I invest thru a P2P investment website. I understand that I can buy an interest bearing loan (as an investment) on the 'secondary' market at a cost of the capital plus accrued interest at the time of purchase (as the interest is paid with the capital at the end of the load period). When the investment terminates I receive the capital and ALL the interest and am taxed on ALL the interest. What I would like to know is what tax liability does the seller have?
EXAMPLE The original loan is £1,000 for 12 months. The monthly interest is £10. After 10 month I buy the loan for £1,000 plus £100 (accrued interest over 10 months). At the end of the 12 month. But what about the seller's tax liability? If they are liable to CGT it appears to me that the interest has been taxed twice??????
Any ideas please? This is not a problem to me I am just curious....as to if the HMRC are "conning" someone!
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