[UK] Mortgage - How to prove funds from savings

[brunetteUK]

Hi all!

I'm considering buying a flat sometime next year, so 18 months in the future and I'm trying to get my affairs in order. I'm considering a flat around £300k.

My questions is regarding the Anti-Money Laundering procedure that my future solicitor and bank will carry out. From my research, if I have money for a deposit, then it's their duty to identify the source of the money to ensure it's not Money Laundering.

My current situation is that I have around £30k in my investment account which was accumulated slowly month after month over the past decade. I can show the transactions for my salaries and from my current account to investment account so that should be fully traceable.

My concern is regarding a cash gift I have received from my granma and parents in a non-EU country. The cash, around £50k, is in an investment account in my name. my granma/parents do not live in the UK and so Inheritance Tax should not be an issue.

I'm having cold sweats thinking about explaining to a solicitor about the source of those funds. Obviously, all of it comes from legal, hard work from my family but any monies from Non-EU/USA/Japan is considered high risk due to less strict banking rules and I'd really like to avoid having to even mention another country or cash gift to my solicitor.
Getting statements from abroad, getting them translated, getting my parents to prove the source of their funds all sounds like a really big nightmare.

I would like my application to be a boring and uncomplicated as possible and I'm considering the following options:

A) Get a mortgage using my £30k deposit. Then make monthly transfer from abroad and use it to overpay mortgage.

B) Make transfers from abroad now so by the time I apply for a mortgage next year, the money would have been sitting in my account for over 12 months and it will look less like a "cash gift to fund property purchase". It may raise less questions if I transferred money from my account abroad to my account here such a long time ago.

C) Get my parents to pay for my Amex credit card. My dad worked in the UK some time ago and has a bank account here. He could transfer the money from his account abroad to his account here and then pay my Amex. This way there is no foreign money coming into my current account, it's fully traceable from Dad Abroad to Dad UK. This way he is paying my bills and it doesn't look like he is giving me money for a house purchase - and I save my money obvs. Surely, it is a fairly ok scenario to be daddy dependant to pay your card for a while, no?

Please let me know if you have any opinion or insight, I'm not trying to dogde any legal obligations, I just want to get my situation in order so there are as few as possible red flags and complications.

Thanks!

[worms]

BrunetteUK,

I’m afraid I have no answer for you, but wanted to bump your query in the hope that someone more knowledgeable might happen by.

Given the large number of properties in London that are apparently owned by overseas investors and Russian oligarchs, it doesn’t look as if the anti money-laundering rules are really hitting the intended targets!

I wonder if the best approach would simply be to discuss it with your solicitor in the first instance and see if they can suggest a solution? 

Alternatively, I wonder if you are over-thinking this and it would be sufficient to show a transfer of money which is already in your own name, from your previous country across to your UK bank account?  That’s one to discuss with your bank, as the same money-laundering checks would be carried out on the transfer to UK.

As I say, I hope someone more knowledgeable is around! 🙂

[Kwill]

I also think you're overthinking this. Disguising the money as money from your father to pay off your credit card seems like the worst option because it is actually close to money laundering. If you do something that is deceptive or complicated when you can just do things straightforwardly, it will only introduce potential problems that don't have to be there.

If the money is already in your name in the foreign country, then you should be able to show statements from that account. If you're concerned, then bringing the money over sooner may be a good idea. Check on how long a paper trail is wanted, but I think in my case it was only a year, maybe even only three months. They are just ticking boxes that all the documentation is in order, and they probably won't care to see a whole decade's worth of bank statements. You may also be asked questions by Transferwise or whatever you use to bring the money over to the UK, but you should be able to also answer those simply and truthfully.

That said, I'm no expert, and a solicitor specialising in this would have more information.

[Playing with Fire UK]

When I applied for a mortgage/house purchase they only wanted three months' statements. If it had been in the account for over three months they were happy that it was mine and from savings.

Also, it can be argued that if you've had the £50k in your account for a year, during which time more than £50k has gone in and out of the account, that in fact all of the money in the account is from income/savings, because the original £50k has been spent already.

So bring it over sooner rather than later, but it'll probably be far easier than you are thinking.

I assume the cash is actually a gift rather than a parental loan right? If it's a loan with conditions it can be trickier.

[brunetteUK]

Thank you @worms for bumping up my question!

I do think I'm overthinking this. It's somewhat related to some bad experiences I've had with "being a foreigner from Dodgy Sounding Country" so I would rather not expose myself to that again but again, I'm not dodgy!! So acting not dogdy is the best approach.

If you do something that is deceptive or complicated when you can just do things straightforwardly, it will only introduce potential problems that don't have to be there.

Precisely what I needed to hear @Kwill , thanks! I am not doing anything wrong so let's keep it straight forward.

When I applied for a mortgage/house purchase they only wanted three months' statements. If it had been in the account for over three months they were happy that it was mine and from savings.

Also, it can be argued that if you've had the £50k in your account for a year, during which time more than £50k has gone in and out of the account, that in fact all of the money in the account is from income/savings, because the original £50k has been spent already.

So bring it over sooner rather than later, but it'll probably be far easier than you are thinking.

I assume the cash is actually a gift rather than a parental loan right? If it's a loan with conditions it can be trickier.

Hi @Playing with Fire UK ! It's a gift and it has been sitting in an account in my name in a foreign country for many months. If worse comes to worse and I need to prove that my parents have enought cash to survive without that money (it anyone think it's a gift), then it could be done too. I just would really rather not have to get documents from a bank abroad and then get it translated etc etc...

I will follow the general advice and get it transferred here sooner rather than later in a few instalments and just have it as part of my savings.

Thanks everyone!