Does this meet 2 years business income requirement ?

I and my wife have a Family Trust that will complete two years of trading by end of June 2019. The First year of trading, i was an IT contractor for about 5 months and earned all my income for those 5 months into the trust. Hypothetically, at the end of 2018 Financial year, i earned 50k from the contract job into the Trust and 100k as a PAYG employee for the remaining 7 months of the same financial year. The 50k from the Trust was discretionally distributed and taxes were paid.

In 2019 Financial year, i have worked the full year as a PAYG employee, i however have done some side hustle work that has earned about 30k via the Trust. This will be distributed to the beneficiaries ( me and wify) and taxes will be paid for the 2019 year.

Now, to the real question: We want the income from the business to be considered while working out serviceability as we intend to apply for an investment property Loan. Will lenders consider this as meeting 2 years business income requirement while trying to work serviceability or not in these circumstances ? I am worried that income from the First year may not really be considered business income ?

 

sounds like it is PSI income and shoudn't be distributed. Did you receive advice on this aspect?

If the trust has 2 years tax returns its income should be considered with most lenders.

 

Firstly, the 2 year rule you are referring to is most likely the requirement lenders have re the ABN - the ABN must be registered for at least 2 years.

In terms of the tax returns - most lenders require 2 years financials but at 80% lenders like St George, Westpac, etc accept one years financials and over 80% ANZ accepts one years financials. If you are using one of these lenders then you don't need to show the previous years returns.