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Thread: Harmoney

  1. #2191
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    Now that the tax certificates are out I can do my tax return. It's my first year for putting P2P in my tax return.
    1) I assume you all claim the lending fees as expenses in your tax returns?
    2) Which box do you put them in?
    For me the non-resident online help says I can't claim expenses against non-resident passive income, i.e. interest.

    After further investigation, looks like residents and non-residents are treated slightly differently. Residents could claim it in box 26 "Other expenses and deductions". Non-residents have a similar box, but as before can't claim expenses against passive income. P2P lending. Not fair.
    Last edited by kiwi_on_OE; 20-05-2017 at 01:13 AM.

  2. #2192
    Senior Member
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    Quote Originally Posted by kiwi_on_OE View Post
    Now that the tax certificates are out I can do my tax return. It's my first year for putting P2P in my tax return.
    1) I assume you all claim the lending fees as expenses in your tax returns?
    2) Which box do you put them in?
    For me the non-resident online help says I can't claim expenses against non-resident passive income, i.e. interest.

    After further investigation, looks like residents and non-residents are treated slightly differently. Residents could claim it in box 26 "Other expenses and deductions". Non-residents have a similar box, but as before can't claim expenses against passive income. P2P lending. Not fair.
    Then come back to NZ!

  3. #2193
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    My Tax Statement shows an incorrect address for me - anybody else have this problem?

  4. #2194
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    Quote Originally Posted by Finite View Post
    My Tax Statement shows an incorrect address for me - anybody else have this problem?
    No all good here x 2. Did you get the Data you expected?

  5. #2195
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    May 2016
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    Quote Originally Posted by kiwi_on_OE View Post
    Now that the tax certificates are out I can do my tax return. It's my first year for putting P2P in my tax return.
    1) I assume you all claim the lending fees as expenses in your tax returns?
    2) Which box do you put them in?
    For me the non-resident online help says I can't claim expenses against non-resident passive income, i.e. interest.

    After further investigation, looks like residents and non-residents are treated slightly differently. Residents could claim it in box 26 "Other expenses and deductions". Non-residents have a similar box, but as before can't claim expenses against passive income. P2P lending. Not fair.
    Obviously I know nothing of your personal tax situation but it might not matter because whatever tax you pay in NZ gets offset against UK tax. In UK you can claim P2P expenses and writedowns right?

  6. #2196
    yeah, nah
    Join Date
    Mar 2017
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    Two Months in: Have managed to double up and then some, switching to 4 notes per loan for most loans.

    Invested: $54,229.89
    Loans: 635
    Avg. Loan Size: $85.31
    Auto-Lends: 190
    Avg. Interest: 22.79% (Weighted)
    Avg. Exp. Return: 15.73% (Weighted less Default+Fees+Tax)

    Expected Monthly Return to deal with: $1,471.20 (Principal + Interest : excludes payoffs)
    XIRR.: 19.23% (starting to stabilise now)
    Interest Paid to date: $302.96

    After doing some calculations of my own I've settled on a Risk Grade spread from B3 to E3, which I feel will give me a good return with enough loans to keep up with the total investment I'm aiming for - I'll most likely narrow this spread as time goes on and I get a better feel for Grade defaults and timing, and other variations over time.

    Loan Term Graph:

    H-Term.png

    Risk Grade Graph:

    H-Risk.png

    Risk Grade Detailed Graph:

    H-Risk2.png

  7. #2197
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    Quote Originally Posted by myles View Post
    Two Months in: Have managed to double up and then some, switching to 4 notes per loan for most loans.


    ......After doing some calculations of my own I've settled on a Risk Grade spread from B3 to E3, which I feel will give me a good return with enough loans to keep up with the total...


    ......Risk Grade Detailed Graph:

    H-Risk2.png

    Like I have mentioned before myles, after 2 years, I was shocked by the number of E an F grade defaults 13/16 to be exact. As I have not been taking any new E and F grade loans for a number of months, I now have one quarter left of the originals through default or repayment that will all come due between now and November 2018. My statistics show a NIL or Negative return once all these loans terminate.

    I'm thinkin why turnover this money when the end result will be Zilch!

    I strongly agree with B2 to D4: should I be charging fees for my opinions through experience!!

  8. #2198
    yeah, nah
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    I don't mean to be rude, but I wouldn't pay for your advice. From what you've said, I've either missed something completely or you don't get the whole risk vs default thing.

    You've indicated before that you have had 95 E and F loans, 13 of which have defaulted (in 2 years?) - this sounds completely normal to me - this is very close to what Harmoney suggest will happen. You are getting 30-40% interest on these loans, defaults are to be expected.

    Calculate how much interest you've gained from the other 80 loans that didn't default - if they were paid out early, you need to consider reinvestment, otherwise you are not looking at the whole picture - that money was freed up to earn further interest (and some defaults no doubt)?

    As a very simple example to get 'Zilch':

    If you had 100 of these E+F loans ($1 each = $100 invested) at say 35% interest and if you were to assume 50% of interest lost as tax+fees, this works out at 85 paid out in one year ($85 principal returned + $30 interest - $15 tax+fees = $100) and 15 defaults from day one ($0) to get 'Zilch' - anything above that is profit? You should be able to claim some tax back from this as well, which means it's still not 'Zilch'.

    Clearly you would expect to get some significant return in the following years from at least some of these loans that continue past year 1 and the money that would be reinvested from those paid back early.

    Note that the 15% default rate used in the example is the maximum expected for an F5 loan!

    Or do I have my numbers wrong?

  9. #2199
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    If you want to pay for my advice instead LOLLoan defaults start to kick in from month 9 or 10. Which is inline with Harmoneys stats.There is another graph somewhere a user here posted that takes into account Harmoney stats. It showed actual returns for each grade vs actual defaults.Using that data it showed returns were low if you invested in E and F. In fact returns were higher using D grades.

  10. #2200
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    [QUOTE=myles;666932]I don't mean to be rude, but I wouldn't pay for your advice.....
    QUOTE]
    Let's be clear, I said: "...should I be charging fees for my opinions through experience!!", I don't give advice.

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