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HMRC internal manual

Savings and Investment Manual

Peer to peer lending: Calculating peer to peer tax relief: Relief allowed against interest received in the same tax year - Through different platforms

The person who made the loan, or the person to whom the rights to recover the principal of the loan have been assigned, are both referred to here as simply as the Lender.

The Lender can claim relief on an irrecoverable peer to peer (P2P) loan that became irrecoverable on or after 6 April 2015, against interest received from loans made through a different P2P platform to that of the now irrecoverable loan.

This relief can only be claimed if the loss resulting from the irrecoverable loan cannot be used wholly or partly against interest received through the same P2P platform as the now irrecoverable loan.  This is because the irrecoverable loan must be first set off against interest received in the same tax year through the same P2P platform.

The relief should be claimed in a tax return.

In order to claim relief in a tax return the lender should deduct their available relief from the P2P interest that they have received in that year before entering the figure in their tax return.

Example

Geoffrey in tax year 2013 made 5 loans through platform ‘Zapo’ and 6 loans through platform ‘SateRetter’.

When one loan made through Zapo became irrecoverable in tax year 2016, the irrecoverable amount was set against interest received from Zapo loans in the year. However, the irrecoverable amount exceeded the amount of interest received from the other Zapo loans in 2016.

Geoffrey then set off the remaining irrecoverable amount against interest received from SateRetter loans in tax year 2016.