First time buyers and mum gifting some of the deposit

Beckyj1993

Me and my partner are first time buyers, my mum is gifting us some money towards the deposit. She has no photo identification and our Solictor is insisting we cannot go any further until she gets some. Application went in with the DVLA over 8 weeks ago due to strikes etc with them still not heard anything after phoning them numerous times. 

In the meantime the sellers have found a property and there is no chain so they are wanting to be in ASAP now we seem to be holding it up as the identification is still not back. Has anyone else been through this with no photo identification and found a way round it ? 

user1977

She'd probably have been faster applying for a passport. Has she ever had a UK passport? Shouldn't take all that long to renew it if so. Are the solicitors suggesting any alternative?

Rdwill

I'm not sure why the Solicitors involved. We did similar.

Mum and Dad 'lent' us £24k, (£12k each) and then wrote it off over the next 4 years as a gift of £3k each year. Providing they don't die in, i think, 7 years then you don't have to pay the tax.

We put our own paper work in place to say it was a loan, and each year they gave us a letter saying that they had written some of the loan of as this years gift allowance, until it was gone.

https://www.gov.uk/inheritance-tax/gifts

Beckyj1993

She’s never had a passport so we have would have to go through the original application process we can’t get it fast tracked already tried and the waiting times for a passport is up to 10 weeks plus the DVLA now have her marriage Certificates and other documents.
She is gifting us £7000 from my Nanas inheritance. Our mortgage advisor seems to think that we can use other documentation in replacement of photo identification, however our Solictor is saying no it has to be a passport or a driving licence. 

user1977

Rdwill said:

I'm not sure why the Solicitors involved. We did similar.

Mum and Dad 'lent' us £24k, (£12k each) and then wrote it off over the next 4 years as a gift of £3k each year. Providing they don't die in, i think, 7 years then you don't have to pay the tax.

We put our own paper work in place to say it was a loan

As part of a purchase? If there was also a mortgage involved, were the lenders aware it was a loan rather than a gift, or was this just a cash purchase?

In any event, the solicitors should have checked the source of funds, which would include seeing ID for your parents. If they didn't bother doing that, I'd be worrying about what else they were sloppy about...

user1977

Beckyj1993 said:

ur mortgage advisor seems to think that we can use other documentation in replacement of photo identification, however our Solictor is saying no it has to be a passport or a driving licence. 

It's up to them what will satisfy them, there aren't any general policies. You have actually told them about the current difficulties in getting ID and they're still saying there's no alternative?

MaryNB

Rdwill said:

I'm not sure why the Solicitors involved. We did similar.

Mum and Dad 'lent' us £24k, (£12k each) and then wrote it off over the next 4 years as a gift of £3k each year. Providing they don't die in, i think, 7 years then you don't have to pay the tax.

We put our own paper work in place to say it was a loan, and each year they gave us a letter saying that they had written some of the loan of as this years gift allowance, until it was gone.

https://www.gov.uk/inheritance-tax/gifts

Anti money laundering checks. Nothing to do with inheritance. The OP's solicitor (on behalf of the lender) needs to check that the funds have been legally obtained.

Rdwill

Maybe the rules have changed since 2013 when we did the transaction. There was no mortgage, just equity from house sale, plus inheritance from a great aunt, plus small loan from my parents.

No checks on sources of funds and no problems.

MaryNB

Rdwill said:

Maybe the rules have changed since 2013 when we did the transaction. There was no mortgage, just equity from house sale, plus inheritance from a great aunt, plus small loan from my parents.

No checks on sources of funds and no problems.

For people who need a mortgage things have change enormously since 2013. The rules for granting mortgages changed significantly in 2014 and I believe the anti-money laundering rules came in in 2017. I'm not familiar with cash purchases so don't know how the AML rules are applied (ETA: your solicitor will have to check even if no lender involved, if self conveyancing a seller's solicitor may not accept the funds if they haven't gone through AML checks).  

Most lenders won't accept a loan for part of the deposit, has to be a gift - no repayments, no interest in the property. 

My parents had to show where they got the money they gave me (a few month's worth of bank statements showing salary going in and some other docs). I had to show where my part of the deposit came from, they had to get ID verified, I had to show proof of the money being moved from their accounts to mine etc.

user1977

MaryNB said:

Rdwill said:

Maybe the rules have changed since 2013 when we did the transaction. There was no mortgage, just equity from house sale, plus inheritance from a great aunt, plus small loan from my parents.

No checks on sources of funds and no problems.

I believe the anti-money laundering rules came in in 2017. I'm not familiar with cash purchases so don't know if the AML rules are applied.  

They might have changed slightly in 2017 but pretty similar rules were in place in 2013. AML rules apply to all funds passing through the solicitors, nothing really to do with whether a mortgage is involved.

AdrianC

Beckyj1993 said:

Me and my partner are first time buyers, my mum is gifting us some money towards the deposit. She has no photo identification and our Solictor is insisting we cannot go any further until she gets some. Application went in with the DVLA over 8 weeks ago due to strikes etc with them still not heard anything after phoning them numerous times. 

In the meantime the sellers have found a property and there is no chain so they are wanting to be in ASAP now we seem to be holding it up as the identification is still not back. Has anyone else been through this with no photo identification and found a way round it ? 

The law says that solicitors must put everybody through money laundering checks.
The law does not say how they must do that. They do so to their own satisfaction.
If your solicitor says that your mother needs to provide photo ID, then she needs to provide photo ID.

She really doesn't have ANYTHING they'll accept? Photocard driving licence and passport are the obvious pair. But doesn't she have a photocard bus pass or a work ID or anything at all that they'll accept? If the solicitor is really that inflexible, then the quickest way forward may be to change solicitor.

DVLA have had well-documented postal delays for the last year or so, so no great surprise that they're taking a while.