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Category: Regulation and legal

Mortgage Broker Q&A; what’s an SA302 or Tax Year Overview, how do I get them, and what are they for?  

If you’re reading this article, a mortgage broker or lender has likely requested several years of SA302s and Tax Year Overviews from you as part of the documents required for an application. 

An SA302 may be called a tax calculation or computation. It’s an abbreviated form of the complete tax return, showing the profits broken down into elements, like income from salary in paid employment or from UK land and property. 

It clearly illustrates total profit by type and the tax owing after allowances; without including laborious details that went into the calculations of profits. 

The tax year overview, on the other hand, is an accounting of balances owed. It shows your tax position as liabilities owed to HRMC, upcoming payments and penalties for late or overdue payments and how much of any bill is still due. 

So you must provide both sets of documents where requested, as one evidences your income, the other your tax owing and payment history. 

The process to get an SA302 depends on how you submit self-assessment returns. 

How to get an SA302 and Tax Year Overview if you use an accountant or file postal self-assessment returns

If you use an accountant or file by post, you may not have access to HMRC online, which is usually the quickest way to get these documents. If you have never accessed your self-assessment returns via HMRC online, you should call HMRC in the first instance. 

The telephone system provided by HRMC recognises the term SA302 and will generate and post these to you automatically with tax year overviews. 

But the postal SA302s and tax year overviews can take up to two weeks to arrive (excluding any strike actions or seasonal delays). 

So you should also contact your accountant and see if they can provide them faster. Most accountants’ software can generate something equivalent to SA302s, acceptable to most lenders, and accountants should be able to download tax year overviews from HRMC directly. 

How to get an SA302 and tax year overviews if you submit self-assessment returns online 

You can view and print up to 4 years of tax calculations using the steps below.

To download the SA302s

  1. Log in to your online account at *
  2. You arrive at a splash page with several options below your name and tax reference number. Select ‘self assessment’.
  3. Select the link titled ‘view your payments’
  4. Follow the sidebar link titled ‘tax return options’ (at the bottom of the page for mobile users).
  5. Choose the year from the drop-down menu and click ‘Go’.
  6. Select the button titled ‘view return’.
  7. Follow the link ‘view calculation’ from the sidebar navigation menu (at the bottom of the page for mobile users).
  8. Follow the link ‘view and print your calculation’ at the bottom of the page.
  9. Select the button titled ‘Print your full calculation’ at the bottom of the page.
  10. Change the printer setting to “save as PDF”. 
  11. Save the file somewhere on your machine. 
  12. Use the back button on your browser to return to the tax return options page, and repeat the process to download three full years (or as many as you have, if less). 

To download the tax year overviews

  1. Log in to your online account at *
  2. You arrive at a splash page with several options below your name and tax reference number. Select ‘self assessment’.
  3. Select the link titled ‘view your payments’.
  4. Select ‘tax years’ from the sidebar-navigation menu (at the bottom of the page for mobile users).
  5. Choose the year from the drop-down menu and click ‘Go’.
  6. Follow the link ‘print your Tax Year Overview’.
  7. Change the printer setting to “save as PDF”. 
  8. Save the file somewhere on your machine. 
  9. select cancel from the print menu, and repeat the process for the remaining tax year overviews. 

* We cannot be held responsible for the content of this external website.

Q&A; Do I need a buy-to-let mortgage to take a lodger or sublet?

Question; I want to buy a property and let a room or several rooms out; is this a buy-to-let?

There are two aspects to this question; legally, any property where you, or your direct family members, occupy more than 40% of the habitable space is considered a regulated residential mortgage.

So, a buy-to-let mortgage usually precludes you or a family member from occupying the home. Except for a limited number of “regulated buy-to-let” products, which only have niche uses.

These buy-to-let products are rarely preferable as most residential lenders allow you to take a lodger or two, subject to certain limitations, and are generally less expensive.

It is vital to check with your lender if they allow lodgers, as some won’t. But most require that lodgers occupy the home as a friend and don’t have a self-contained unit like a granny annexe, although a small lock on a bedroom door is unlikely to be a big problem.

Lenders often request that no formal tenancy agreement is in place and that the lodger signs a “consent to mortgage form”. These are important to limit the lodger gaining complex legal rights to remain in the property, even in a non-payment dispute.

Where this gets confusing; is reading your mortgage offer conditions which usually state that subletting is prohibited!

This likely refers to precisely that point; making a formal tenancy agreement with a lodger can grant them rights that are prejudicial to you as the homeowner: and the mortgage lender if they ever had to repossess.

If you want to let a self-contained unit like a granny annexe, particularly with a formal tenancy; then it is hard to do this whilst remaining on the right side of the law with your mortgage lender; as most buy-to-let deals won’t allow you to occupy any part of the home, and most residential lenders won’t let you sublet any part.

If you want to purchase or part-occupy a multi-unit block (a block with several self-contained flats) then this is possible, but there are very few lenders entertaining these transactions; you will benefit from using a mortgage adviser as most of those lenders will only offer products through qualified brokers.

These are the legal aspects relating to the mortgage conditions; the second part of the question relates to health & safety, local planning bylaws, protections for tenants and insurance.

At any point where you take a lodger, it will be your responsibility to ensure that you comply with any bylaws regarding letting in your locality, which may include local licensing schemes.

You might need to get regular gas safety inspections or take alternate home insurance.

Where multiple lodgers reside with you: this may fall under requirements for houses of multiple occupation or “HMO” licensing, which can involve requirements around fire protection and electrical installations, among others.

It is vital to take all these aspects seriously. Failure to comply with HMO licensing can incur fines in the tens of thousands of pounds, and the rules are well enforced. Breaching your mortgage conditions could result in the repossession of a property.

And finally, for those in a leasehold property, you need to ensure the terms of your lease do not prohibit you from taking a lodger or sub-letting. Breaching your lease agreements can again end in repossession.

If you need help with any of these types of transactions, contact us for more information.

COVID update; can you remortgage or product transfer, during lockdown?

Covid-19 has had a massive impact on the mortgage marketplace, with some lenders withdrawing altogether and thousands of products withdrawn from sale. The outlook is not as gloomy as you may imagine if you need to remortgage.

If your current deal is about to end, ends later this year, or if you want to

 remortgage to consolidate commitments and reorganise your finances, what options are there, and what should you do?

If your mortgage deal is ending soon

Firstly, if your current deal ends imminently, whilst there has been a reduction in the number of lenders and products, many of those withdrawn are for house purchases or higher-risk lending.

Most lenders continue to offer product-transfer deals for existing customers; many still offer remortgage deals for new customers, and we can arrange these for you without any advice fees. So we can typically advise you on options from the whole of the market and your current lender simultaneously.

If your income has fallen, this might affect your ability to change lenders but would not prevent you from transferring deals with your existing lender.

If your mortgage deal is ending within the next 6-months

For anyone whose existing deal ends by late Autumn, now is an ideal time to think about remortgaging.

Several lenders’ remortgage deals are valid for six months, so you can apply well in advance, taking advantage of the low current rates and arranging everything ready to switch over as soon as the current mortgage deal expires.

There are several reasons why doing this now could be wise. Firstly, although lenders have not passed on the full rate reduction made by the Bank of England into new fixed-rate mortgage deals, there is a good chance that this never happens.

With vast financial losses in every industry, it is difficult to imagine lenders vying to cut into vital profit margins when rates are already at all-time lows.

Conversely, we could see a reduction in house prices or even lenders pulling out of the market entirely, creating a situation where you were better off applying today than in several months.

No one has a crystal ball to predict how the market will progress over the year, but the likelihood of rates getting significantly better than today seems dim.

Consolidating credit commitments into your mortgage

This is where the remortgage market has already shrunk significantly. So, if you want to trim down your outgoings and reduce your typical monthly commitments, it may be wise to act now rather than wait. 

Be aware, though, that consolidating credit commitments into a mortgage often presents poor value for money. And may be more expensive than alternative options, like balance-transfer deals or converting credit card debts into a personal loan.

It is also important to note that you often convert unsecured credit commitments into one secured against your home. That means you stand to lose your most precious asset if you default, where previously, there may have been no risk of this at all.

We can help you understand whether a debt-consolidation remortgage is the correct solution for you. 

Changing your mortgage term

You do not necessarily have to wait to remortgage to alter your mortgage term and, therefore, your monthly payments (for anyone on a repayment loan).

If this is something you want to look at, you can speak to your lender, and you may be able to do this midway through an existing deal, even if you have early repayment penalties.

Again, you can possibly change the term when you remortgage or product transfer, and if you want to reduce your outgoings in this way, get in touch to discuss your options.

If you are in financial difficulty

If you are experiencing difficulty making payments, your first port of call should be your existing lender to discuss options to prevent you from getting into arrears, including the government’s payment holiday scheme.

If there is a risk of you defaulting on obligations like a credit card, loan, hire purchase or other non-secured credit commitments, then consolidating these into your mortgage is a potential solution. 

But this increases the risk of losing your home by converting unsecured commitments into secured debt.

We can help you get an understanding of whether consolidating commitments is a solution that could be viable for you. 

But you should consider speaking to & the Citizens Advice Bureau about the implications of getting into arrears on either type of commitment and other options that may be available, such as an IVA.

COVID update; managing your mortgage, payment holidays, and Bank of England Base rate changes

The coronavirus has caught governments, businesses and consumers off guard, so the situation is continuously changing, but there is good news for most people.

Firstly, for those who want to remortgage during the current lockdown, to consolidate commitments, or whose current deal is due to end soon, mortgage lenders are still lending, and our advice service goes on as normal. We can work with you entirely over the phone and online.

We will follow this article shortly with a discussion of the Bank of England Base Rate reduction and how this affects borrowers looking at a new mortgage. But for those with existing mortgage offers, there is further information below.

Due to the lockdown, most lenders have ceased physical valuations temporarily, so lending will likely rely on an electronic valuation (i.e. an estimate based on previous sale prices and local market trends, like estimates on sites like Zoopla).

That may mean you have difficulty if you have spent significant sums renovating a property and want to consolidate commitments into your mortgage.

Reports of lenders closing funding are based on a handful of small specialist lenders (new to the marketplace anyway) ceasing to offer new lending. Some larger lenders have limited their purchase lending loan-to-value limits, but purchasing currently seems unlikely.

Managing mortgage payments and difficulties in paying your mortgage

The most important thing for you as a consumer is that if you believe you will have difficulty paying your mortgage, you should contact your lender as soon as possible. Discuss with them the options they have for helping you manage payments.

On residential loans, i.e. properties occupied mainly by you or your family, the lender is legally obliged to try and prevent you from going into arrears.

That means they must consider offering solutions such as a temporary switch to interest only, if suitable, or consider alternatives like increasing the term or taking a payment holiday.

You should engage with them early as going into arrears will incur costs that may be non-refundable, avoidable, and any arrears recorded on credit reports are unlikely to be removed in future. 

Arrears will also worsen future costs and the options available when you remortgage.

Bear in mind that any proposed solution will likely cost you more in the long term. So, it’s not a gift or freebie, and it may not make sense if you have plenty of savings to carry a short-term drop in income.

The situation is less clear for those with buy-to-let mortgages, especially as many will be interest only, and therefore, payment holidays are the only temporary solution available. It is unclear if the government’s statement about payment holidays will apply to commercial lending.

You should still contact your lender early to discuss what assistance they may offer if you are facing difficulties or non-paying tenants. 

Lenders are unlikely to want to take punitive action against otherwise good borrowers for a problem that will affect them across their whole lending book, so they are likely to be magnanimous.

Registers of Scotland Shutdown

We have become aware of clients whose sales are pending soon and are experiencing difficulty due to the government closing the Registers of Scotland (the Scottish Land Registry).

Discussions between The Law Society and the Scottish Government are ongoing, and it seems likely that a solution is imminent. Until this point, Scottish sales will not be able to complete.

Bank of England Base Rate Changes

If you are considering a new mortgage, I will write shortly to expand on how the changes to the Bank of England Base Rate affect choices on new mortgage products.

For those people who are about to complete their mortgage soon, they present a dilemma.

Fixed-rate mortgages are unlinked to the BOE base rate, so the reduction in this has not yet passed through to most fixed-rate mortgages, although one or two drops have popped up.

As lenders will be extremely hard hit by the lockdown, they might seek to increase their margin on lending, so these rate reductions might never be passed onto fixed rates fully.

That means most borrowers can either wait to see fixed rates come down (when they could even go up) or switch to some form of variable product, such as tracker rates, which have reduced as they follow the BOE rate.

However, no one currently offers tracker or variable-rate mortgages with any cap or upper limit that I know of, and given that this is a time of unprecedented global turmoil, wild changes to interest rates are not outside of the realms of realistic possibility.

The pitfalls of unmarried couples buying a property in a sole name

In this series, we’re exploring the hidden value of mortgage advice.

Often, when people think about the benefits of a mortgage advisor, the cliched norms of being whole of the market, having insider knowledge and getting the best deals are what spring to mind.

We like to think about getting a little off the rate, some lower arrangement fees or being guided on the pitfalls of certain products. But what about the transaction itself as a whole?

The real value of advice could be much more significant, like hundreds of thousands of pounds more.

We can all be a bit rate-obsessed and inclined to focus on the most apparent numbers, but the biggest risks to consumers are often those least apparent.

Most customers might only have one transaction in a lifetime where their choices may have such extreme consequences, but would you know enough to see those pitfalls when they exist?

Recently, I spoke to clients intending to buy a property in a sole name, as unmarried partners. And the potential impacts of that decision troubled me.

Like many customers, as his spouse had recently ceased employment, he thought it best to apply in sole name. Whether for simplicity’s sake or because he assumed it had to be a sole application.

Many people think that without an income, you cannot be an applicant; in truth, it would limit the maximum loan a little, but for most people, it is unlikely to jeopardise their application. 

Anyway, that’s what a mortgage advisor is for, to advise, even if that means discussing two scenarios. 

But this decision could have far-reaching consequences outside of mortgage lending, so I would immediately advise them to get tax, inheritance planning, and legal advice about other ramifications.

So what difference would it have made applying in sole names, and could it go monumentally wrong?

Now, we are not tax specialists, but my understanding of the tax position on this application would be as follows:

If you are neither married nor civil partners, you don’t benefit from joint inheritance tax thresholds totalling £650k, and you also lose the joint-main residence allowance totalling £1 million. 

You can’t have joint ownership without a joint mortgage, and there is no such thing as a “common law” marriage outside of divorce settlements.

It’s fair to assume that tax allowances and property values will increase over time. But based on the purchase price of £600k and today’s tax allowances, we get an analogue of how future costs might stack up.

Whether or not they have a valid will, they may only use the applicant’s IHT allowance to pass the property onto children. As his partner never went onto the ownership of the property, her £325k allowance would effectively go unused if she died first.

In todays money, that would mean £110k of inheritance tax being liable by their children on death. However, if the applicant died first, leaving the whole property to his partner in his will, they could use both their allowances in series, but the two don’t combine in the way a married couple’s would; this could lead to paying even more inheritance tax.

So, a £110k payment would still be required, and that could force his partner to raise a lifetime mortgage or similar finance to pay the bill. 

When she left the property to her children, the whole asset would be chargeable again, potentially leading to over £200k in inheritance tax plus any costs for financing the initial tax burden.

If they had arranged a suitable will, they could have avoided some of the tax by leaving half of the property value to the children and half to the partner, but ultimately still liable for the £110k.

That could also have its pitfalls to if the applicant died whilst the children were still minors (as raising any loan to pay the tax burden with a property co-owned by children is unlikely, if even possible).

If they had entered a joint mortgage, they could have split ownership 50/50 and used both of their £325k allowances to pass the property onto children with no IHT at all in today’s money.

Similarly, a civil partnership for tax purposes would allow larger benefits. That is relevant as it’s likely that this type of affluent customer ends up with further savings that may also pass to children, and could bear even more tax.

If they had arranged the mortgage in a sole name and had not made a valid will (its estimated that roughly 60% of people die without one), the consequences could be more dire.

If the applicant died first without a valid will, the ‘laws of intestacy’ would leave the property entirely to the children.

I am sure you can imagine that as the children would own the property (and if still minors, it would need to go into a legal trust to be held for them until they were 18), this scenario with a looming tax bill of £110k and a property you don’t technically own, would be about as much fun as DIY dentistry and something no one sane would even consider leaving as a possible pitfall.

There could be some benefits to keeping ownership in a sole name if the customers were likely to invest in other properties later, but this wasn’t the case at the time; either way, they would benefit from having been advised by a tax specialist so they could understand the options, and by a legal advisor so they would know the implications too.

One of those would also be that the partner was effectively gifting her deposit to the applicant and would likely need to sign various affidavits relinquishing her right to those funds, and residing in the property, potentially problematic in an acrimonious separation.

That all shows that arranging a mortgage can have wide-reaching technical consequences and huge financial impact, so if you’re working with a good adviser, you are much more likely to avoid catastrophe than if self-advising.

Whilst we aren’t tax or legal specialists, at least having someone with a moderate knowledge of the area is likely to catch situations that have huge risks attached and guide you to take further advice on those decisions that might be questionable.


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