Case Study

Getting onto the Property Ladder

Helping a director in his 20s, structure his income from the limited company, so he can purchase his first property.

About the client

The client is a joint director of an Osteopathic practice, based in Blackheath, South East London, The practice was founded by Alex Alcantara and Josh Masson in 2016 and is a two director practice with 1 newly qualified Osteopath.

Key Challenges

For years, the director was solely focused on growing his business. He had paid himself the minimum salary possible to keep cash within the business.This had to change when he got married and was looking to secure a home for him and his new wife. He needed to extract the maximum income from the limited company in the most tax-efficient manner. But he faced the following questions:

  • Should the money be drawn out straight from the business bank account?
  • Does it need to go through payroll?
  • Should a dividend be declared?

Solution Implemented

The experts at Pennyhills went about solving this problem by working with the director’s mortgage broker to understand how much income was required. To strike a balance between maximising the total amount of income and the amount of income tax the director would have to pay, we could utilise the director’s personal allowance in the relevant tax year in the form of a salary through the PAYE system. The balance was declared and paid as dividend income within the tax year.

Final Outcome

We were successfully able to help the director and his broker secure a mortgage in principle with the lender.

Working with Pennyhills has been an incredible experience. Sach provides incredible customer service. He has helped us to move our business to a higher level. I highly recommend you to work with Pennyhills.

Photo of
Alex Alcantara
Director of Blackheath Osteopathy & Accupunture