Part ownership of a Ripple Wind Turbine, fancy it?

[nowty]

Just read up on "trading allowances", so the way I read it is the £1000 trading allowance for WT2 is in addition to the £1000 interest allowance (if basic rate tax payer) applicable for WT1 income.

And these two are in addition to your personal tax allowance (I think).

[TCA]

Yes, they are additional to your personal allowance but I'd be very surprised if the tax treatment is different between WT1 and WT2 unless Ripple have gained some sort of HMRC dispensation. More likely the trading allowance supercedes the person savings allowance, so the £1,000 trading allowance is all you get, across however many wind farms you buy into.

[nowty]

I like that, different approaches. Nowty rounds up the wattage owned, I round up the financial figure instead!

For WT1 I underpaid by 16p so I actually own 2.998kW.

For WT2 I purposefully paid £1 more and own something like 2.191kW

But the website rounds everything to nearest watt.

Balance has been restored.

[nowty]

Yes, they are additional to your personal allowance but I'd be very surprised if the tax treatment is different between WT1 and WT2 unless Ripple have gained some sort of HMRC dispensation. More likely the trading allowance supercedes the person savings allowance, so the £1,000 trading allowance is all you get, across however many wind farms you buy into.

WT1 is definitely classed as an interest payment.

The difference seems to be,

WT1 is wholly owned by the CoOp.
WT2 is owned by a special purpose vehicle (SPV) which the CoOp owns a proportion of shares.

[AE-NMidlands]

I thought a proportion of our WT1 payments will be interest, as after 25 yrs the ownership has passed to the Coop. So I was expecting to deduct 4% of my initial payment from each year's income to get to the figure for the £1000 interest tax allowance/ceiling.
A

[TCA]

I thought a proportion of our WT1 payments will be interest, as after 25 yrs the ownership has passed to the Coop. So I was expecting to deduct 4% of my initial payment from each year's income to get to the figure for the £1000 interest tax allowance/ceiling.
A

That's correct and Ripple will supply you with the figures split between interest and capital. But the goal posts have shifted for WT2 and I'm wondering whether ongoing discussions with HMRC have influenced this, or whether as Nowty says, it's because of the SPV in WT2.

[Inskip75]

I'm in with 1002W purchased to add to 866W on Graig Fatha - I was a bit behind on WT1

Not quite to Nowty's level but enough for us!!

[nowty]

I thought a proportion of our WT1 payments will be interest, as after 25 yrs the ownership has passed to the Coop. So I was expecting to deduct 4% of my initial payment from each year's income to get to the figure for the £1000 interest tax allowance/ceiling.
A

On WT1 the CoOp always owns the asset, from the start and after 20 years if its still operating. Its members will always be members until the CoOp is wound up. The return of capital is simply an accounting method to reduce your tax liability and to nominally value your remaining stake if you want to sell up.

The 25 years is the expected life of the turbine but I note most windfarm investment companies now assume 30 years as the latest designs without gearboxes are more reliable.

[TCA]

Yes, they are additional to your personal allowance but I'd be very surprised if the tax treatment is different between WT1 and WT2 unless Ripple have gained some sort of HMRC dispensation. More likely the trading allowance supersedes the person savings allowance, so the £1,000 trading allowance is all you get, across however many wind farms you buy into.

WT1 is definitely classed as an interest payment.

The difference seems to be,

WT1 is wholly owned by the CoOp.
WT2 is owned by a special purpose vehicle (SPV) which the CoOp owns a proportion of shares.

Just had an online chat with Sarah Merrick. Her replies to my questions were "The treatment is the same between the two wind farms" and "it's not as a result of discussions with HMRC, we felt it was clearer for people". No direct mention was made to my references of interest and personal savings allowance versus trading allowance, so it's maybe something she doesn't know the details of, but she's asked the Finance Director to get in touch to clarify. I'll post on here when I get an update but it won't be today as he's apparently not in the office.

If the tax treatment is the same across both WT1 and WT2, then given trading allowance is what's mentioned in the most recent publication, then you'd have to think that's what applies. Although you'd have thought such a change would've been communicated to WT1 members and that it's not really open to Ripple to choose tax treatment just because it makes it "clearer for people". We'll see what the FD says.

[CrofterMannie]

FYI Farr windfarm is an older generation of turbine (commissioned in 2006).
Last year they applied for planning permission to extend operations from 25 to 35 years and they are expecting to operate for the additional 10 years without any significant upgrades.

If a bunch of creaky old turbines can do 35 years they you would hope that your shiny new ones could too.