Overseas father-in-law gifting money for a house

DG24

Hi all,

I've done a lot of searching for the answer to this, but have drawn blanks so far. My father-in-law wants to help my wife and I get onto the property ladder by gifting us a significant amount of money towards buying us a house. We're very fortunate that he is being so generous, and it came as a surprise to both of us.

To give some more details:

- We're currently renting a flat, and neither of us have owned a property before.
- My father-in-law is not and has never been a British citizen, and is from/lives in a country in Southeast Asia.
- The money is intended as a gift, not a loan, so no repayments are expected.

His idea of doing this is to send the money via bank transfer to my wife's current account, and then we just go ahead and buy a house. This sounds far too simple to me... But I can't find anything online about this.

I'm expecting that at the very least he will have to send a signed letter stating that the money is a gift to us, but beyond this I have no idea if there is any taxation or any other process we need to go through, or how the money should be transferred.

I realise that this won't be too common a problem for many people - but I'm hoping there may be someone out there with a bit more (ideally a lot more!) legal knowledge than me on the situation.

Thanks a lot in advance for any help you can give - I really appreciate it!

hazyjo

Yes, he'll prob have to provide a letter - along with proof of where the money has come from for money laundering purposes.

00ec25

DG24 wrote: »

His idea of doing this is to send the money via bank transfer to my wife's current account, and then we just go ahead and buy a house. This sounds far too simple to me... But I can't find anything online about this.

you can't find anything because it is as simple as that

BUT because the money is coming from a non EC country your solicitor is required by law to perform some detailed Anti Money Laundering checks. Note that if your FIL is resident in one of the "sanctioned" countries on the list below then any money he sends will be rejected and there is no way around that:
http://www.bscn.nl/sanctions-consulting/sanctions-list-countries


if he is from an OK country then your solicitor must do the following checks:

1. Proof who the donor is
these documents must be copied and sent to the UK. They will need to be signed as certified copies by a legal/official notary in your FIL's country
- ID document eg: your father's passport or national ID card
- proof of FIL's address eg: bills, bank statement etc

2. Proof of the source of funds
- letter from your FIL stating that the money is a gift, not a loan
- your bank statement showing how and when the money came to you
- evidence from your FIL as to how he got the money in the first place, eg: bank statements showing savings building up over time, receipts from the sale of a property or other investments etc
read this:
https://www.samconveyancing.co.uk/news/conveyancing/how-to-prove-source-of-funds-1614

Bear in mind that because of the size of the sum of money your wife's bank will also undertake its own checks so it is best to let them know in advance it is coming and ask them what, if anything, they need from your wife or her father.

davidmcn

The question of whether it's a gift or a loan only really matters if there's also a mortgage involved (I am guessing from the OP that there isn't). But in any event the solicitors will need to check the source of funds and ID.