Residential Mortgage for UK Expat Business Owner Earning Self Employed US Income

Residential Mortgage for UK Expat Business Owner Earning Self Employed US Income

Area
Surrey
Capital Raised
£889k

Our client owned a successful UK business and had moved to the US three years ago to set up a similar company in the States and tap into the American market.

Having established their US company to a point of self-sufficiency, they were now returning to the UK and looking to purchase a family home in Surrey.

They were converting their US property into a buy to let purchasing the UK residential home as a second property.

The Scenario

Due to their complicated income structure and overseas earnings, they were experiencing a few difficulties with their mortgage application:

  • Although they owned a UK and US company, they were only taking income from the American business, in the form of dividends, and nothing from the UK business.
  • This meant that their income was classed solely as foreign, self employed earnings, which can be difficult to get finance for.
  • They also weren’t able to leverage their UK company earnings as they weren’t taking a salary or dividends from the British business.
  • But, they needed proof of a higher income to reach the loan value they wanted – an £889k loan on a £1.185m property, coming to roughly a 75% loan to value (LTV).
  • They also had no UK tax filings for the last 2-3 years due to the way they were drawing income.

The Solution

We sourced a lender who could look at the potential of both of their businesses:

  • We used the clients’ US self employed income (paid in dividends)
  • And also leveraged their UK company’s net profits, even though they hadn’t actually withdrawn any income from the company in recent years

Although this reduced the number of mortgage lenders willing to take on our clients’ case (it increased their loan size potential and they wanted to keep their interest rates at a minimum by putting down a higher deposit), we managed to find them a standard mortgage with great terms.

And we didn’t need to use a private bank and pay higher fees to keep the rates low on this complex case.

We secured:

A 5 year fixed rate mortgage with a low interest rate of 1.14% - a great deal for a returning UK expat with self employed income in a foreign currency.

The US Self Employed Income Hurdle

Tax filing requirements are different in the US and UK, so you don’t have a standardised comparison for mortgage lenders to use in their calculations - and this can cause an issue.

If you’re working in the US, you’ll know the tax year is in line with the calendar year, while ours runs from April to April.

For a mortgage application, you’ll also need to supply different tax documents for each proof of income - US or UK.

Our clients in question had already changed the trading period for their UK company so that it lined up with the US tax year - you can do this via Companies House.

But, this meant that their first tax year from the change only ran for 9 months, (from April to December), and their next tax year hadn’t completed yet, and wouldn’t until December 2021.

How did we get around this?

We liaised with our client's accountant and the mortgage lender to consolidate a year’s worth of financial reporting for the UK company based on previous accounts. It was accepted, and the loan approved.

Sam Baker

Finance Broker

Cardiff

0117 959 5094

Are you looking for a similar type of property finance?

As a specialist bridging adviser at Clifton Private Finance, I can take a holistic view of your situation and find the right finance solution for you.

 

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Fergus Allen

Finance Broker

Cardiff

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

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Jacob Phipps

Finance Broker

Bristol

(+44) 0117 959 5094

Are you looking for a similar type of property finance? I specialize in helping international clients source residential and investment property finance for UK property. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

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Jack Spillane

Finance Broker

Bristol

0117 959 5094

Is your situation similar to this? I specialise in helping clients who need creative development finance solutions, and second-charge mortgages. Give me a call any time and we can set up a detailed discussion of the finance you need. customDatabaseField-8455

Mathew Phillips

Senior Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

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Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need. customDatabaseField-8455

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

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Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

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Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

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Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements. customDatabaseField-8455

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