Husband/wife ltd company - salary

abertawe
abertawe Registered Posts: 1 New contributor ๐Ÿธ
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

Comments

  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    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
    claudialowe Registered Posts: 275 Dedicated contributor ๐Ÿฆ‰
    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
    John Registered Posts: 52 Regular contributor โญ
    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
    Monsoon Registered Posts: 4,071 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    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
    John Registered Posts: 52 Regular contributor โญ
    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
    Monsoon Registered Posts: 4,071 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    John wrote: ยป
    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
    claudialowe Registered Posts: 275 Dedicated contributor ๐Ÿฆ‰
    He must be the only person that actually remembers the really safe place that he put them :lol:

    Claudia
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    He must be the only person that actually remembers the really safe place that he put them :lol:

    Claudia
    LOL... :lol::lol: I wish... nope, he just plain wasn't asked for them, I am 99% sure!!
  • claudialowe
    claudialowe Registered Posts: 275 Dedicated contributor ๐Ÿฆ‰
    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 :lol:

    Claudia
  • Hasan.Ahmet
    Hasan.Ahmet Registered Posts: 87 Regular contributor โญ
    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
    claudialowe Registered Posts: 275 Dedicated contributor ๐Ÿฆ‰
    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
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