Limited company owner

We work with lenders that can assess a personal mortgage on the profits of your limited company. Many lenders look only at the salary and dividends on your personal tax return. Others will use salary plus your percentage of profit after corporation tax. That second figure is what you could have drawn, and it is often higher when the advice has been to leave profit in the company.

The two readings are alternatives. Dividends are paid out of profit, so they are not added on top of it. If you own 60% of the company, the lender uses 60% of the post-tax profit, not the whole amount. We take that percentage from the accounts or the confirmation statement.

There is no increase in the rate or lender fee because you are using this method. Standard lender rates and fees apply. It is still an illustration until a lender has agreed the case: credit, deposit, the property and each lender’s criteria all apply.

The copy filed at Companies House is usually abbreviated, and does not show turnover, profit and corporation tax. Ask your accountant for the full accounts. Even when the mortgage is based on those company figures, many lenders still want the personal tax computation and the matching tax year overview. The full tax return form itself is not usually required. The FAQ’s page explains each document.

See the worked example of salary and dividends set against salary plus profit share.