many types of investments and property between the time that they are bought and the time they are sold or, in the case of loans, repaid, either in monthly installments or at the end.

    The first £11,300 of gain is tax free due to the annual CGT allowance. Above that the rate is 10% (18% residential property) for basic rate tax payers and 20% (28% residential property) for those liable to the higher rate, roughly higher rate tax payers. Much P2P lending is exempt as well, you need to check the guidance for each platform because it depends on the fine details of how their loans are structured. If you have disposals (sales or repayments) of loans that aren't exempt that are more than four times the allowance you have to report all transaction in non-exempt loans and other investments to HMRC even if no CGT is due because you're within the allowance.
    Last edited by jamesd; 17-04-2017 at 11:05 PM.
    • chucknorris
    • By chucknorris 17th Apr 17, 6:47 AM
    • 8,956 Posts
    • 13,477 Thanks
    chucknorris
    i do wish you wouldn't defend P2P so well, i am finding it hard enough as it is to stay fully invested in the loans that i like
    Originally posted by nushnush
    I occasionally think P2P is something that I should get involved with, but I am very wary, what I fear is not risks from a day to day basis, but what happens when there is a huge economic collapse (like 2008 and 1988). Sure, share prices and property collapsed back then, but they eventually recovered, wouldn't P2P investments just end up being totally lost in such an extreme economic meltdown?

    On the other hand both jamesd and bigadaj not only put up very reasonable arguments, they are also respected posters with a history of common sense. I think my problem is that I am at a strange (to me) stage of my investing life. I have made my money, and I am 60 next year, and I must admit that I am struggling a little moving from investing for profit, to investing for safety. We've just sold 2 (of 8) investment properties, it was the right thing to do, but part of me still feels like a mug when I look at the prospective lower returns on the equity released.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • masonic
    • By masonic 17th Apr 17, 7:08 AM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    I occasionally think P2P is something that I should get involved with, but I am very wary, what I fear is not risks from a day to day basis, but what happens when there is a huge economic collapse (like 2008 and 1988). Sure, share prices and property collapsed back then, but they eventually recovered, wouldn't P2P investments just end up being totally lost in such an extreme economic meltdown?
    Originally posted by chucknorris
    It's worth remembering that Zopa was around back in 2008 and, although it had a pretty bad year, investors did not lose money. With asset backed P2P, which most are recommending here, a total loss is pretty unlikely. Having a significant proportion of your money tied up for a long time during recoveries is something you would need to be able to cope with however. If you stick to the recommended ~10% of your investments in P2P, then this shouldn't be a major issue.
    • masonic
    • By masonic 17th Apr 17, 7:13 AM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    If you have disposals (sales or repayments) of loans that aren't exempt you have to report all transaction in non-exempt loans and other investments to HMRC even if no CGT is due because you're within the allowance.
    Originally posted by jamesd
    I was under the impression you only needed to make a declaration to HMRC if you had a liability. I have previously placed share trades outside of a tax free wrapped and made a few hundred pounds here and there, but never reported the transactions to HMRC.
    • chucknorris
    • By chucknorris 17th Apr 17, 7:48 AM
    • 8,956 Posts
    • 13,477 Thanks
    chucknorris
    It's worth remembering that Zopa was around back in 2008 and, although it had a pretty bad year, investors did not lose money. With asset backed P2P, which most are recommending here, a total loss is pretty unlikely. Having a significant proportion of your money tied up for a long time during recoveries is something you would need to be able to cope with however. If you stick to the recommended ~10% of your investments in P2P, then this shouldn't be a major issue.
    Originally posted by masonic
    I appreciate what you are saying, and perhaps my post could have been worded better, but wouldn't those assets be sold in a very bad market, leading to significant losses? In 2008 our properties dropped in value by approx £1m, but are now well over £2m higher than they were in the dip. Obviously we didn't sell back in 2008, in fact, we actually bought another investment property (which has doubled in value) taking advantage of the lower values.

    EDIT: Another problem that I (I realise that this is irrelevant to a lot of people) have with P2P is that I wouldn't be able to spend the extra returns (we are already going to struggle to spend everything), so it seems daft to accept risks for no upside, at the end of the day you have to balance risk against potential 'real' gains.
    Last edited by chucknorris; 17-04-2017 at 7:55 AM.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • masonic
    • By masonic 17th Apr 17, 8:02 AM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    I appreciate what you are saying, and perhaps my post could have been worded better, but wouldn't those assets be sold in a very bad market, leading to significant losses? In 2008 our properties dropped in value by approx £1m, but are now well over £2m higher than they were in the dip. Obviously we didn't sell back in 2008, in fact, we actually bought another investment property (which has doubled in value) taking advantage of the lower values.
    Originally posted by chucknorris
    The platform would need to act in the best interests of its investors. That could mean not selling immediately, or granting an extension to a loan. Loans on property at 60-70% LTV (where this is a realistic valuation) do already have some headroom for properties to be sold at a loss, but actual sale prices could be less than this in a bad market as you say. Diversifying among different types of security is helpful. I wouldn't want all of my P2P secured on property loans and tend to have quite a variety in my P2P portfolio.

    EDIT: Another problem that I (I realise that this is irrelevant to a lot of people) have with P2P is that I wouldn't be able to spend the extra returns (we are already going to struggle to spend everything), so it seems daft to accept risks for no upside, at the end of the day you have to balance risk against potential 'real' gains.
    Well if you can meet all of your financial goals without taking on any risk, then I agree that you should not. That seems like a very nice dilemma to have
  • jamesd
    I was under the impression you only needed to make a declaration to HMRC if you had a liability. I have previously placed share trades outside of a tax free wrapped and made a few hundred pounds here and there, but never reported the transactions to HMRC.
    Originally posted by masonic
    No need to report if the gain is within the limit and all disposals combined are worth less than four times the allowance.
    • anselld
    • By anselld 17th Apr 17, 11:23 AM
    • 5,162 Posts
    • 4,705 Thanks
    anselld

    Above that the rate is 18% for basic rate tax payers and 28% for those liable to the higher rate, roughly higher rate tax payers.
    Originally posted by jamesd
    18%/28% is only for residential property.
    Everything else is 10%/20%.
    • bigadaj
    • By bigadaj 17th Apr 17, 9:27 PM
    • 9,155 Posts
    • 5,851 Thanks
    bigadaj
    I occasionally think P2P is something that I should get involved with, but I am very wary, what I fear is not risks from a day to day basis, but what happens when there is a huge economic collapse (like 2008 and 1988). Sure, share prices and property collapsed back then, but they eventually recovered, wouldn't P2P investments just end up being totally lost in such an extreme economic meltdown?

    On the other hand both jamesd and bigadaj not only put up very reasonable arguments, they are also respected posters with a history of common sense. I think my problem is that I am at a strange (to me) stage of my investing life. I have made my money, and I am 60 next year, and I must admit that I am struggling a little moving from investing for profit, to investing for safety. We've just sold 2 (of 8) investment properties, it was the right thing to do, but part of me still feels like a mug when I look at the prospective lower returns on the equity released.
    Originally posted by chucknorris
    I think jamesd's approach is somewhat different to mine but I think p2p has a place in a balanced portfolio.

    Jamesd has a far more conviction based approach than I have, I prefer a lower risk and reward approach.

    I believe James has a significant portion of wealth in p2p currently whereas I have barely five figures in total, four figures in individual platforms and three figures in individual loans.

    My approach has been to diversify on the basis that defaults will then have low impact, however this means small investments, at least initially and taking what some might perceive to be a long time and moderate effort to understand the platforms and individual loans.

    This would be too much effort for many with significant wealth and not worthwhile though I do find the loans and platform models in themselves interesting.

    With many bonds now offering such poor value I consider p2p as an approximate proxy, higher risk but with significantly better potential. Partially balanced by a reasonable sum in premium bonds which have the advantage of not offering negative returns, at least in absolute if not real terms.
  • jamesd
    18%/28% is only for residential property.
    Everything else is 10%/20%.
    Originally posted by anselld
    Yes, I was replying to someone who was worried about a mention of the 28% rate so I used the property rates. I edited the post to give both so it didn't mislead in the P2P case that would be ten or twenty percent if over the allowance.
    Last edited by jamesd; 18-04-2017 at 1:14 AM.
  • jamesd
    I occasionally think P2P is something that I should get involved with, but I am very wary, what I fear is not risks from a day to day basis, but what happens when there is a huge economic collapse (like 2008 and 1988). Sure, share prices and property collapsed back then, but they eventually recovered, wouldn't P2P investments just end up being totally lost in such an extreme economic meltdown?
    Originally posted by chucknorris
    I appreciate what you are saying, and perhaps my post could have been worded better, but wouldn't those assets be sold in a very bad market, leading to significant losses? In 2008 our properties dropped in value by approx £1m, but are now well over £2m higher than they were in the dip. Obviously we didn't sell back in 2008, in fact, we actually bought another investment property (which has doubled in value) taking advantage of the lower values.
    Originally posted by chucknorris
    I think you've in effect responded to yourself on the totally lost point. If it's secured lending and residential property is the security that's not going to lose all value just because of economic trouble. There's timing flexibility to some degree on when to sell a property which has been seized, or even on whether to do if at all if the developer can still pay the interest until conditions improve.

    Consumers don't all stop paying during a downturn so much of that lending would be fine or not particularly bad losses.

    Lending secured on business buildings could be more dubious, perhaps in part because many lenders might not know that valuations for those are often valued as a multiple of rent paid. So you have to factor in possibly worse trading conditions as well.

    There's a business loan for a pub at Ablrate at the moment. Property valuation of a million Pounds based on anticipated EBITDA times 5.5 if I recall correctly. Gives loan to value of around 50%. But that's not most recent EBITDA which would cut the value to half a million at the same multiple. Buyer is a pub group with a good record reworking pubs to raise profits so the deal makes sense IMO but in recessions people may go to entertainment venue pubs (themed bars and such) less and hurt both trading and property value dependent on it. Then there's the guarantee from the parent firm to improve on the building security. But ultimately the loan is about the business refurbishment being successful with a side bet on there not being major trading strain on the business. And on them not over-trading and failing during a period of rapid expansion they are in at the moment. The loan is split into two parts, 12% interest only and 14% amortising, so the overall loan to value will improve as the amortising one reduces and since that is subordinated to the first (paid off after it if the security is called in) the higher rate is needed.

    I've put a few thousand into that one but there's a real question about how many lenders might understand that nature of the security and the way it's linked to trading risk. Even so, the place won't become worthless, however bad things might get.

    I think my problem is that I am at a strange (to me) stage of my investing life. I have made my money, and I am 60 next year, and I must admit that I am struggling a little moving from investing for profit, to investing for safety. We've just sold 2 (of 8) investment properties, it was the right thing to do, but part of me still feels like a mug when I look at the prospective lower returns on the equity released.
    Originally posted by chucknorris
    A sensible mug maybe? Reducing hassle could make a lot of sense for you so cutting back on the investment properties assuming they are let seems to make sense.

    That doesn't rule out P2P because it has some interesting properties due to it being a hold to maturity investment, unlike bond funds. So less volatility. But you might want to avoid property development loans because they are riskier than most due to the unknown exit market conditions at the end of the work. And maybe sell a while before the end of the term since that's when risk is most likely to become actual rather than potential - that's when sale prices might not be reached or the developer might not have the funds to complete the job. Or maybe you'd pay BondMason their cut to get 6-7% with less work by you.
    • chucknorris
    • By chucknorris 18th Apr 17, 7:22 AM
    • 8,956 Posts
    • 13,477 Thanks
    chucknorris
    I think you've in effect responded to yourself on the totally lost point. If it's secured lending and residential property is the security that's not going to lose all value just because of economic trouble. There's timing flexibility to some degree on when to sell a property which has been seized, or even on whether to do if at all if the developer can still pay the interest until conditions improve.

    Consumers don't all stop paying during a downturn so much of that lending would be fine or not particularly bad losses.

    Lending secured on business buildings could be more dubious, perhaps in part because many lenders might not know that valuations for those are often valued as a multiple of rent paid. So you have to factor in possibly worse trading conditions as well.

    There's a business loan for a pub at Ablrate at the moment. Property valuation of a million Pounds based on anticipated EBITDA times 5.5 if I recall correctly. Gives loan to value of around 50%. But that's not most recent EBITDA which would cut the value to half a million at the same multiple. Buyer is a pub group with a good record reworking pubs to raise profits so the deal makes sense IMO but in recessions people may go to entertainment venue pubs (themed bars and such) less and hurt both trading and property value dependent on it. Then there's the guarantee from the parent firm to improve on the building security. But ultimately the loan is about the business refurbishment being successful with a side bet on there not being major trading strain on the business. And on them not over-trading and failing during a period of rapid expansion they are in at the moment. The loan is split into two parts, 12% interest only and 14% amortising, so the overall loan to value will improve as the amortising one reduces and since that is subordinated to the first (paid off after it if the security is called in) the higher rate is needed.

    I've put a few thousand into that one but there's a real question about how many lenders might understand that nature of the security and the way it's linked to trading risk. Even so, the place won't become worthless, however bad things might get.

    A sensible mug maybe? Reducing hassle could make a lot of sense for you so cutting back on the investment properties assuming they are let seems to make sense.

    That doesn't rule out P2P because it has some interesting properties due to it being a hold to maturity investment, unlike bond funds. So less volatility. But you might want to avoid property development loans because they are riskier than most due to the unknown exit market conditions at the end of the work. And maybe sell a while before the end of the term since that's when risk is most likely to become actual rather than potential - that's when sale prices might not be reached or the developer might not have the funds to complete the job. Or maybe you'd pay BondMason their cut to get 6-7% with less work by you.
    Originally posted by jamesd
    Ablrate looks interesting, I've just registered and awaiting confirmation of the ID proof that I uploaded on their system. I nearly called it Ablgate above, I hope that isn't a bad omen, lol.

    I'm beginning to see the sense of this:

    Investments like that pub/restaurant will not fail on the first day, so some interest at 12% will have been received.

    If I make a few investments, most will probably last for at least the length of the loan.


    Do Bondrate and Ablrate provide annual interest earned statements for completing tax returns?

    EDIT: I now have access to Ablrate, on that pub/restaurant opportunity, I prefer the 12% interest only option, as it has the first charge. I may invest in that, what is the min? I was thinking about £3-4k, but I will think that over. What made you prefer the second charge option (I'm just checking that I have correctly interpreted both options)?

    I need to think how much in total I want to lend, and over how many investments (how many are likely to be available over any 4 year span). If I want to invest a total of say approx £40-£50k at any one time, that would be £3-4k per loan. If I assume that I will be interested in say 50% of the opportunities, is it likely that 8 opportunities (in property only) are likely to be offered per annum?

    If all that is feasible, I think I would target about 4 loans per year at £3-4k each, maybe double up on ones that look particularly tasty.
    Last edited by chucknorris; 18-04-2017 at 10:31 AM.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • AlanP
    • By AlanP 18th Apr 17, 12:58 PM
    • 773 Posts
    • 530 Thanks
    AlanP
    Ablrate looks interesting, I've just registered and awaiting confirmation of the ID proof that I uploaded on their system. I nearly called it Ablgate above, I hope that isn't a bad omen, lol.

    I'm beginning to see the sense of this:

    Investments like that pub/restaurant will not fail on the first day, so some interest at 12% will have been received.

    If I make a few investments, most will probably last for at least the length of the loan.


    Do Bondrate and Ablrate provide annual interest earned statements for completing tax returns?

    Ablrate do, not used Bondratte.

    EDIT: I now have access to Ablrate, on that pub/restaurant opportunity, I prefer the 12% interest only option, as it has the first charge. I may invest in that, what is the min? I was thinking about £3-4k, but I will think that over. What made you prefer the second charge option (I'm just checking that I have correctly interpreted both options)?

    Minimum is £1 I think. Personal preference really when it comes to amortising or interest only, I prefer amortising but missed this one as I was on holiday so have gone for a bit of the IO one

    I need to think how much in total I want to lend, and over how many investments (how many are likely to be available over any 4 year span). If I want to invest a total of say approx £40-£50k at any one time, that would be £3-4k per loan. If I assume that I will be interested in say 50% of the opportunities, is it likely that 8 opportunities (in property only) are likely to be offered per annum?

    ABL don't have many new loans, and only a subset of those are property so you may struggle to get 8 opportunities in a year. Again, personal opinions but I would rather be spread across a lot more loans than 8 @ £4k to spread the risk, 25 @ £2k minimum for a £50 investment. Additionally, in your situation with a number of BTLs why put more of your eggs into the same sector (property)?

    If all that is feasible, I think I would target about 4 loans per year at £3-4k each, maybe double up on ones that look particularly tasty.
    Originally posted by chucknorris

    Have a look at moneything for a wider range of property based opportunities, along with other asset types. Again not a fast deal flow but IMO well thought out offers in the main with good support from the team there. Collateral is another I use, deals are generally a lot smaller but there is a steady flow of "pawn broker" type loans secured against jewellery and the like (with trade buyers underwriting the valuations and prepared to step in and take on the assets if repayment problems occur.

    As with all things though - DYOR.
  • jamesd

    Do Bondrate and Ablrate provide annual interest earned statements for completing tax returns?
    Originally posted by chucknorris
    Don't know about BondMason. Ablrate does, though they are still working on some improvements that are needed to fully correctly handle secondary market trades, largely related to accrued interest paid when buying and CGT reporting. The tax treatment for various things differs between platforms so it's something to get familiar with for each.

    on that pub/restaurant opportunity, I prefer the 12% interest only option, as it has the first charge. I may invest in that, what is the min? I was thinking about £3-4k, but I will think that over. What made you prefer the second charge option (I'm just checking that I have correctly interpreted both options)?
    Originally posted by chucknorris
    £1 minimum. I tend to have as much opportunity to invest at 12% as I want overall so for that one offered in both forms I preferred to take exposure to the higher risk/reward amortising second charge. I've done the same at MoneyThing for some split 13% second/10% first charge interest only loans.
    I need to think how much in total I want to lend, and over how many investments (how many are likely to be available over any 4 year span). If I want to invest a total of say approx £40-£50k at any one time, that would be £3-4k per loan. If I assume that I will be interested in say 50% of the opportunities, is it likely that 8 opportunities (in property only) are likely to be offered per annum?
    Originally posted by chucknorris
    I expect more than eight since they are growing. Though do consider some of the other types of security, they can be interesting and it's nice to diversify a bit. Loans secured on buildings are so common across various platforms that it'd be easy to have high property market exposure.

    You should also look at the secondary market because it's a good way to get invested quickly with diversification. Either buy instantly from the best priced offers or create a bid and see if any sellers are interested in the price you're offering, give it at least a week. Declaration of interest: I quite often sell to reinvest and diversify or just to free up money so there's a chance that if I'm offering the best price you might buy from me. I think not likely at the moment, but possible. The ability to buy and sell at premiums and discounts means that there's usually something to buy, though maybe not at an interesting yield.
    If all that is feasible, I think I would target about 4 loans per year at £3-4k each, maybe double up on ones that look particularly tasty.
    Originally posted by chucknorris
    Easily feasible though I suggest that you also open a MoneyThing account and look to split between the platforms. Maybe two thirds or three quarters Ablrate initially because of the ease of getting invested quickly via the secondary market. I expect that you could in a year be at an average of 1-3k per loan, depending on what takes your fancy.

    Those are two of the top three used platforms in a recent P2P forum poll. Also the two I prefer to recommend. Two up and coming are Collateral because of security diversification, like jewelry, and Funding Secure because of the tax advantage of its secondary market - interest all paid by borrower at end of loan like the pawn model but if you sell the buyer pays you the accrued interest as a capital gain in effect, normally reducing tax bill for those with available CGT allowance. Funding Secure loan descriptions and risk/return are much more varied than Ablrate or MoneyThing, definitely don't think of going for everything there. Collateral to a lesser degree. The other top three one is Lendy, losing a fair bit of its shine for reasons already discussed quite a bit. Of those five, Ablrate, FundingSecure and MoneyThing currently have full rather than interim FCA approval.
    Last edited by jamesd; 18-04-2017 at 8:02 PM.
    • masonic
    • By masonic 18th Apr 17, 6:58 PM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    For those who didn't receive a direct notification, FundingSecure has today launched its IF ISA.
    • TheShape
    • By TheShape 18th Apr 17, 9:43 PM
    • 906 Posts
    • 654 Thanks
    TheShape
    For those who didn't receive a direct notification, FundingSecure has today launched its IF ISA.
    Originally posted by masonic
    It's a shame that the ISA rules are so restrictive. I have a Lending Works IFISA (opened 16/17) and would like to open a FS IFISA and a Moneything IFISA as and when available. I might possibly wish to open others in the future.

    Funding them is not going to be straightforward as I'm going to need to plan for transfers of previous years Cash ISA money to fund them effectively. Even my previous years ISA money is actually in other accounts which will need returning to my flexible cash ISA prior to then being transferred out to the IFISAs. No more straightforward drip-feeding into multiple p2p platforms.

    This inconvenience is, of course, the price I (we) have to pay for receiving a significant tax saving on the interest.

    I do wonder if it will lead some to concentrate money into perhaps too few platforms as they might subscribe only to one/few IFISAs and not diversify especially if no ISA subscriptions from previous years are available for transfer.
    • nxdmsandkaskdjaqd
    • By nxdmsandkaskdjaqd 19th Apr 17, 7:23 AM
    • 449 Posts
    • 43 Thanks
    nxdmsandkaskdjaqd

    Those are two of the top three used platforms in a recent P2P forum poll.
    Originally posted by jamesd
    James, do you have a link to the poll results?
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