Cash gift

jen_fpb

Not sure if this is the right board so please move if not the right place

Myself and my husband are looking to recieve a large gift of money from his brother in Canada (£100,000+). We understand that this is a gift and so no tax implications other than on any interest earnt or if brother passes away within 7 years. We are likely to use this to pay off our mortgage and/or use when we move house. I have been lucky enough to have a gifted deposit before and have filled in associated forms. As this gift might be given some time before we move, how can we prove its a gift? Is there any official forms to fill in?

user1977

Just get something in writing from your brother-in-law saying it's a gift. There's no "official" way of doing it.

MaryNB

When you are in the process of buying a house either your lender or your solicitor (who will be acting for your lender) will require your brother in law to fill in a letter (they'll likely give you a template) saying it is a gift that does not require repayment and he won't retain any interest in the house.

If you can put in a reference on your bank statements that explain the transactions it will make it easier for the solicitor to trace. How did you brother in law get the money? Savings over a long time or a lump sum from somewhere? Your solicitor may ask him for evidence of how he got this money, along with verified ID and proof of address.

jen_fpb

MaryNB said:

When you are in the process of buying a house either your lender or your solicitor (who will be acting for your lender) will require your brother in law to fill in a letter (they'll likely give you a template) saying it is a gift that does not require repayment and he won't retain any interest in the house.

If you can put in a reference on your bank statements that explain the transactions it will make it easier for the solicitor to trace. How did you brother in law get the money? Savings over a long time or a lump sum from somewhere? Your solicitor may ask him for evidence of how he got this money, along with verified ID and proof of address.

We might get the money a few months before we buy a house. If we do we will be cash buyer and no mortgage 

user1977

If there's only a few months then it's pretty likely the solicitors will want evidence of the source of funds (i.e. that it is genuinely your BiL's money), so be prepared to provide his ID and bank statements. For a cash purchase the solicitor won't care whether it's a gift or a loan.

simon_or

I was in a similar situation a few years ago, though not as large a gift.

I overpaid my then mortgage as much as I could, used the gifted funds in a separate current account for all our expenses while saving 100% of all income.

So at the time of moving the source of deposit was all equity from sale and savings, no gifted deposit kerfuffle.

I appreciate it might not be as easy with such a large amount, but perhaps it may help.

If it is a gifted deposit, then the bank will usually need a letter in a specific format.

jen_fpb

simon_or said:

I was in a similar situation a few years ago, though not as large a gift.

I overpaid my then mortgage as much as I could, used the gifted funds in a separate current account for all our expenses while saving 100% of all income.

So at the time of moving the source of deposit was all equity from sale and savings, no gifted deposit kerfuffle.

I appreciate it might not be as easy with such a large amount, but perhaps it may help.

If it is a gifted deposit, then the bank will usually need a letter in a specific format.

Thanks. This is what we plan to do! Pay off existing mortgage but it will still leave some money left from the gift.

I've had a gifted deposit before but this is just a gift for anything so we may get it beforehand! 

jen_fpb

Would we be OK to get a letter stating its a gift. Use some to pay off current mortgage. Then in a few months when we are ready to move, use house sale, our savings and rest of the gift to buy. We would be cash buyers. Would we need to provide proof of the gift still or would the original letter be enough? 

user1977

Like I said above, if it's a cash purchase then nobody else in the transaction is going to care whether it was a loan or a gift. 

jen_fpb

Would the solicitors still not need to see any proof from brother in law etc?

Sorry, I've been through gifted deposit before but not just a gift where we may get before we move

user1977

jen_fpb said:

Would the solicitors still not need to see any proof from brother in law etc?

Sorry, I've been through gifted deposit before but not just a gift where we may get before we move

Like I said above, they'll need to verify the source of funds. So ID and bank statements. But (unlike where there's a mortgage involved) they don't need to know whether he's lent it to you or gifted it.