"Gift" to Son & Resultant Aggro
Discussion
My youngest son is about to buy his first property, a nice studio flat in London. He's been paying us housekeeping for 8 years since he's been in paid employment, and as we didn't need the money, we've been paying it into a Marcus account in my wife's name, to return to him to help with his first property.
So when he found this flat and decided he could afford it, he was delighted to find out he has £19,500 extra which was his 8 years housekeeping. We took the money out of the Marcus and paid it into his account. This meant he could take out a lower mortgage by £20k.
The solicitors seem crazily obsessed about how he got his total deposit together. He's never had a car although he can drive, lives quite frugally, so sent over all details of his savings and how he'd accumulated it. They must have asked about 50 questions. But he answered them all. He also explained about the £19.5K from us.
Now the solicitors are kicking off big time over this £19.5K, to the extent that they required me to fill in a huge form on how I'd accumulated the money, I wasn't being coerced etc. I was a bit narked, if i want to give my lad £19K, or £190K, that's my business. Anyway, did what they'd asked. They'd previously asked for proof of the transfer from us to him and proof of him receiving it.
Jump to Friday, we're very close to exchange, and they've now said they want my wife to complete the same form I completed, and they want 6 months of our bank statements (joint account).
I replied on Friday to say get f
ked (politely), there's confidential info on my bank statements re income and outgoings that's got sod all to do with them, and my wife and I have a joint account so either one of us can do what we want.
Waiting to hear their reply. My son is worried it might effect the purchase, but I don't know this solicitor from a stray cat in the street and there's not a snowball's chance in hell they're getting 6 months of my bank statements. They're an online firm that my eldest son used 3 years ago. We did the self same thing for him and we had none of this hassle.
Coerced....ffs, I'm 62, not 92. And even if I was being coerced, they're meant to be acting for him, not me. It's my solicitors job to help me if I was being fleeced.
What's all this about? It's almost as if from the get go, they're convinced this is some big money laundering scam. Either that or I could almost believe that it's a young solicitor also in his 20s who is just angry that my son has accumulated such a large deposit and wants to make life as hard as possible. The hoops he had to jump thru to show how he'd got the rest of his deposit were crazy. Some it was money made from my lad buying and selling shares on eToro, and they couldn't get their head around that at all.
Thoughts?
What's the worst that can happen by me refusing their request?
So when he found this flat and decided he could afford it, he was delighted to find out he has £19,500 extra which was his 8 years housekeeping. We took the money out of the Marcus and paid it into his account. This meant he could take out a lower mortgage by £20k.
The solicitors seem crazily obsessed about how he got his total deposit together. He's never had a car although he can drive, lives quite frugally, so sent over all details of his savings and how he'd accumulated it. They must have asked about 50 questions. But he answered them all. He also explained about the £19.5K from us.
Now the solicitors are kicking off big time over this £19.5K, to the extent that they required me to fill in a huge form on how I'd accumulated the money, I wasn't being coerced etc. I was a bit narked, if i want to give my lad £19K, or £190K, that's my business. Anyway, did what they'd asked. They'd previously asked for proof of the transfer from us to him and proof of him receiving it.
Jump to Friday, we're very close to exchange, and they've now said they want my wife to complete the same form I completed, and they want 6 months of our bank statements (joint account).
I replied on Friday to say get f
ked (politely), there's confidential info on my bank statements re income and outgoings that's got sod all to do with them, and my wife and I have a joint account so either one of us can do what we want. Waiting to hear their reply. My son is worried it might effect the purchase, but I don't know this solicitor from a stray cat in the street and there's not a snowball's chance in hell they're getting 6 months of my bank statements. They're an online firm that my eldest son used 3 years ago. We did the self same thing for him and we had none of this hassle.
Coerced....ffs, I'm 62, not 92. And even if I was being coerced, they're meant to be acting for him, not me. It's my solicitors job to help me if I was being fleeced.
What's all this about? It's almost as if from the get go, they're convinced this is some big money laundering scam. Either that or I could almost believe that it's a young solicitor also in his 20s who is just angry that my son has accumulated such a large deposit and wants to make life as hard as possible. The hoops he had to jump thru to show how he'd got the rest of his deposit were crazy. Some it was money made from my lad buying and selling shares on eToro, and they couldn't get their head around that at all.
Thoughts?
What's the worst that can happen by me refusing their request?
Edited by TwigtheWonderkid on Saturday 9th August 20:33
Wouldn’t it be easier (in the grand scheme of things!) to just sign it and get it done?
I’m sure this is a money laundering thing, or something to do with it being a gift rather than a loan (the mortgage co will be insisting on clarification so they don’t have a competing claim to the property) so I’d say the worst that can happen is that the mortgage company refuse to complete and he doesn’t buy the flat?
I remember my parents doing similar when I bought my place.
IANAL & IANAMA.
I’m sure this is a money laundering thing, or something to do with it being a gift rather than a loan (the mortgage co will be insisting on clarification so they don’t have a competing claim to the property) so I’d say the worst that can happen is that the mortgage company refuse to complete and he doesn’t buy the flat?
I remember my parents doing similar when I bought my place.
IANAL & IANAMA.
The solicitor will have an obligation to understand the source of the funds. However only from their client. It does have an obligation to go one back. As you can imagine it's a never ending quest if taken literally. You could go back and back infanitum.
They are likely being over zealous as a result of misunderstanding their obligations and responsibilities. Regretfully if you decline I expect they will have grounds for doubt, this may lead to them not representing your son or making a spurious funding report. I don't recall what that entails.
It may just be easier to comply.
Ex Banker, got involved a lot in anti corruption and money laundering. Not taking part you understand
They are likely being over zealous as a result of misunderstanding their obligations and responsibilities. Regretfully if you decline I expect they will have grounds for doubt, this may lead to them not representing your son or making a spurious funding report. I don't recall what that entails.
It may just be easier to comply.
Ex Banker, got involved a lot in anti corruption and money laundering. Not taking part you understand
Can you print statements from Marcus to send them showing the money being drip fed in? Possibly with snippets of your main account statement showing transactions of sons money in beforehand.
It’s AML so they need to validate your story, they don’t need all your statements to do that, but you will need to give them something other than Foxtrot Oscar.
It’s AML so they need to validate your story, they don’t need all your statements to do that, but you will need to give them something other than Foxtrot Oscar.
I'm sure someone knowledgeable will be able to answer properly.
I don't see the big deal though they want to clamp down on money laundering and the source of funds and see where it's come from.
I would suspect that worst case may be that it can't go ahead of you don't play ball, maybe they have to report to the authorities the source of funds and in this case they can't establish it.
If you've nothing to hide I wouldn't be risking it for his sake houses are stressful enough it's easy to get hold of the statements.
I don't see the big deal though they want to clamp down on money laundering and the source of funds and see where it's come from.
I would suspect that worst case may be that it can't go ahead of you don't play ball, maybe they have to report to the authorities the source of funds and in this case they can't establish it.
If you've nothing to hide I wouldn't be risking it for his sake houses are stressful enough it's easy to get hold of the statements.
You just need to complete the forms as their assurance that you won't be cropping up in a few years and demanding the money back or claiming a share of the property. It's anti-fraud checks that have been implemented badly.
Solicitors still seem to think utility bills and bank statements physically exist as 'documents'. They also can't understand that some people don't have either a driving licence or a passport.
Solicitors still seem to think utility bills and bank statements physically exist as 'documents'. They also can't understand that some people don't have either a driving licence or a passport.
It’s anti-money laundering, I had to do the same for a much larger gift to buy a property
I didn’t provide bank statements, just a couple of years P60s showing sufficient earnings
Also the statement that this a gift and you will have no interest in or live in the property seems to be standard in the circumstances
I didn’t provide bank statements, just a couple of years P60s showing sufficient earnings
Also the statement that this a gift and you will have no interest in or live in the property seems to be standard in the circumstances
I've just (few weeks ago) done this for £60K and I was surprised how simple it was. Call-centre type conveyencer place wanted proof of source of funds but the money came from an account that had a lump put in it years ago (I think to put it in wife's name for tax purposes) and hasn't been touched since. I sent them last two year's statements, which didn't tell them anything other than interest being added and they never queried it further. That account has sat ther for 12 years - no way could I identfy the source of the money now.
With hindsight I'd have used funds that have moved around more recently and that I could show a bit of an audit trail for.
I guess sometimes they're just going through the motions. Wife had similar trying to increase the credit limit on her M&S card - they asked for income details - she said £30K. They said "prove it". She sent state pension statement (like £11K) and they approved th ecredit limit increase.
With hindsight I'd have used funds that have moved around more recently and that I could show a bit of an audit trail for.
I guess sometimes they're just going through the motions. Wife had similar trying to increase the credit limit on her M&S card - they asked for income details - she said £30K. They said "prove it". She sent state pension statement (like £11K) and they approved th ecredit limit increase.
A few years ago I was told by Lloyds Bank it would take a month to clear a cheque from the USA, "Due to anti money laundering legislation". The cheque was a tax refund from the IRS. I took the cheque back & it was accepted with no hassle into my account with Nationwide. Anti-money laundering seems to be applied with no common sense. I had the same as the OP when giving £20k towards the deposit for a house to my daughter.
We went through this when gifting £30k to our daughter towards a flat deposit in London a few years ago. Her solicitor's AML alarms went beserk when a transfer arrived from UBS Geneva. As it happened, six months earlier I had cashed in a UK private pension for about twice the amount, so I sent them the documents linked to that, and a copy of the UBS sterling account statement showing it being paid in. That, together with the usual "this is a gift, non-repayable and in no way constitutes a claim for partial ownership of the property" declaration, seemed to do the trick.
Michael_B said:
We went through this when gifting £30k to our daughter towards a flat deposit in London a few years ago. Her solicitor's AML alarms went beserk when a transfer arrived from UBS Geneva.
Did you transfer directly to the solicitor? Daughter's wouldn't allow that and to get the money from the account my wife had it in, it had to be paid to her bank account, they wouldn't send to daughter direct. So no chance of 'keeping it in the background' as hoped.Sheepshanks said:
Did you transfer directly to the solicitor? Daughter's wouldn't allow that and to get the money from the account my wife had it in, it had to be paid to her bank account, they wouldn't send to daughter direct. So no chance of 'keeping it in the background' as hoped.
No, it was all very last minute and I transferred it to my daughter's Barclays account, who sent it on to her solicitor. Solicitor then asked for provenance of funds so my daughter sent the pdf of the UBS transfer I had sent her from my e-banking. As I had recently cashed in the UK pension to that account, and could easily show that to be the case, it was enough for AML porpoises.It's an Anti Money Laundering requirement.
Rather than cause your son problems with his purchase, just tick the box and provide the statements? If the solicitor has requested them, they need them and can't proceed without them, they won't/can't just proceed without them.
They are professionals, everything is covered by the Data Protection act, they don't care about your income or other transactions, they just want to help your son buy the property, refusing isn't helping him......
Rather than cause your son problems with his purchase, just tick the box and provide the statements? If the solicitor has requested them, they need them and can't proceed without them, they won't/can't just proceed without them.
They are professionals, everything is covered by the Data Protection act, they don't care about your income or other transactions, they just want to help your son buy the property, refusing isn't helping him......
Surely in this case in hindsight with all the agro. Assuming your son could get a mortgage without your £20k gift then the solution is for him to take out the mortgage on his own for the full amount and then let him just overpay the mortgage.
I’m with nationwide, they allow 10% of the initial mortgage value per year without penalties. We overpaid about £50k in 10 years of our mortgage and have never paid a penny in penalties.
I’m assuming (being a northerner) that the property is worth over £200k in London so with nationwide (I’m assuming most mortgage lenders offer similar) he would be able to overpay the £20k on day 1 of the mortgage without a penalty.
I’m with nationwide, they allow 10% of the initial mortgage value per year without penalties. We overpaid about £50k in 10 years of our mortgage and have never paid a penny in penalties.
I’m assuming (being a northerner) that the property is worth over £200k in London so with nationwide (I’m assuming most mortgage lenders offer similar) he would be able to overpay the £20k on day 1 of the mortgage without a penalty.
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