lOOKING TO PICK YOUR BRAINS...ABOUT AN EBT....

whoareya

welshsheep wrote: »

how long does this take to show up on your credit reference?

Answering your original question, I believe this depends on when your creditors update your file. I believe this is on a monthly cycle but depends with some companies. I'd be inclined to chase your creditors up as they have no care about the effect on your rating.

whoareya

http://www.contractorumbrella.com/bn66.html

Source for Thrugelmir comment

WellKnownSid

Does no-one want to pay tax any more? :eek:

maninthestreet

Another self-employed person who wants to appear as if they low income when it comes to taxation, but at then same time wants it to appear they have a much higher income when it comes to applying for a mortgage??

whoareya

maninthestreet wrote: »

Another self-employed person who wants to appear as if they low income when it comes to taxation, but at then same time wants it to appear they have a much higher income when it comes to applying for a mortgage??

Absolutely and why wouldn't people look for an efficient way to receive their income? It's not illegal so what is the issue?

As someone has already posted EBT's have now come to a close so you can come down from your high horse but realise that there are plenty of other efficient methods other than this specific example.

neverdespairgirl

whoareya wrote: »

Absolutely and why wouldn't people look for an efficient way to receive their income? It's not illegal so what is the issue?

The issue is that it doesn't count as income, and therefore isn't taxed as income, so is difficult to rely on as income.

GMS

Cant have a system which minimises taxable income on one hand yet maximises it on the other i.e when applying for finance.

Pick one or the other.

WellKnownSid

whoareya wrote: »

Absolutely and why wouldn't people look for an efficient way to receive their income? It's not illegal so what is the issue?

As someone has already posted EBT's have now come to a close so you can come down from your high horse but realise that there are plenty of other efficient methods other than this specific example.

Have come to a close = made illegal

No-one is on their high horse, but there is a difference between tax efficiency and tax avoidance.

If people (including mortgage underwriters) are struggling to understand setting up an EBT and taking "non-repayable permanent loans" from your business via that EBT is a legitimate form of income, you can be sure it crosses the line. HMRC have been trying to outlaw their use as avoidance tools since 2002, so they thought they crossed the line too.

Paul_H_4

The underwriters are taking this approach for one/some of the following reasons:

a) You have a personal debt to the trust which they have to consider when they review your current borrowing position. Whilst you also have an asset in that you are the beneficiary of the trust, the trust cannot fully distribute the funds to you without some sort of interest charge.
b) Some of the EBT's don't work and will be attacked by HMRC. There is therefore a risk that in a few years time you will be liable to pay the tax / interest / penalties. Therefore there is a risk to the serviceability of your debt.
c) Working on the basis that the scheme works then you do not have income for the period, you only have a loan. The EBT is only valid from a tax perspective if it meets the legal definition of being a loan. Therefore you cannot say it is income.

If you used one of the better providers they have relationships with banks who are aware of the relevant scheme workings and are more likely to lend. Might be worth asking the provider if any such relationships exist.