Gifting small deposit to son

I_would_rather_be_gardening

Hi
i decided to gift my son £6k for his deposit so that he could get a more favourable interest rate. He has maxed out  LISAs for the last 4 years, as has his wife.
So I transferred the money via BACS, completed a gifted deposit letter stating it was a gift not a loan, and I would not have any ownership rights and I would not live in the house after purchase. I assumed I would also need to provide ID eg passport and a utility bill.

The mortgage provider wanted me to complete their form, just a quick print out and a signature. So no problem.

The solicitors have been a nightmare. I have needed to download an app on my mobile phone do a digital scan of my passport and my driving license upload a copy of my driving license plus confirm the £6000 was a gift. Next I had to provide either six months of bank statements of the bank account where the deposit came from or alternatively I had to connect via open banking my bank account with solicitors. As my son could not proceed with the purchase I had no choice but to connect my bank account via open banking so the solicitor could see the last six months of transactions on my account. I feel this is completely disproportionate to £6000  if I was transferring a substantial amount of money I could understand it for £6000 really?

I had to complete more identity checks including giving my national insurance number, a copy of m marriage certificate (married over 30 years) and agreeing to a bankruptcy search. 

 believe that the solicitors are using disproportionate methods for their anti-money laundering compliance.

What do others feel? 

MattMattMattUK

I_would_rather_be_gardening said:

Hi
i decided to gift my son £6k for his deposit so that he could get a more favourable interest rate. He has maxed out  LISAs for the last 4 years, as has his wife.
So I transferred the money via BACS, completed a gifted deposit letter stating it was a gift not a loan, and I would not have any ownership rights and I would not live in the house after purchase. I assumed I would also need to provide ID eg passport and a utility bill.

The mortgage provider wanted me to complete their form, just a quick print out and a signature. So no problem.

The solicitors have been a nightmare. I have needed to download an app on my mobile phone do a digital scan of my passport and my driving license upload a copy of my driving license plus confirm the £6000 was a gift. Next I had to provide either six months of bank statements of the bank account where the deposit came from or alternatively I had to connect via open banking my bank account with solicitors. As my son could not proceed with the purchase I had no choice but to connect my bank account via open banking so the solicitor could see the last six months of transactions on my account. I feel this is completely disproportionate to £6000  if I was transferring a substantial amount of money I could understand it for £6000 really?

I had to complete more identity checks including giving my national insurance number, a copy of m marriage certificate (married over 30 years) and agreeing to a bankruptcy search. 

 believe that the solicitors are using disproportionate methods for their anti-money laundering compliance.

What do others feel? 

The amount does not matter, if it was £600 or £600,000 the solicitors still have to comply with the AML rules.

Now that being said it does sound as if this particular solicitor is being excessive and that they have made their process particularly difficult and cumbersome, unless some things were flagged as part of the earlier parts of the process. I suspect that this is a very cheap conveyancing solicitor, the process is largely automated, probably outsourced and it just asks every possible question by default. 

Exodi

Solicitors are bound by AML to ensure that you're not a foreign drug lord laundering the money through property purchases. Obviously you know you're not and they know you're not, but they're required to check.

I know it feels uneasy, my ex partners father offered a gifted deposit, then started to throw his toys out the pram when asked for bank statements. He got so silly over it (including crossing out terms and conditions on the gifted deposit form which got rejected multiple times) that I said repeatedly to not worry about providing the money, it wasn't required (he more insisted to help his daughter, but then turned it into a massive drama). I've seen many threads over the years where parents/grandparents have become particularly agitated at this request.

Is your complaint the digital side (that you had to scan your passport and driving license instead of physically taking it into the solicitor/open banking)? I'm sure many (myself included) prefer this convenience.

Or is it because you were asked to provide bank statements at all? You didn't have to connect via open banking, you could have taken in statements, it just wasn't an option to do neither.

If it's the amount, then what sum do you think it's reasonable to conduct AML checks and what sum isn't?

£10k+ should follow the rules, but £9,999 we look the other way?

I'm not sure about why you needed to provide your NI number/marriage certificate/bankruptcy search but then I don't know the circumstances. I doubt the solicitor is getting any kick out of asking for this information from you, quite the opposite as most people would moan about providing it, I expect they're just doing their job.

But if you think they are asking for information they don't require, you could always consider raising a formal complaint.

I_would_rather_be_gardening

Thanks. I do not mind providing ID but I feel that asking for 6 months of statements or connecting via open banking was excessive, as was asking my annual salary, asking me to confirm any large deposits into the account and for my NI Number and marriage certificate.

i have been married over 30 years, lived at the same address for more than 20 and have a good credit score. 

user1977

I_would_rather_be_gardening said:

Thanks. I do not mind providing ID but I feel that asking for 6 months of statements or connecting via open banking was excessive, as was asking my annual salary, asking me to confirm any large deposits into the account and for my NI Number and marriage certificate.

i have been married over 30 years, lived at the same address for more than 20 and have a good credit score. 

The solicitors don’t know you from Adam though. And they have to evidence that they’ve done these checks - otherwise they risk being fined, even if the funds are totally legit. All normal.

saajan_12

Of course the checks will vary based on the amount - if you received £60 from a friend no solicitor is going to ask for the same level of proof. There should be some (minimal) checks for £6k and many more for £600k. Many reasons for this, its reasonably likely that the person had smaller amounts legitimately, they're less likely to bother money laundering for smaller amounts, etc. 

OP, some of that is reasonable IMO, eg some bank statements to see that the amount has been in your account or accrued over time rather than you disguising another lump sum coming in. Also annual salary to see if the amount is within an aount you could likely afford. I agree some of it is overkill eg marriage cert, NI number, open banking (though you say statements only was an option).

The problem is there's no prescriptive rules on the level of checks needed for what amount, its left to the solicitor to determine what they think is reasonable for the particular case, as 6k may be a lot to some and less to others. I suspect some also just take the easy route of asking for everything and not having to think about what they really need. 

Exodi

I_would_rather_be_gardening said:

Thanks. I do not mind providing ID but I feel that asking for 6 months of statements or connecting via open banking was excessive, as was asking my annual salary, asking me to confirm any large deposits into the account and for my NI Number and marriage certificate.

i have been married over 30 years, lived at the same address for more than 20 and have a good credit score. 

But they're never going catch a money launderer if they don't look at bank statements or understand a person's earning ability or the reasons for any large deposits made into the account.

I totally understand "well if I was a money launderer, I'd just deposit the laundered money into my account 7 months before my conspirator applied for the mortgage" but this is a compromise - could you imagine the reaction if you were required to provide 10 years worth of bank statements? People already throw their toys out the pram over 6 months.

DullGreyGuy

The problem is that AML regulations are not prescriptive, they dont say that for under £x do A and between £x and £y do B etc. A trade body for accountants did previously say the MLR needed much more clarity but the HM Treasury pushed back saying the law was fit for purpose and they wouldn't be issuing additional guidance but would consider if additional scenarios could be added to existing joint guidance for accountants. 

If you look at the joint guidance for lawyers (Legal Sector Affinity Group anti-money laundering guidance for the legal sector) you'll see that "Source of Funds" and "Source of Wealth" such as collecting bank statements are the baseline activities to do. When you get into enhanced due diligence you're then checking beyond the statements. 

Lawyers by nature are risk adverse and so no surprise they'll apply the minimum standards to a £6k gift. 

MattMattMattUK

I_would_rather_be_gardening said:

Thanks. I do not mind providing ID but I feel that asking for 6 months of statements or connecting via open banking was excessive, as was asking my annual salary, asking me to confirm any large deposits into the account and for my NI Number and marriage certificate.

i have been married over 30 years, lived at the same address for more than 20 and have a good credit score. 

I had my own deposit and in the end after going further and further back the solicitor wanted five years of statements before they were willing to proceed. I suspect that some have been burned by breaching the AML rules in the past and so are overly cautious now. 

youth_leader

I'm sorry you are going through this.  I've also gifted my child some money and used a 'template' from the net declaring it as a gift,  in case I died in the meantime.  She has just let me know she and her partner are house viewing, so I'll get ready for the onslaught of ID/forms etc, thank you.

RHemmings

I found using those AML apps that I have to upload stuff to a nightmare. And, I didn't even have a mortgage. However, I perservered, with some entire evenings taken up by dealing with them. And, it worked out in the end. 

If solicitors don't do AML properly, there are significant risks to them if they get audited. And, it seems like quite a lot of the AML processes are farmed out to these apps. It's annoying, but I can't see the alternative. 

MattMattMattUK said:

I_would_rather_be_gardening said:

Thanks. I do not mind providing ID but I feel that asking for 6 months of statements or connecting via open banking was excessive, as was asking my annual salary, asking me to confirm any large deposits into the account and for my NI Number and marriage certificate.

i have been married over 30 years, lived at the same address for more than 20 and have a good credit score. 

I had my own deposit and in the end after going further and further back the solicitor wanted five years of statements before they were willing to proceed. I suspect that some have been burned by breaching the AML rules in the past and so are overly cautious now. 

For one of my bank accounts, I provided eight years of statements. I was asked for me, but eight years was all I could get from the bank.