Proving Provenance of House Deposit
Discussion
Our daughter is going through the process of buying her first house with her boyfriend. As a contribution to her deposit we are giving her twenty thousand pounds which came from my late mother-in-laws estate - she died in 2012. Daughter's solicitor is now asking - at the eleventh hour for proof that this money has come from where we say it has and is asking for our bank statements and the Estate Account from late 2012 to substantiate that.
Is this now normal practice and /Rant Mode On/ if so why not ask this when the appropriate identity docs were supplied 3 months ago?
Is this now normal practice and /Rant Mode On/ if so why not ask this when the appropriate identity docs were supplied 3 months ago?
Afraid so. I recently bought a property for cash (not literally). The starting point from the solicitor was that I must be a drug dealer or held up a bank. Quite intrusive probing of origination of funds. Company bank statements / accounts required to show legitimate source of dividends etc. As noted previously, none of this applies if you are Russian.
Edited by troika on Thursday 13th June 22:19
aspirin said:
Yes that's the frustrating bit, particularly as we away at the moment.
Thanks for all the replies.
ks isn’t it. A house purchase really shouldn’t be so difficult. Estate agents, solicitors and in our case bad advice from a mortgage advisor made it very very complicated with the end result being me running around Kathmandu to find a couple of westerners to witness my documents and then fax them off from a backstreet print shop in Thamel. All fun and games.
troika said:
Afraid so. I recently bought a property for cash (not literally). The starting point from the solicitor was that I must be a drug dealer or held up a bank. Quite intrusive probing of origination of funds. Company bank statements / accounts required to show legitimate source of dividends etc. As noted previously, none of this applies of you are Russian.
Is that not why Unexplained Wealth Orders were created?djc206 said:
troika said:
Afraid so. I recently bought a property for cash (not literally). The starting point from the solicitor was that I must be a drug dealer or held up a bank. Quite intrusive probing of origination of funds. Company bank statements / accounts required to show legitimate source of dividends etc. As noted previously, none of this applies of you are Russian.
Is that not why Unexplained Wealth Orders were created?Update:
Rather than try and go back 7 years we provided the Solicitor with confirmation of a Life Insurance payout and the corresponding Bank Statement from a Life Policy my own mother had taken out which was paid to me in December last year. Said Solicitor confirmed on Monday that this was fine but now is asking for proof that the £20k we gave my daughter has come from that, and wants every bank statement from December showing sufficient funding until the 20K goes out.
Trouble is, that account went up and down as most do and went below 20K until my son repaid a loan. I can see this being a long process
Rather than try and go back 7 years we provided the Solicitor with confirmation of a Life Insurance payout and the corresponding Bank Statement from a Life Policy my own mother had taken out which was paid to me in December last year. Said Solicitor confirmed on Monday that this was fine but now is asking for proof that the £20k we gave my daughter has come from that, and wants every bank statement from December showing sufficient funding until the 20K goes out.
Trouble is, that account went up and down as most do and went below 20K until my son repaid a loan. I can see this being a long process
Completely normal.
Me and my siblings have usually lent each other money when one of us has been buying a house. Recently (the last 5 years or so?) the Solicitor has asked for proof to confirm where the money has come from. As long as the source of funds is traceable then copies of bank statements and a covering letter has usually sufficed.
IIRC the only annoying thing was that the person lending the money had to state it was a "Gift" as opposed to a loan (even though the intention was to repay the money). I can't remember why
Me and my siblings have usually lent each other money when one of us has been buying a house. Recently (the last 5 years or so?) the Solicitor has asked for proof to confirm where the money has come from. As long as the source of funds is traceable then copies of bank statements and a covering letter has usually sufficed.
IIRC the only annoying thing was that the person lending the money had to state it was a "Gift" as opposed to a loan (even though the intention was to repay the money). I can't remember why
Countdown said:
IIRC the only annoying thing was that the person lending the money had to state it was a "Gift" as opposed to a loan (even though the intention was to repay the money). I can't remember why
Because if it formally declared as a loan the person borrowing the money could stake a claim to a portion of the property whilst the money was outstanding........A question to Sarnie/Liam : what happens in a situation where the buyer has the funds to buy the property outright without the need for a mortgage? For example if I'd been saving up for the past 20-30 years by randomly depositing spare cash into a savings account and also received periodic cash gifts from family which also got stashed away in the savings account, bringing me to a point where I could buy a property outright for "cash", is a paper trail still legally required? My research has resulted in conflicting info on this. Some say that the solicitor would only want to see proof that you actually have the money sat ready to go in your account, but others say AML checks would still apply and you'd need to provide a paper trail for the source of funding. As the latter would be impossible to prove given the time period, what do you do about it?
Sarnie said:
Countdown said:
IIRC the only annoying thing was that the person lending the money had to state it was a "Gift" as opposed to a loan (even though the intention was to repay the money). I can't remember why
Because if it formally declared as a loan the person borrowing the money could stake a claim to a portion of the property whilst the money was outstanding........I remember why it made me feel a bit uncomfortable, I was basically lying on my application form, plus I had to explain to the people that I borrowed it from that "officially" the money they were lending me was a gift.....which I am sure worried them a bit
Lemming Train said:
A question to Sarnie/Liam : what happens in a situation where the buyer has the funds to buy the property outright without the need for a mortgage? For example if I'd been saving up for the past 20-30 years by randomly depositing spare cash into a savings account and also received periodic cash gifts from family which also got stashed away in the savings account, bringing me to a point where I could buy a property outright for "cash", is a paper trail still legally required? My research has resulted in conflicting info on this. Some say that the solicitor would only want to see proof that you actually have the money sat ready to go in your account, but others say AML checks would still apply and you'd need to provide a paper trail for the source of funding. As the latter would be impossible to prove given the time period, what do you do about it?
FWIW I purchased a house in the U.K. with cash in 2017, with money I saved up in Hong Kong. I transferred it to my HSBC account in the U.K., and transferred that to my solicitor. Never heard anything about it. I seem to recall that my solicitor said something along the lines that someone may need to see where that cash accumulated - not an issue if you can provide bank statements showing your account growing from saving.
Nothing materialised. If it makes a difference it was for a house priced around the U.K. average - not a townhome in Kensington.
Lemming Train said:
Some say that the solicitor would only want to see proof that you actually have the money sat ready to go in your account, but others say AML checks would still apply and you'd need to provide a paper trail for the source of funding. As the latter would be impossible to prove given the time period, what do you do about it?
In theory you could just do without a solictor your side and DIY it! (I don't know if the seller's solicitor requires proof of the source of the funds, I assume not)Gassing Station | Finance | Top of Page | What's New | My Stuff