Joint mortgage for self-employed when one person freelances for the other

hastingleigh

Hopefully the thread title isn't too confusing!

Basically, I am about to apply for a mortgage with my partner, both of us are self-employed (for 10 and 5 years respectively). Our declared profit on our tax returns are approx. £48k (me) and £7k (my partner).

However, most of my partners income comes from me – she freelances for my on projects and then invoices me.

When our lender goes through our documentation (tax returns, tax calculation, bank statements, etc), will it count against us that her bank statements show income coming directly from me as opposed to an 'outside / external' source? I obviously declare those payment as an expense on my tax return so it's not like we're getting the benefit of that money twice.

Apologies for the long message – wanted to give as much detail as possible – and thanks all in advance.

2bFrank

Very similar to my situation. I am a contractor, and I work through a limited company. Out of that company I pay my wife a small amount each month to make use of her tax.

Its a common thing, and when we applied for the mortgage, her income was counted as normal, not that it made much difference though. If you are not working though a limited company, as long as you both have 3 years of SA302 from the tax office then you will be fine.

amnblog

If your Partner is declaring the income on her tax returns that is the main issue.

kingstreet

Paying a "working wife" upto the NI LEL has been a feature of self-employment for years.

As amn says, as long as this is documented correctly there should be no problems.

hastingleigh

Thank you all for the advice, and the speedy advice at that!

Yes, all income, expenses, tax, etc, is declared and documented by both of us, so hopefully we'll have no problems on that score with the mortgage application.

I'd read about bank statements being reviewed on a line-by-line, item-by-item basis nowadays so was worried it would get flagged, but it seems not.