First time buyer

Kyle89

Good afternoon,

It is a long winded question but I will try to keep it as simple as possible.

Cut a long story short my partner and I would love to buy a house together, but our finances are slightly complicated - both in stable, long term employment + directors of a (newly formed) LTD company.

Combined income from full time employment: approx: £45k
LTD company on track to generate approx : £40 - 45k ( maybe more )

Here comes the question:

What can we do to use the £40k (LTD company) income to our advantage i.e "inflate" our income to boost the affordability?

Is it wise/beneficial to sacrifice the tax savings on dividends and pay ourselves via PAYE so that we can provide evidence in form of payslips?

Thank you in advance for any suggestions


Kyle

kingstreet

Kyle89 wrote: »

directors of a (newly formed) LTD company

Nothing you can do until you have at least a one-year trading record.

Until then, the income won't be taken into account.

Kyle89

kingstreet,

I am afraid this is exactly what I didn't want to hear.
I am guessing there is no way around it then? Such as employing myself by the company and declaring myself as employee rather than a director ( so that it could basically be seen as a second job)?

Of course as long as this doesn't get into a fraud territory of any kind.

kingstreet

Kyle89 wrote: »

Of course as long as this doesn't get into a fraud territory of any kind.

Which it would.

You would be attempting deception to circumvent lender rules on self-employed income.

ACG

There are 2 lenders I know of who would allow you to apply at 10 months trading with a view to completing once you can evidence 12 months (and accounts) - rates would start at 4.5% with a 15% deposit. But aside from that, no as kingstreet says one years trading. If you declare yourself as an employee you would also need to declare you are a shareholder and it would all unravel.

The next question to that sentence is "What if I put the business in my brother/cousins/parents/kids name?" it would still get found out potentially, it would definitely be fraud and there would be tax liabilities.

Kyle89

Thank you very much for the replies.
I guess it just confirmed what my initial thoughts were.


All the best

amnblog

Don’t forget Kyle, that once your Limited Company have a provable track record, most Lenders are only interested in Paye and Dividends (money you take out), not profit.

No Lender is going to factor in your turnover.

(I say this as many potential borrowers quote turnover as income)

Kyle89

amnblog,

Thank you for your message.

I should have made it clearer and indicate that I was indeed referring to the money I intend to take out as my/partners salary and dividends.