Source of funds - AML checks - question

Mike997

Hi Everyone,

I am planning to buy my first property, either Cash Purchase if I go for a flat for around £140k or a Freehold house with high deposit and mortgage. Currently I am checking Rightmove but I like to be prepared, so I checked a couple of sites to know what do I need to prepare in order to get things moving smoothly once I have found a property I like.

I am bit concern around “Source of funds” (I believe it is called AML?). Now just asking about that might sound dodgy already but let me explain first what I mean. I am usually over thinking but I just like to be prepared for the worst case scenario to avoid problems. I earned every penny honestly and legally, however I am not a typical 9-5 guy, so I wanted to clarify a couple of issues:

1. I am working as a LTD Contractor (director of my own company) in Construction, sort of self-employed. As every LTD Contractor, I pay some of earnings to myself as Salary and some as Dividend. I file SA302 along with Corporation Tax each year. The first question is whether working as LTD will be a problem?

2. Over the last 10 years I was working a bit on and off, as I am working on contracts. I get a 12-18 months contract and then can get another one, or take 6 months break if I want. So over the last 10 years I had 2 gaps of 1 year each (I wasn’t in the UK during that period and was not working either). Is something like that a problem?

3. Over the first couple of years of employment I had 2 different accountants but they were totally useless. Had to check them nonstop and I was picking up their errors constantly so I lost trust in accountants and since 2018-19 tax year I decided to do this myself, especially that my accounts and expenses are dead simple. Is doing your accounts yourself a problem?

4. In 2020 I transferred a large sum of money from my UK account to my account in a country in the EU (it was exchanged to a different currency). Both accounts are mine on my name and obviously I can show bank-statements confirming it from both banks. Now I transferred some of this sum back to the UK (from the same account to the same account in the UK). Is something like that a problem?

I think that is everything I can think of. As usual, I am probably over-thinking, but I just want to avoid problems / delays for some BS reasons.

Thanks in advance.

Regards

user1977

None of the above is in itself a problem. I assume all the funds arrived in your / your company's accounts by methods which will provide an obvious paper trail if anybody investigates i.e. bank transfers with associated invoices / payslips etc?

How recently was the bank transfer from the EU account back to the UK? Somebody might want more on that e.g. translated bank statements.

propertyrental

There are no firm rules. Basically you have to satisfy your solicitor that the funds are kosher so ultimately it's up to him/her to decide what he's happy with.

But if there's a clear paper chain showing the origins of the money that should be fine.

Mike997

user1977 said:

None of the above is in itself a problem. I assume all the funds arrived in your / your company's accounts by methods which will provide an obvious paper trail if anybody investigates i.e. bank transfers with associated invoices / payslips etc?

How recently was the bank transfer from the EU account back to the UK? Somebody might want more on that e.g. translated bank statements.

Yes, I have been working for years for a reputable company, the only difference is that I do so through my LTD Company rather than being directly employed, so I can provide all payslips received by my LTD Company each week no problem. Then I just pay it from my LTD Business Account to my personal account and file a SA302 tax return at the end of the year for me and Company tax return for my LTD Company.

I can obviously provide all payslips etc. just want to make sure I know what is needed, so I can avoid wasting weeks and weeks waiting for some paper copies if they are not happy with PDF etc. 

That bank transfer back to the UK is very recent, 2 or 3 weeks ago but again, I just sent back some of my money that I sent out in I think 2020 (again shown clearly on my Bank Statement here and in the other country). Obviously I can provide a bank statement from the other country, as this is my account on my name but again, I don't want to be in a situation, that they will ask for a paper copy, then some translation etc. as that would be a pain.

I guess the best solution is to find a solicitor now, before I have got a property lined up and just have a chat with him / her to clarify it and start the process of verification now.

user1977

Indeed, there are no standard requirements, so best to check what your solicitor will need.