Gifted Deposit Solicitor Checks
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Understanding Gifted Deposit Solicitor Checks
Gifted deposits are an increasingly commonplace and integral feature of the UK’s property buying landscape.
Contributions to deposits – usually made by family members – are now essential in helping many thousands of people every year onto the housing ladder or into their next homes.
Gifted deposit legal checks ensure that all and any financial contributions made in these scenarios are properly and lawfully accounted for.
Conveyancing solicitors provide all services associated with gifted deposit legal checks as required by UK law.
What Is a Gifted Deposit?
A ‘gifted deposit’ offered in support of a property purchase needs to be sincerely given as a gift, and not as a loan to be repaid later.
For their part, mortgage lenders need to know whether a sum of money is being gifted to a homebuyer or being loaned to them.
To establish the facts, a conveyancing solicitor will need to verify:
- the gift giver’s identity
- the source of the funds they’re providing
- whether or not those funds are in fact being given as a gift
Why Gifted Deposit Solicitor Checks Are Required
Gifted deposit solicitor checks provide legal protections for mortgage lenders and all other parties involved in any given property ownership transaction.
Checks also help ensure mortgage lenders and conveyancers can:
- Comply with anti-money laundering (AML) laws
- Determine precisely what financial risks a mortgage customer is taking on
- Establish that a gift giver has no legal claims to ownership of the property being bought and sold
What Checks Does the Gift-Giver Need to Complete?
Gifted deposit solicitor checks will typically focus on the following:
- ID verification – meaning passports, driving licenses, and proof of address associated with the donor
- AML checks – involving verification of the gift being donated, plus bank statements, evidence of savings or inheritance amounts, and a tracing of money to lawful sources
- Gifted deposit declarations – Formal written declarations are needed to confirm funds being provided are a gift and not a loan, with donors forgoing any claim to ownership of the property being bought
What Fees Are Involved?
Conveyancing solicitors will typically only charge a small fee to carry out gifted deposit solicitor checks on behalf of their clients.
Checks should be initiated early in your property transaction, where possible, if you know in advance that such checks will be necessary.
Any delays could set back your exchange of contracts and mean that your deal takes longer than was necessary to conclude.
Commonly Asked Questions about Gifted Deposits:
Mortgage lenders require gifted deposit checks to comply with anti-money laundering (AML) regulations and to assess the buyer’s true financial position. These checks confirm the source of the funds, verify the donor’s identity, and ensure the deposit is not a hidden loan that could affect the buyer’s ability to repay their mortgage.
The gift giver will typically need to provide proof of identity, proof of address, bank statements showing the source of the funds, and a signed gifted deposit declaration. This declaration confirms the money is a gift, not a loan, and that the donor has no claim over the property.
Gifted deposits can cause delays if solicitor checks are not started early. Missing documents or incomplete AML checks can hold up exchange of contracts. Instructing a conveyancing solicitor promptly and ensuring the gift giver provides information quickly helps keep the transaction on track.
Reasons to choose Home Legal Direct
- Get great savings, unbeatable value and flexibility by instructing a conveyancer through Home Legal Direct
- If your property transaction falls through, fees paid to Home Legal Direct will be held for use on your new transaction
- Home Legal Direct’s client support team is available to assist throughout the process
- Complete your ID and AML checks quickly and easily online
- Searches and surveys arranged through Home Legal Direct for your convenience
- All major lenders are covered and changing between firms is at no extra cost
Get Essential Support from Home Legal Direct
Home Legal Direct can connect you with conveyancing firms well placed to carry out fast and compliant gifted deposit checks on your behalf.
You can request a quote via our website or call our expert team if you have uncertainties about any specific aspect of the conveyancing process.