Self assessment increase for mortgage

willhopkins · 6 July 2017 at 10:12PM

Hi

Last year I sold 50% shares of my small limited company for £11000.

The shares were transferred back to me after 6 months for nil monies.

I would like to include this amount on my SA302 tax return as myself and my wife are applying for a mortgage and this will help with my income as I am self employed.

Should the above figure be included or can it be included in my SA302.

Thanks

William

CKhalvashi · 6 July 2017 at 10:32PM

I don't believe a capital gain can be used as income for a mortgage, maybe someone else will correct me though.

I'd expect HMRC to look very carefully at how the transaction was structured assuming a third party was involved, as it looks from the naked eye like it could have been structured like this to offset a capital gain elsewhere within the tax free limits.

It could also have been structured in such a way as to pay a dividend to someone in another tax band/double up the allowance artificially, which again AFAIK HMRC are hot on at the moment.

Wayne_O_Mac · 6 July 2017 at 11:07PM

willhopkins wrote: »

Hi

Last year I sold 50% shares of my small limited company for £11000.

The shares were transferred back to me after 6 months for nil monies.

I would like to include this amount on my SA302 tax return as myself and my wife are applying for a mortgage and this will help with my income as I am self employed.

Should the above figure be included or can it be included in my SA302.

Thanks

William

The SA302 is just your self assessment tax calculation for the year, so if you've included the gain on your return then it'll show up. Your mortgage provider may well choose to disregard it though.

I would say that something looks fishy as hell here, and mortgage companies generally aren't stupid.

chrismac1 · 7 July 2017 at 8:17AM

No credible mortgage lender will include this. The whole point of a mortgage is that it lasts usually 20 to 25 years. The lender is interested in your future cash flows over that period. Shares you sold last year have zero relevance to this.

You'd be advised not to mention this transaction. One moment you are selling shares for £11k, the next you are getting them back for zero. That's exactly the sort of stuff which does not pass the smell test which has underwriters running for cover.

Self assessment increase for mortgage

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