Section 412A | Relief for irrecoverable peer-to-peer loans ^F1

(1)A person (“L”) is entitled to relief under this section if—

(a)L has made a peer-to-peer loan (“the relevant loan”),

(b)the loan was made through an operator,

(c)L has not assigned the right to recover the principal of the loan, and

(d)any outstanding amount of the principal of the loan has, on or after 6 April 2015, become irrecoverable.

(2)But if the outstanding amount became irrecoverable before 6 April 2016 L is entitled to relief under this section only on the making of a claim.

(3)The relief is given by deducting the outstanding amount in calculating L's net income for the tax year in which the amount became irrecoverable (see Step 2 of the calculation in section 23).

(4)The deduction under this section is to be made only from income arising from the payment to L of interest on—

(a)the relevant loan, and

(b)any other loan within subsection (5) or (6).

(5)A loan is within this subsection if—

(a)it is a peer-to-peer loan made by L, and

(b)it was made through the operator through whom the relevant loan was made.

(6)A loan is within this subsection if—

(a)the loan was made by someone other than L,

(b)the right to receive interest on the loan has been assigned to L,

(c)the right was assigned through the operator through whom the relevant loan was made, and

(d)either—

(i)L is a person within paragraph (a), (b) or (c) of section 412I(4), or

(ii)the recipient of the loan is a person within one of those paragraphs and the loan is a personal or small loan.

(7)The amount deducted under this section is limited in accordance with section 25(4) and (5).

(8)In this section “irrecoverable” means irrecoverable other than by legal proceedings or by the exercise of any right granted by way of security for the loan.