Ltd company & house deposit

Glw28

Hi this may be a bit complicated but I hope someone can help

I have found a new home which I have fallen in love with so am keen to reserve quickly and start the process

I am currently employed on a permanent contract but prior to this I was working under my own ltd company. Within the ltd company bank account I still have a few thousand as my accountant hasn't done the tax return yet. The money is set aside to pay my tax but that won't be due until January 2018 so my plan was to take the money out of that account and use it for my deposit

Will I be able to do this without the mortgage company having to go through all my business accounts etc, will they just see it's my company and I've saved that money so can do as I please with it?

This will be added to money I have already saved

Thrugelmir

The money belongs to the Company's not you. Before lending the money to yourself consult your accountant for advice.

dunstonh

Within the ltd company bank account I still have a few thousand as my accountant hasn't done the tax return yet. The money is set aside to pay my tax but that won't be due until January 2018 so my plan was to take the money out of that account and use it for my deposit

If you take the money out of the business it will either be as a one off income (dividend or salary) and subject to taxation or as a loan that needs to be repaid (and would be hit for tax).

Will I be able to do this without the mortgage company having to go through all my business accounts etc, will they just see it's my company and I've saved that money so can do as I please with it?

This is not your money. Until it is out of the company and in your hands it belongs to the company. You cant just take money from the business without the business having to treat as either income, dividends or a loan.

TheTracker

In other words, you can make a Director's Loan, and consult your accountant on the appropriate level of interest payment, if any, for the loan period. It will show on your personal accounts and the mortgage company may ask where it has come from. If so, show them the loan agreement. and explain how you will repay the loan. You shouldn't need to show any business accounts.

amnblog

Mortgage lenders are cagey about deposit funds coming from Limited Company accounts and some will reject it out of hand.

If you are not now relying on the business for income and your Accountant can confirm withdrawal of funds will not affect the business that puts you on a good footing.

Your post however, suggests you are 'borrowing' funds you will later need for Corporation tax. Lenders will not like that.

You need an experienced mortgage broker.

trailingspouse

It's not your money. It's not even your company's money - it belongs to HMRC, they just don't need you to pay it right now.

Don't touch it. If you can't afford the deposit now, how will you afford the Corporation Tax later? You can wait a bit longer for a house, but HMRC are not known for their patience when waiting for their Corporation Tax.

silvercar

Will I be able to do this without the mortgage company having to go through all my business accounts etc, will they just see it's my company and I've saved that money so can do as I please with it?

Having done similar, your solicitor will need to be shown the documents to demonstrate that you own 100% of the company. After that the solicitor shouldn't be bothered whether this is money that you have already declared as a dividend but haven't yet withdrawn from the company or whether you intend to declare it in this financial year etc.

Your accountant will also need to know what you have done and how you are handling it. The basic rules are that dividend and salary need to be declared in the appropriate tax years. Loans either need to be repaid within 9 months of the company's year end or declared as a director's loan.

Don't touch it. If you can't afford the deposit now, how will you afford the Corporation Tax later? You can wait a bit longer for a house, but HMRC are not known for their patience when waiting for their Corporation Tax.

^^^^This 20 times over, last thing you need is for hmrc to make you bankrupt for non payment!