When does money given to someone just become their money?

Billie1007

Family member was given 45k 12 months ago. Is it now considered to be their savings? They are thinking about buying a house - no mortgage required.

Many thanks 😊 

user1977

Probably. Depends how far back the solicitors want to check, but they're not likely to be looking back further than a year, typically they will ask for bank statements covering the last three months.

Gentoo365

If no mortgage is required it isn't the same issue.   

Lenders ask as they want to make sure there are no hidden loans, or others who could claim a legal interest in the property.

If someone is buying cash the solicitor just needs to run a few money laundering and identity checks etc. What you do with your own money is less of a concern that what you do with a banks money.

Billie1007

Gentoo365 said:

If no mortgage is required it isn't the same issue.   

Lenders ask as they want to make sure there are no hidden loans, or others who could claim a legal interest in the property.

If someone is buying cash the solicitor just needs to run a few money laundering and identity checks etc. What you do with your own money is less of a concern that what you do with a banks money.

Thanks. I think she's worried herself go ogling 'source of funds' information. She's the type to panic when she hears a police siren despite being well above the law! 

lucypilates

Cash buyers have to provide proof of where their funds come from … it’s got nothing to do with whether you have a mortgage or not.

Billie1007

lucypilates said:

Cash buyers have to provide proof of where their funds come from … it’s got nothing to do with whether you have a mortgage or not.

Thank you. So when does it become just your own money? 

MaryNB

Billie1007 said:

lucypilates said:

Cash buyers have to provide proof of where their funds come from … it’s got nothing to do with whether you have a mortgage or not.

Thank you. So when does it become just your own money? 

There's no hard and fast rule. I got a gifted deposit from my parents. My dad had a lump sum in his savings account for 2 years, renewed from a 5 year fixed term account and still had to show where it came from. 
It seems (from this forum) that 3-6 months or so is generally sufficient.

Your family member should check with their solicitor's at the start of the conveyancing process in case they need to provide more info than expected. £45k is a fairly hefty sum.

AdrianC

Billie1007 said:

lucypilates said:

Cash buyers have to provide proof of where their funds come from … it’s got nothing to do with whether you have a mortgage or not.

Thank you. So when does it become just your own money? 

The law requires solicitors to be certain that the source of the funds is legitimate.
How they do that is up to them.

The likelihood of laundering diminishes as time passes, but that speed varies according to the amount. Laundering half a mill over a year or three? Feasible. Laundering £10k over that time? Unlikely.

Of course, it also depends if this "gift" is from Uncle Luigi in Palermo or Auntie Mildred in Bognor Regis. And I assume the lucky recipient can provide some proof of this... because substantial gifts raise eyebrows if the donor's name is not easily forthcoming.

user1977

Worst case scenario is having to show the solicitor ID/bank statements from the gifter. Is that likely to be a big problem? 

Billie1007

user1977 said:

Worst case scenario is having to show the solicitor ID/bank statements from the gifter. Is that likely to be a big problem? 

Not if necessary. I think that the main issue is that she would rather keep her purchase private. 

Billie1007

AdrianC said:

Billie1007 said:

lucypilates said:

Cash buyers have to provide proof of where their funds come from … it’s got nothing to do with whether you have a mortgage or not.

Thank you. So when does it become just your own money? 

The law requires solicitors to be certain that the source of the funds is legitimate.
How they do that is up to them.

The likelihood of laundering diminishes as time passes, but that speed varies according to the amount. Laundering half a mill over a year or three? Feasible. Laundering £10k over that time? Unlikely.

Of course, it also depends if this "gift" is from Uncle Luigi in Palermo or Auntie Mildred in Bognor Regis. And I assume the lucky recipient can provide some proof of this... because substantial gifts raise eyebrows if the donor's name is not easily forthcoming.

😂 It's actually Uncle David from Chichester so a little less suspect!