Gifted Deposit Solicitor Checks: What You Need to Know

A gifted deposit is money that a family member, most often a parent, gives to a buyer to put towards a property purchase, with no expectation that it will ever be paid back. If you're buying with help from your family, your solicitor needs to run through a specific set of checks on both you and the person providing the gift before your purchase can complete. It sounds daunting, but if you gather the paperwork in advance, it rarely causes a delay to your purchase.

A gifted deposit differs from a loan in one crucial way: the donor has no right to be repaid and no stake in the property you buy. Lenders draw a hard line between the two because a loan changes your affordability calculation, if you owe someone money on top of your mortgage, that's a debt the lender needs to factor into what they'll lend you. A gift doesn't affect your borrowing capacity because you have no obligation to pay it back.

Around 37% of first-time buyers in England now rely on some form of family financial help to get onto the property ladder, according to ONS data, making gifted deposits one of the most common funding sources solicitors deal with. This makes the checks routine for most conveyancers, but it doesn't mean you can skip preparing the right documents.

Whether you're arranging a first-time buyer mortgage or you've bought before, understanding these checks upfront helps you avoid disruption to the conveyancing process once your gifted deposit lands in your account.

Before your solicitor can accept a gifted deposit as part of your purchase funds, they must complete a set of checks required under UK money laundering rules. These checks exist to confirm that the money genuinely is a gift, that it hasn't come from an illegitimate source, and that the person giving it is who they say they are. The checks apply to the donor, not just to you as the buyer, which is often the part people find surprising.

Identity Verification of the Donor

Your solicitor will ask the donor for proof of identity, typically a valid passport or driving licence, along with proof of address dated within the last three months, such as a recent utility bill or bank statement. This mirrors the identity checks carried out on you as the buyer and is a standard requirement under the Money Laundering Regulations 2017.

Anti-Money Laundering (AML) Checks

Solicitors are legally required to verify that gifted funds are not connected to criminal activity. This means running the same due diligence checks on the donor that they run on you, including electronic identity verification and, in some cases, a face-to-face or video verification call. The Solicitors Regulation Authority requires firms to apply a risk-based approach, so donors from higher-risk jurisdictions or those making larger gifts may face more detailed questioning.

Source of Funds Verification

Your solicitor needs to see where the gifted money actually came from, not just that it exists in the donor's account. This usually means three to six months of bank statements showing the funds building up through salary, savings, or the sale of an asset such as shares or a previous property. If you need a refresher on how this fits into your wider mortgage application, our guide to proof of funds covers what lenders expect to see.

Gifted Deposit Declaration Letter

The donor must sign a formal declaration confirming the money is a gift, not a loan, and that they have no financial interest in the property. Solicitors typically provide their own template for this, though the next section covers what it needs to include.

If someone is gifting you money towards your deposit, they'll need to pull together a short list of documents themselves, separate from anything you provide as the buyer. It's worth sharing this section directly with them so they know what's coming and why, since many donors find it surprising that a solicitor needs to check their finances.

1. Photo ID: A valid passport or driving licence to confirm identity.
2. Proof of address: A utility bill or bank statement dated within the last three months.
3. Bank statements: Typically three to six months, showing where the gifted funds came from and that they've been held long enough to rule out last-minute borrowing.
4. Signed gifted deposit declaration letter: Confirming the money is a gift, not a loan.
5. Confirmation of no interest in the property: A written statement that the donor won't seek repayment or claim any share of the property later.

If more than one person is contributing, such as both sets of parents chipping in, each donor needs to go through this process separately, which can add a week or two to your timeline if you don't get everyone's paperwork moving early.

The gifted deposit declaration letter is the single most important document in the whole process. It's a signed statement from the donor that removes any ambiguity for the lender and protects everyone from future disputes about whether the money was really a gift. Most solicitors provide their own template, and you should always use the version given by whichever firm is handling your purchase rather than a generic one you find online, since some lenders have their own required wording.

• Donor's full name and address: Matching the ID and proof of address they've provided.
• Relationship to the buyer: Parent, grandparent, sibling, friend, or other.
• Exact amount being gifted: Stated in full, not rounded or approximate.
• Confirmation it is a gift, not a loan: With no expectation of repayment.
• Confirmation of no interest in the property: The donor won't gain any legal or beneficial share.
• Donor's signature and date: Ideally witnessed, depending on your solicitor's requirements.

Because the exact wording can vary between lenders and solicitors, treat this as a guide to what should be covered rather than a template to copy directly. Your solicitor will supply the version that satisfies your specific lender.

Lenders take different views depending on who's providing the gift, and it affects how much scrutiny you and the donor will face. Immediate family members face the easiest process, while gifts from friends or people further outside your family tree usually mean extra questions.

• Parents: Accepted by every mortgage lender and the most common source of gifted deposits.
• Grandparents and siblings: Accepted by most lenders, though a small number ask for additional context on the relationship.
• Other family members: Aunts, uncles, and cousins are usually fine but expect closer questioning on the relationship and source of funds.
• Friends or non-family donors: Accepted by some lenders but expect enhanced checks, and a handful of lenders won't accept non-family gifts at all.
• Partners not named on the mortgage: Treatment varies significantly by lender, some ask for extra confirmation that the partner won't gain a financial claim over the property.
• Overseas donors: Accepted by most lenders but expect additional anti-money laundering requirements, currency conversion evidence, and extra time for checks to clear.

Because policies differ so much lender to lender, it's worth checking with your mortgage broker or solicitor early if your donor doesn't fit the parent-to-child mould.

Gifted deposits can have inheritance tax consequences for the donor's estate, though it's worth being clear from the outset: as the buyer, you never pay this tax yourself. It only applies to the donor's estate if they die within seven years of making the gift.

Take a worked example: a parent gifts £30,000 towards their child's deposit and then dies five years later with an estate above the nil-rate band. Because the gift falls within the seven-year rule, HM Revenue and Customs applies taper relief, reducing the tax charged on that portion of the estate compared with a gift made shortly before death.

Each person can also gift up to £3,000 a year without it counting towards their estate at all under the current annual exemption, and this allowance can be carried forward one year if unused, giving a couple up to £12,000 combined if neither used the previous year's allowance.

If the gift is large relative to the donor's estate, or they're not confident about the seven-year window, it's worth speaking to a tax adviser rather than relying on general guidance, since everyone's inheritance tax position depends on their full estate.

Donor Reluctant to Share Bank Statements

It's common for parents to feel uncomfortable handing over months of bank statements to a solicitor, especially if this is the first time they've been asked. Explain that this isn't optional scrutiny of their finances, it's a legal requirement under anti-money laundering rules that applies to every gifted deposit, regardless of how the money was earned. Sharing this guide with them directly often helps, since it comes from a neutral source rather than sounding like an accusation from their own child.

Gift From Overseas

If your donor is based outside the UK, build in extra time. Currency conversion, international bank statements, and additional anti-money laundering checks on overseas transfers can add one to two weeks to the process, so flag this to your solicitor as early as possible.

Multiple Gifts From Different Donors

If you're receiving money from more than one source, say both sets of parents, each donor needs to go through the full identity, AML, and source of funds process separately. Get everyone's documents moving at the same time rather than waiting for one before starting the next.

Last-Minute Gift

A gift that appears shortly before exchange without warning can hold up your purchase while checks are completed from scratch. Tell your solicitor the moment a gift becomes a possibility, even before the amount is confirmed.

Gift Disguised as a Loan

Never present a loan as a gift to get around affordability checks. If a lender later discovers repayment was expected, whether through a side agreement or a change of heart from the donor, they can treat it as mortgage fraud and refuse or unwind the mortgage entirely.

Most solicitors charge an additional fee to cover the extra due diligence a gifted deposit requires, typically between £75 and £200 plus VAT per donor. Some conveyancers build this into their standard quote rather than listing it separately, so it's worth asking upfront rather than being surprised on your completion statement. If more than one person is gifting money, expect a separate charge for each donor since the checks have to be repeated in full for every individual.

Fees also vary depending on the type of conveyancer you use. Online conveyancing firms sometimes bundle gifted deposit checks into a fixed fee, while high-street solicitors are more likely to itemise them as a separate charge on your final bill. Because the amount is small relative to your overall legal costs, it's rarely worth choosing a solicitor on this fee alone, though it's still worth confirming before you instruct anyone so there are no surprises at completion.

For a full breakdown of what else you'll pay across your purchase, see our guide to conveyancing fees, and if you haven't chosen a solicitor yet, take time to find your conveyancer with experience handling gifted deposits smoothly.