Private Mortgage - Private Income?

handytips

Sorry Holly i think you are wrong on this one, if you are not paying tax on winnings and also not claiming benefits, HMRC will take a dim view or this, basically you are earning a living from gambling and not paying any tax, therefore you are getting everything for free. I know someone who does this via betfair and has set up a ltd company, thier books go through an accountant and they pay tax, even so no lender will touch them due to the volatile business they are in, the margins are small and the outlay is huge, and as for money laundering i think you are also incorrect, for eg, pro gambler will lay bets through many sources especially on a racecourse where there are usually upwards of 30 bookmakers, if they lay £3k on a horse at 5/1 and it wins that means they have £18k in CASH, if a bank sees them drip feeding this into various accounts surely that will stir up a few suspicions. I gave up gambling 7 years ago now thankfully and in the past i can honestly say i had no value for money at all as it basically becomes worthless and its only use is to lay the next bet, i had many good years gambling but eventually the curtain comes down and when it does it happens awfully quickly, just like the credit crunch really.

holly_hobby

Sorry HT, but I don't accept that -at all - and rather than guess you/we should make sure that any info published here is both known to be accurate and correct.

Firstly I would be the first one to say that evasion of income tax is a criminal offence and not to be excused, however working to mitigate ones tax liability, or working within the published rules and paramaters of HMRC is not. And whilst I don't want to see anyone "get away" with their moral and legal obligation of paying income tax, neither do I want individuals to suffer tax where legally there is neither no requirement nor legal basis to do so.

That being said ....

Gamblings ( if not conducted as a trade, even if deemed as your main source of income) and in direct contradiction to your claims, are not automatically treated as income for income tax purposes, as in the first place to do so would fundamentally mean that all losses may also be offset - and the law of averages on gambling is you lose more than you win (as you have said so yourself with your own history of gambling) -which HMRC readily accept (and no doubt influenced their rulings).

HOWEVER, if you are carrying out a trade i.e acting as a bookmaker, giving tips to others for gain, spreading bets as a main source of income, owing racehorses betting on them and winning, running a licence prems where you also gamble and win (list not exhaustive) - that is constitued by HMRC as an income clearly arising from a trade associated with gambling, and you must duly register under your correct schedule and prepare your annual submissions accordingly.

My comments and guidance to the OP are clearly supported and documented by HMRC ref guide:- http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm
(which I would suggest the OP views and prints off for documentary reference).

And also previously tested under case law - ref:- Graham v Green (1925) and Down v Compston (1937)

There is also in the public domain confirmation letter from HMRC (which I recently seen but can't locate it now) where the author asked this very question, and were advised by HMRC that only if the indiviudal is deemed as conducting a trade in gambling aka bookmaker, etc, that income from gambling would be taxable.

I grant you its a loop hole - and the individual would clearly not receive any benefits that are reliant upon NICs (unless he is making a voluntary contirubution), but its there and completely legal and proven.

Your friend with his Ltd Co - which actually means that in effect the company was placing the bets not the individual ?!.

Notwithstanding the above, yes absolutely necessary and legally required (a Co that is, not a limited co), if he was conducting any trade in gambling (which includes spread betting if it forms the individuals main source of income, which I think betfare comes under a spread betting catagory). If he was not conducting a trade or involved in spread betting as a main source, then it looks as though the establishment of any Company (let alone a Ltd Co) was both unnecessary, cost incurring (ltd co establishment and books are more costly to construct and submit than sole trader for example), with him (via his ltd company) also funding an unnecessary tax bill (both corporation and personal and/or dividend, with employer & employee NICs too), than would have otherwise been (quite legally) avoided.

BUT the fact remains that simply sourcing ones sole income from gambling winnings, is not on its own sufficient to constitute a trade - and if any case were to be brought about by HMRC (notwithstanding the paper BIM22017), I would wager counsel would have no issue in successfully defending any claim laid.

None registration for income tax nor claiming of benefits would certainly be an issue, if the indvidual from HMRC investigations, were clearly self sufficient, yet unable to prove the source or legality of their income. In this case, the OPs friend is a gambler, with one would imagine documentary evidence and records (or the ability to obtain such ) in order to prove both the source and legality of all gambling income received over the given period. (assuming of course that licensed prems or licensed UK internet providers have been/are the source of such income- as the US have a diff taxation system on gambling earnings).

Money Laundering - again you have the wrong end of the stick on the basic fundamentals of what money laundering is, and what would form a breach of ML regs. Gambling (if conducted on licensed premisis, of which a race course is of licensed), does not form a breach of law or constitue a breach of ML regs, neither is "drip feeding" any winning capital into any of your banking acccounts - unless of course the capital you are either gambling with (in an attempt to effectively clean it), or depositing in a banking institution, is actually derived from unproven/unlawful or illicit sources.

Hope this helps clears things ..

Holly

xyellowx

op been loads of threads of this nature have a search about ,
the bit i dont get is they all seem to claim to win very large sums of money daily so if thats the case why do they want to get a 25 year mortgage? surely they could save for a year then buy a large house out the winnings

handytips

Exactly and probably prooves that most of these so called pro gamblers are really pro bullshysters

Ferferksake

Many thanks for all the comments regarding tax status etc, however the person I am enquiring for already knows the answers to that.

Holly, I think my ability at gambling is about the same as yours . Thankfully, there is one family member that has been doing this as a living for about ten years now and he has mentored about 3 others who are also doing this as a career. I did try to learn as I thought this would be great for early retirement, but unfortunately I just kept losing, I guess you have to have the right mentality for it. . You asked why the cloak and dagger, well "gambling" (the mentor refuses to call it that) can be a touchy subject for some people as you can see by some of the responses.:rotfl:

The person I'm enquiring for is the youngest of the bunch and has only been doing this for about 2 years, so, as he doesn't win "megabucks" (nor were such claims made!), but does regularly earn more than I do as a Managing Director, he can't afford to buy a place without a mortgage, but is confident of being able to service one. His parents are downsizing so this is the ideal time for him to leave the nest. We all know you can't go to your bank manager and declare your income as "poker receipts" to secure a mortgage, hence my original question:

Ferferksake wrote: »

Are there companies, groups or agencies where private mortgages or peer to peer lending can be applied for?

Any ideas anyone?

(xyellowx - I did search for threads on peer to peer mortgages but found nothing. You say there are "loads of threads of this nature" so could you please post a link if you have one? Thanks.)

handytips

Sorry there is nothing out there for him, and that is the Bottom Line.

Bigsmak

Off topic, but Poker is not Gambling, it is a game of skill.

_Andy_

Bigsmak wrote: »

Off topic, but Poker is not Gambling, it is a game of skill.

Agreed and I think that's been lost in this thread. A solid poker pro is far different from someone betting on horses, for example

Thrugelmir

_Andy_ wrote: »

Agreed and I think that's been lost in this thread. A solid poker pro is far different from someone betting on horses, for example

There are pro's when it comes to betting on horses, and they don't just read the form guides either.

Conrad

Ferferksake wrote: »

Are there companies, groups or agencies where private mortgages or peer to peer lending can be applied for?

Yes, and I know a couple of small but reputable private lenders that do this sort of thing. Not the sort of info I can give out publically but if you Google search you should find what you need but beware there are some total sharks out there.