I am thinking of putting some money into P2P lending.

I am a higher rate tax payer, but my wife does not pay tax (has income tax allowance to spare).

If my wife lends to Zopa or Funding Circle, how is income tax accounted?

Is it deducted (and at what rate), or is it paid gross and you put the interest on your HMRC tax return?

I saw on an earlier post that new tax is the greatest threat to P2P lending - is something about to come to make P2P less attractive as an investment option?

Would appreciate any foolish thought son this.

FD