Interest income is generally taxable
Platforms typically deduct resident withholding tax (RWT) at source before paying a lender, similar to other New Zealand interest-bearing investments. A lender is responsible for declaring this income as required in their own tax return.
Records worth keeping
Keep the following records for each tax year:
- statements or records from the platform showing interest paid and any tax withheld
- records of amounts lent to, and repaid by, each opportunity
- records of any default or shortfall on a specific loan
What happens with a loss
New Zealand has specific tax provisions that can, in some circumstances, allow a deduction for a loss on a defaulted peer-to-peer loan. Whether this applies, and how, depends on individual circumstances and is a question for a tax professional or Inland Revenue, not something LendCap advises on.
This is general information, not tax advice
This guide is general information only. LendCap does not provide tax advice, and a lender should get independent advice from a tax professional or Inland Revenue before relying on anything here.
