Most lenders accept a deposit gifted by close family. The person giving the money will need to provide photo ID, a signed gift declaration confirming it is not a loan, and bank statements showing where the money came from. Move the money well before exchange, as late transfers are a common cause of delay.
Who can give a deposit
Most lenders accept gifts from close family: parents, grandparents and siblings. Some accept gifts from other relatives or friends. Check with your lender or broker before the money moves.
What we need from them
- Photo ID and proof of address
- A signed gift declaration confirming the money is a gift, not a loan
- Bank statements showing the money in their account and where it came from
- Confirmation they will not live in the property, or, if they will, a signed occupier’s consent form
Why we ask
Money laundering regulations require us to check the source of every pound used to buy a property, including money that came from someone else. Your lender also needs to know the deposit will not be repaid, because a hidden loan affects what you can afford.
Have the money transferred to you, or straight to us, well before exchange. Last-minute transfers are one of the most common reasons for a delayed completion.
Tax
A gift may count towards the giver’s estate for inheritance tax if they die within seven years. Most gifts of this kind create no tax at the time, but the giver should take their own advice if the sum is large.
A gift, not a loan
If the money is to be repaid, or the giver expects a share of the property, it is not a gift. Tell us early. There are other ways to structure it, such as buying jointly or a declaration of trust, and we can explain the options.
Buying with help from family? Get an instant conveyancing quote or call us on 0161 660 1505.
This article is general information about the law in England and Wales at the date above. It is not legal advice on your situation. Please contact us before acting on it.
