Mortgage Calculator - Unusual Incomes

steve2005

Just a general wondering really, bear with me I'll explain it best I can.

Person 1 in employed full time and has income of £40k a year
Person 2 is not emplyoyed but has income of £40k a year

There is no way for Person 2 to prove their income other than bank statements each month showing that the money goes in every month.
Would this evidence suffice to a mortgage lender?

TIA

jjlandlord

By 'not employed', do you mean self-employed?
Surely, to have an income of £40k pa, Person 2 must do some kind of (legal) work.

Lender would ask for business accounts and tax returns for the previous 2-3 years, I think.

olias

No, there would have to be more documentary evidence, and the bank would have to agree the income stream - trust fund, pension etc etc. Also I suspect money laundering rules would also come into play.

Olias

theartfullodger

steve2005 wrote: »

...
Person 2 is not emplyoyed but has income of £40k a year

There is no way for Person 2 to prove their income other than bank statements each month showing that the money goes in every month.
.....

Does HMRC know about this?? Do they declare it to HMRC (The clue is in the name of the tax: "INCOME tax")If there;s no way of proving this income (could be from being a rent-boy/prossie {no I don't condemn.. } or stealing handbags off grannies. ... {yes I do condemn..}....) why would anyone, let alone a mortgage lender, believe this is legit & going to carry on...

Cheers!

steve2005

jjlandlord wrote: »

By 'not employed', do you mean self-employed?
Surely, to have an income of £40k pa, Person 2 must do some kind of (legal) work.

Lender would ask for business accounts and tax returns for the previous 2-3 years, I think.

ha, yes legal. Person 2 owns properties overseas and get income from them.
With regards to actual physical, mental or other work, no. None.

jjlandlord

steve2005 wrote: »

ha, yes legal. Person 2 owns properties overseas and get income from them.
With regards to actual physical, mental or other work, no. None.

OK, so he has tax returns, right?

steve2005

The due amount of tax is paid in the country the properties are located, yes.

persa

steve2005 wrote: »

The due amount of tax is paid in the country the properties are located, yes.

But is this person UK resident?

Generally speaking, those who are resident in the UK must file UK tax returns based on their worldwide income, unless all that income is already taxed at source (e.g. PAYE, BR taxpayer receiving net income from bank, etc).

E.g. as a UK resident individual, I would have to file tax returns in the UK for foreign rental income, even if I'd paid tax on that income abroad. I'd claim relief for the foreign tax already paid, and I might have no further UK liability, but I'd still have to file paperwork here.

steve2005

Ah I see what you mean now.
Yes each yeah they send all the relevant docs to our friends at HMRC showing that the tax was paid at the time of earning, PAYE if you like, but their version of it.

ACG

I think you would be best getting all of your paperwork together and then seeing a broker.

I would imagine this could be put through assuming there is paperwork from HMRC going back a couple of years. I think you could possibly do this yourself, but with a broker they can go and speak to their account manager or an underwriter directly and get someone to put their name next to it being ok before making an application.

There will be some lenders who may not do it or may put you through the mill before offering it.