Your conveyancing solicitor will ask to see proof of the funds you have earmarked for your deposit. They need to verify both the amount you have for the deposit and the source of these funds.
This is to comply with UK money laundering regulations. A solicitor cannot legally proceed with the sale of a property without sufficient proof of where the money has come from.
What is considered sufficient proof?
When your solicitor asks for the source of funds, they're asking that you to show how the money came into your possession. You can do this by providing some (or all) of the following:
Bank statements showing how savings were accumulated.
A letter from a relative to confirm that they have gifted you the money and evidence of how they themselves acquired it (such as a bank statement).
Evidence of an inheritance from the executors of a will.
Evidence of a property sale, specifically the statement of completion from a solicitor.
Pension records, including your bank statement showing the deposit from the pension company.
Sale of shares, including the shares release schedule and a statement showing the money being received.
Release of dividends from a UK company, including a copy of the dividend certificate, the company’s accounts and a statement showing the money being received.
Confirmation from a solicitor or court for a compensation payment or divorce settlement.
Sale of crypto currency. These will need to be sold prior to application, and the money evidenced with a bank statement, please also check with your solicitor that they are happy to consider this source of funds.
What if my deposit funds are coming from abroad?
If you are receiving money from abroad, your solicitor may decline the sale if the country where the money originates is considered high risk.
This is the case whether the funds are coming from your own overseas bank account or a gift from a relative living in a different country.
If you have any questions, reach out to your conveyancer.
