I’ve been preparing my UK personal self assessment returns to include P2P and Property Crowdfunding income. This posts looks at what I’ve found to be technically necessary and follows up with my interaction with the platforms I invest in: exporting tax reports and specific tax questions. I’ve already written about how the UK government calculates tax on P2P income here, but have pasted in the relevant parts: Read more “UK P2P Self Assessment Taxes”
CurrencyFair is a low-cost way to do international money transfers. I first wrote about it when researching how to transfer money to European P2P lending sites. CurrencyFair charge a fee of €3/£2.50 to transfer out money, is generally free to transfer in money, and a 0.25% or 0.3% fee on the currency exchange itself.
CurrencyFair claim that around 10% of their transfers actually beat the interbank rate. This is because the matching is done internally on a peer to peer basis. Here are a couple of tips to help you get the best possible exchange rate when using CurrencyFair with an example I did earlier today. Read more “How to Get a Better Exchange Rate on CurrencyFair”
Frazer Fearnhead, founder and CEO of The House Crowd, explains how he turned frustration with the banks into a multi-million pound idea:
The idea for The House Crowd was sparked almost entirely from frustration.
It was 2011, and I’d hit hard times thanks to the 2008 financial crisis. A time when many people were struggling due to the banks’ greed.
I’d left my career as a music industry lawyer to go into property full time. And why not? It stood out as one of the simplest and most rewarding investment options around. However, there was one huge problem: accessibility.
Two years after the financial crisis, there were plenty of opportunities to invest, but it was proving impossible for normal people to receive the finance to get back in the game.
Suddenly the answer was obvious: why not cut out the banks, crowding people together to invest and share the profits? Read more “Frazer Fearnhead on Property Crowdfunding”
This posts compares 5 of the best hassle-free, automated P2P lending options.
Managing peer to peer investments and doing due diligence on individual investments can become almost like a part-time job, where the extra interest you make is just compensation for your time spent. Let’s make a theoretical example of two investors with a £15,000 investment pot:
Investor A: Manual P2P Investor. Investor A spends an hour and a half a week logging onto a few different sites and having a read through project proposals and valuations. Once or twice a week they have the frustration of ‘Fastest Finger First’, where a really popular loan is released at a certain time and they have to be as quick as lightning to get a share. They also waste some time manually doing transfers between platforms and their bank. There’s no economic downturn and their hard work pays off with an annualised return/XIRR of 10%, or £1,500. They pay 20% tax on anything above the £1,000 tax-free interest limit which reduces it to £1,400. Total hours spent over the year: 90.
Investor B: Hands-Off Investor. Investor B spends a few hours setting up their investment at the start of the year but then barely check it afterwards. They make an annualised return/XIRR of 7%, or £1,050. Treating them for tax in the same way as investor A, this comes down to £1,040. Total hours spent over the year: 10
In this particular example, net of tax investor A earns an additional £360 for 80 hours more work, or £4 an hour. So, if you want to use an automated, ‘hands-off’, ‘fire-and-forget’ platform, which is the best one? Read more “Which is the Best ‘Hands-Off’ P2P Investment Platform?”
So, you’ve got past the first hurdle of understanding your tax obligations as a UK investor on a continental European P2P lending platform. Now, before starting to look at individual websites, the next thing to research is how much you would lose in exchange rate fees or spreads. What’s the cheapest and most reliable way to transfer British pounds to Euros? Read more “How to Transfer Money to EU platforms”
Recently I came across a worked example which exemplified the power of investing early. It compared one investor who put away £2,000 per year between the ages of 19 and 25 then nothing after, and another who put away the same £2,000 each year from 26 to 65. Surprisingly, the younger investor generated more in interest by the age of 65 than the late starter! Read more “Compounding Returns & The Importance of Investing Early”
I’ve had a number of people contact me about this first time mistake, so I wanted to write a specific post to let you know the ‘trick’ before you make your first investment. With a few more clicks you can get a rate of return 0.1%-0.4% higher than the ‘Lend it now’ rate. Read more “Newbies: Don’t Invest in RateSetter Before Reading This Common Mistake”