p2p investment

[jmann]

How much/percentage do you guys invest in p2p using company surplus cash? Currently I have invested around £200k, spread across 5 platforms. I am getting 4% interest which is much better than saving accounts. I know there are several p2p platforms which offer higher interest rate but I don't think its worth the added risk.

I am actually thinking about investing more money via p2p but at the same time bit worried about the level exposure without any protection. Looking for some feedback and experience with p2p. Do you think p2p market will crash?

Current p2p platforms:

ratesetter
zopa
landbay
growth street
assetz capital

[WTFH]

What debts are you currently servicing?

[chopper]

Dude,

Put the max into a SIPP that you can, invest it in Vanguard Lifestrategy 80% and Fundtech. This will enable a nice effective contribution from the tax man.
Wind the business up
Take the cash, less the MVL charges, less 10% CGT (assuming you qualify for entrepreneurs relief)
Then the money is yours personally to invest.
Take 2 years off.
Buy four 2 bed terraced properties in Leigh (£50k each) and rent them out for £400-£450 a month, after giving them a lick of paint. Sounds like a better return than 4% in Zopa.

If you are investing company money, you will pay Corp Tax on the profit, and you will pay more tax making the money yours. Better to take the hit earlier on, so that the profits are yours and should be more tax efficient.

Ultimately, £700k (you said a year ago you had £700k burning a hole) is nigh on useless to you in a business bank account, and you can't take it with you. Tax is inevitable, and I don't see tax rates going down. You could end up paying even more tax by clinging onto it in the business bank account.

[northernladuk]

IMO I'd be diversifying in to something else at those numbers. Spreading across platforms is wise but I'd be looking at something else. Not p2p to be totally comfortable. Not 100% convinced of p2p though hence the caution so up to you.

[jmann]

I have no debt. I am already taking £80k per year so I don't want to pay any more tax. I have no mortgage to worry about. Cash is simply sitting in saving accounts which is why I am looking for better interest rate via p2p.

I am actually looking into property development and hopefully I will move into that within 6 months. I want the surplus cash to generate passive income. Keep in mind £1000+ per month just from interest is not bad at all. Few years ago I was just earning £50+ per month.

I already have shares and stocks ISA. I am investing in funds and shares. I have invested via SEIS and VCT but these are all under my personal name. I am trying to generate more passive income using company surplus cash. That's why I am trying to figure whether to increase p2p investment or invest in something else.

[Darren at Fox-Bartfield]

BTL

I am getting 4% interest which is much better than saving accounts. I know there are several p2p platforms which offer higher interest rate but I don't think its worth the added risk.

May be a better return than a savings account but generally not as good as a BTL which tend to have better income return than the 4% plus the potential capital growth as well, especially if you're investing mortgage free. Like the idea of diversifying but seems quite a lot of exposure to a big chunk of cash that's has no protection.

[ChimpMaster]

I have no debt. I am already taking £80k per year so I don't want to pay any more tax. I have no mortgage to worry about. Cash is simply sitting in saving accounts which is why I am looking for better interest rate via p2p.

I am actually looking into property development and hopefully I will move into that within 6 months. I want the surplus cash to generate passive income. Keep in mind £1000+ per month just from interest is not bad at all. Few years ago I was just earning £50+ per month.

I already have shares and stocks ISA. I am investing in funds and shares. I have invested via SEIS and VCT but these are all under my personal name. I am trying to generate more passive income using company surplus cash. That's why I am trying to figure whether to increase p2p investment or invest in something else.

Interesting plan and not far off my thoughts too. Where are based? Do you have any prior experience of property or a network to leverage? (PM me if better)

It sounds like you won't be able to claim ER when/if you MVL, because you've been investing your company funds. However, you could possibly keep your Ltd Co, change the SIC and then run your property development trade through it.

[jmann]

Interesting plan and not far off my thoughts too. Where are based? Do you have any prior experience of property or a network to leverage? (PM me if better)

It sounds like you won't be able to claim ER when/if you MVL, because you've been investing your company funds. However, you could possibly keep your Ltd Co, change the SIC and then run your property development trade through it.

I am based in Surrey. I don't have any experience in BTL but I have been researching into this for the past few months. I already spoken to property tax specialist, so as soon as I can source good properties then it should be fine. If you have experience in this field please do PM.

I checked with my accountant regarding investing surplus cash in p2p and I was told as long as the investment is below 20% of company asset then it should be fine. So that means I can't invest any more in p2p. So I guess I need to concentrate in setting up SPV company for BTL.

[Pegasus]

I am based in Surrey. I don't have any experience in BTL but I have been researching into this for the past few months. I already spoken to property tax specialist, so as soon as I can source good properties then it should be fine. If you have experience in this field please do PM.

I checked with my accountant regarding investing surplus cash in p2p and I was told as long as the investment is below 20% of company asset then it should be fine. So that means I can't invest any more in p2p. So I guess I need to concentrate in setting up SPV company for BTL.

Can you please confirm with your accountant whether setting up a SPV for BTL, and giving a loan from your parent company to SPV for this purpose, affect your chances of getting Entrepreneur Relief later on?

Thats what my accountant told me last year, but did not appear 100% confident. So will be useful to get more opinions on that.

Thanks.

[jmann]

Can you please confirm with your accountant whether setting up a SPV for BTL, and giving a loan from your parent company to SPV for this purpose, affect your chances of getting Entrepreneur Relief later on?

Thats what my accountant told me last year, but did not appear 100% confident. So will be useful to get more opinions on that.

Thanks.

I don't think it would affect entrepreneurs' relief since it will be classed as a loan between 2 companies. I can't see that being classed as an investment. In any case I will check this with my accountant.