Helping others get on the property ladder: Gifted Deposits20th February 2023 5:01 pm Comments Off on Helping others get on the property ladder: Gifted Deposits
Gifted deposits have become increasingly commonplace in recent years as young people are finding it incredibly difficult to get on the property ladder without financial assistance. If you are gifting a sum of money to a child or other family member, you will be asked to comply with a number of regulatory requirements.
Firstly, you will have to provide evidence of your identity to confirm that you are the person making the gift. Secondly, you will be asked to provide a clear paper trail for the gifted funds. Both the buyer’s mortgage lender and solicitor need to be able to see clear evidence of where the money has come from and that it comes from a legitimate source (i.e. is not the proceeds of a crime). This is to ensure compliance with anti-money laundering regulations and professional regulatory requirements imposed on conveyancers – it is a legal requirement and, therefore, not optional or discretionary.
You will most likely therefore be asked to confirm how you have accrued the funds that you are gifting. The most common sources of accrued wealth include savings, equity release/remortgage or sale of a property (in UK or abroad), redundancy, sale of shares or other assets and inheritance.
Finally, you will usually be asked to complete a “Giftor’s Declaration” to confirm that the sum you are gifting to the buyer is an unconditional gift, is not repayable in any way or at any time and you will not be acquiring any interest in the property as a result of the gift.
Most mortgage lenders are fairly relaxed about gifted deposits these days provided that the steps set out above have been complied with and the amount to be gifted (usually as a percentage of the purchase price) falls within that particular lender’s tolerances.
The residential property team at Colemans take these checks very seriously to keep our clients and mortgage lenders safe. We are open with you and the buyer about what will be required from the outset so that there are no unpleasant surprises down the line and to make the process as smooth and convenient as possible for you, you can complete all of these steps remotely via our app if you wish. To find out more or for any conveyancing enquiry, please do not hesitate to telephone our expert conveyancing team 01628 631051 or email: email@example.com
Categorised in: Residential Property
This post was written by Colemans Solicitors LLP