Peer to peer (p2p) lending in UK for USC

Have any US citizens on here been brave enough to look into tax/reporting implications of investing via UK peer to peer lending sites? There are various flavo(u)rs which would might need to be treated differently I would think, some as loans to small businesses (Funding circle), others more for individuals (zopa), etc.

Would be interested in any views or experience!


ps I can't find any other meaningful posts by searching the forum or the interwebs (just this very quick answer http://talk.uk-yankee.com/index.php?topic=81462.0, [nofollow] but that was over 1 year ago so maybe things have moved on).

At a minimum you would report the interest. Whether you are investing directly in a single project, pooling your money, or buying something like a debenture in an environmental project will dictate how the money is taxed in the US.

Following an excellent article on this by the BBC I did look into it, but to do so required a UK residential address.  If you could do it then I'm pretty sure you would file it on your US return as interest income, and create a 1099-INT as I do with other UK bank interest.

I expect (but have not researched) that UK P2P has broadly the same US tax consequences for the US person investor as US P2P.

These items are excellent guidance:
http://www.mymoneyblog.com/lending-club-prosper-taxes-1099.html
http://static.lendingclub.com/tax/Tax-Guide-for-Retail-Investors-2013.pdf

FYI, you have to be a UK resident to use ZOPA, which I am assuming the OP is.  If so, maybe he can be a pioneer for the site

http://help.zopa.com/customer/portal/articles/1103738-who-can-lend-at-zopa-

Who can lend at Zopa?
Anyone aged 18 or above who is a UK resident and has a UK current account can lend at Zopa without restriction.

Thanks for the information, it looks like the 1099 route is pretty straightforward for dealing with interest income. I am a UK resident by the way.

What about reporting, would it be likely to count as a foreign financial account (of a sort), and be put on the FBAR, which I have to do anyway?

At first reflection I don't think a p2p investment would be any of the harder ones to deal with like a foreign trust (so no 3520), or a PFIC (nothing to do with owning shares).