Reply to: Thinking of moving but problem

[ContrataxLtd]

Guys and gals. Thinking of moving house next year and I'm thinking of closing down the Ltd and extracting the funds to put towards the deposit. However, if I do this say a few months before the mortgage application I'll effectively be unemployed which wont help the application at all.

Options could be to go umbrella for a while but then there might be issues with providing enough pay slips
Start up a new ltd but then I wont have the 2-3 years accounts to show
Get a permi job ASAP so I have the pay slips to provide.

Other option I though was to estimate the amount of money that will come out of the Ltd and add that to the mortgage application with a no penalty clause to pay of a lump sum (assuming this is something the bank will allow). Then once the move has taken place shut down the Ltd and pay off the additional ask on the mortgage, then the mortgage will be at the level I originally wanted.

Does anyone else have any bright ideas??

Without going in to too much detail Badger I'd be tempted to take a Director's loan for the deposit, then, once the mortgage is arranged and you are in the house close down the LTD. Paper transaction to clear the DLA against the funds you are due upon liquidation.

PM me if you want more details on this and I'll follow up in the morning.

Martin
Contratax Ltd

[DimPrawn]

Another couple of options, i'm doing a variant of A (longer mortgage term with over payments) as there was little difference in costs unless I stop overpaying.

a) Take the bigger mortgage, max out the over payment's for each year if possible.
b) Choose an offset mortgage, where you withdraw from the company as you would in A but the savings is offset against the mortgage.

Wait for the 125% self-cert mortgage, and then get the bigger house and put more money into the company instead of taking any out.

It's 2007 all over again don't-cha-know.

[vetran]

Many providers won't accept loans as deposit or for income calcs plus the cost and risks of doing one so not generally a good idea.

It was for the deposit. They are asking now about that money?

The idea is to keep the company open and not go into higher rate on this year. A directors loan handled right would do it.

[d000hg]

Speak to one of the contractor mortgage specialists.

The application might be on previous company accounts so it doesn't matter that the company is being wound up.

Think that might be a little deceptive.....

More to the point, they WILL care if he puts his current employment status as "unemployed".

Why not get an offer in principle based on a given LTV and then fold the company up after doing all the paperwork?

[Scruff]

what's the problem with becoming a high rate taxpayer? Nothing at all, I long to be worse off....

How can you be worse off? As long as the marginal rate is less than 50% you are better off, as well as acquiring a(n) (appreciating) asset and a place to live which will eventually become yours. Monkey Maths.

[badger7579]

Another couple of options, i'm doing a variant of A (longer mortgage term with over payments) as there was little difference in costs unless I stop overpaying.

a) Take the bigger mortgage, max out the over payment's for each year if possible.
b) Choose an offset mortgage, where you withdraw from the company as you would in A but the savings is offset against the mortgage.

Cheers Blue, 2 potential options there...

[AtW]

what's the problem with becoming a high rate taxpayer? Nothing at all, I long to be worse off....

You'll pay more income tax to get a house which you can sell CGT-tax free later. Or you can kick the bucket and your wife will get it tax free

[BlueSharp]

Another couple of options, i'm doing a variant of A (longer mortgage term with over payments) as there was little difference in costs unless I stop overpaying.

a) Take the bigger mortgage, max out the over payment's for each year if possible.
b) Choose an offset mortgage, where you withdraw from the company as you would in A but the savings is offset against the mortgage.

[badger7579]

If you want to live in a (bigger) house, what's the problem with becoming a high rate taxpayer? Better this year than next...

what's the problem with becoming a high rate taxpayer? Nothing at all, I long to be worse off....

[Scruff]

If you want to live in a (bigger) house, what's the problem with becoming a high rate taxpayer? Better this year than next...

[badger7579]

What kind of entrepreneur you are if you are closing down the company???

Entrepreneurs sell companies or go bust trying.

Thanks for the insight there...

[AtW]

Because it will push me into the upper tax bracket. At least if I close down I can apply for entrepreneurs relief.

What kind of entrepreneur you are if you are closing down the company???

Entrepreneurs sell companies or go bust trying.

[badger7579]

Why not pay a dividend?

Because it will push me into the upper tax bracket. At least if I close down I can apply for entrepreneurs relief.

[BrilloPad]

Why not pay a dividend?

[northernladuk]

Directors loan?

Many providers won't accept loans as deposit or for income calcs plus the cost and risks of doing one so not generally a good idea.