Source of Funds for Conveyancing in England and Wales

What financial information do parents have to share if they are gifting funds to their children to buy their first property? Our Conveyancing Director, Tina Khanna, at RG Law, explains why parents must show a paper trail for gifted funds and why they can’t transfer funds directly to the conveyancer.

Why is a cash contribution not always an adequate source of funds for a property purchase? Our Conveyancing Director, Tina Khanna, at RG Law, explains why it is almost impossible to prove where cash has come from because it’s CASH! For example, if you have saved up sizeable cash gifts over the years received from your wedding, birthday etc along with other savings and your salary all in one bank account, you will have to prove what proportion of your money are cash gifts and from whom. The gifters will then need to prove the source of their cash gift but cash leaves no digital trail. So it is always better to keep cash deposits separate from your other savings and refrain from trying to use cash for a property purchase.

Why is a cash contribution not always an adequate source of funds for a property purchase? Our Conveyancing Director, Tina Khanna, at RG Law, explains why it is almost impossible to prove where cash has come from because it’s CASH! For example, if you have saved up sizeable cash gifts over the years received from your wedding, birthday etc along with other savings and your salary all in one bank account, you will have to prove what proportion of your money are cash gifts and from whom. The gifters will then need to prove the source of their cash gift but cash leaves no digital trail. So it is always better to keep cash deposits separate from your other savings and refrain from trying to use cash for a property purchase.

To get onto the property ladder first-time buyers are obtaining a gift. The Bank of Mum and Dad is one of the most popular lenders for first-time buyers. If you are planning to buy a property with a ‘gift of funds’ from your parents or someone else, you will need to supply certain information and documentation to your conveyancer and mortgage lender. Our Conveyancing Director, Tina Khanna, at RG Law, explains what you will need to collect together to prove the source of your funds, such as identification (ID) verification, value of funds, and confirmation of gifts in writing etc. Remember the person gifting you money will also need to prove their source of funds and carry out an ID and source of funds check also.

‘Source of Funds’ is an explanation of the funds that you are using to purchase a property and are an essential part of the conveyancing process. Our Conveyancing Director, Tina Khanna, at RG Law, explains what information you need to provide for both your source of funds and wealth check and the potential consequences of failing to supply the information.

What proof of source of funds do you need to satisfy the money laundering checks for your property purchase? Our Conveyancing Director, Tina Khanna, at RG Law, explains that if your source of funds is from a previous property purchase, your conveyancer will need to see the documentary evidence, such as a completion statement from the solicitor who acted for you on the sale, together with the corresponding bank account that the funds were transferred to.

At what stage do you need to show proof of funds when you are purchasing a property? Our Conveyancing Director, Tina Khanna, at RG Law, explains how important it is to provide all the necessary documentation to satisfy the strict guidelines and regulations early in the house-buying process. Delays in proving your source of funds could cause you to miss your completion date.