Hi Everyone,
I have heard Steve McKnight mention using share trading to accelerate your income to service on more property purchases.
Do the banks accept share trading profits as a form of income?
Do you need to setup a business/company with ABN/GST and show income/expenses like a regular business?
If you are self-employed you need 2 years tax returns to use the income for servicing. Is this the case for share trading?
How do you set it up properly so the banks will consider this as income?
Thanks,
Martin
You need to run the trading through a business for at least 12 months, 2 financial years to cover off on most lenders policies.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
If you set it up as a company do you pay yourself a dividend at the end of the year or do you pay yourself regular wages?
How you pay yourself doesn’t matter in the lenders eyes. The way we need to calculate income for lenders calculations is to add back any directors wages etc – dividends happen post tax returns (which is what is used to verify income).
It all comes down to the revenue and expenses tables on the tax returns.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Agreed with Corey.
As long as there is a ABN is setup, profits can be evident in the business account.
You would require 12 months minimum ABN and a tax return to support this income, the lenders can use this additional income with your current employment income.
Its a excellent way to boost your income and make some extra dosh on the side.
Hank Hong
Email MeGoogle Hank Hong he's pretty cool.
Speak to a specialist accountant that can get you the right structure. Depending on your strategy and broker there will be different requirements in terms of your structure and how it relates the the leverage made available to you. I trade two different strategies (one ASX and one US Stocks) and have a company/ trust structure that works well from a tax perspective and also meets the requirements of my brokers for the leverage that I need.
Good luck :-) – trading is a tough game!
Mike
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