Husband/wife ltd company - salary

abertawe

Hi,
I have a client - husband & wife ltd company - and wondered if anyone could confirm that they can received minimum salary and the bulk in dividends. Also, does anyone know if mortgage companies will include dividends when calculating the amount of mortgage they are able to have?

Many thanks

Monsoon

It all depends on their personal circumstances but, broadly speaking, yes, both can take a basic salary and top up with dividends. Be aware that the government propose some form of income shifting legislation in the future.

Banks are mostly coming round to the fact that small private Ltd Co's remunerate their directors/owners with a salary/dividend mix, but some need it explaining to them in very very simple language!

claudialowe

You need to go to the right sort of bank - which are probably the very same ones that are in the do-do now :confused1::confused1::confused1:

Claudia

John

I used to earn basic plus dividends and no lender would consider them for a mortgage as they weren't guaranteed. The only way may be if the Ltd Co gives an unconditional guarantee to a minimum amount, but I'm not sure that even this would help.

Monsoon

I think you'd probably need to back the remuneration package with confirmation of company ownership and company accounts showing profit (much like a sole trader has to demonstrate prior years' income) and also profit distribution.

Banks are coming round to the idea but it's not as straight forward as sole trader/ partnership profits.

John

It used to be easy as self cert mortgages were available, but even getting a standard mortgage is not easy now as banks are so wary - and self certs dont exist now.

Monsoon

John wrote: »

and self certs dont exist now.

Not at all? Wow.
I'm not surprised. TBH I haven't kept up to date with what is/isn't available.

I'm sure there must be some self certs still available - I happen to know a client remortgaged recently and didn't ask me for accounts. :confused1:

claudialowe

He must be the only person that actually remembers the really safe place that he put them

Claudia

Monsoon

claudialowe wrote: »

He must be the only person that actually remembers the really safe place that he put them

Claudia

LOL... I wish... nope, he just plain wasn't asked for them, I am 99% sure!!

claudialowe

I suppose that if it is a re-mortgage with the same provider, a reasonable amount of equity (say 30%+) and no defaults, then the lender might not want to see accounts.

When our fixed term self-cert mortgage came to an end last October with RBS :ohmy: we just agreed on a new rate and job done - but perhaps they had other things on their mind at the time - like how to pay for Sir Fred's pension

Claudia

Hasan.Ahmet

Husband/wife ltd company - salaryHusband & Wife

Two issues here;
1) I have a client - husband & wife ltd company
You have to be aware of the Settlement legislation AKA Arctic Case if appropriate.
Anyone knows what the final outcome was after the HMRC appeal.
2) Will the lending institute take into account the dividend income when considering a mortgage application?
Common sense dictates that would depend on the institute's lending policy (More truly though on the availability of credit)

claudialowe

HMRC lost the Arctic Systems case, and the government has said that it will introduce legislation regarding income shifting, but it keeps getting put back.

Claudia