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Before You ApplyEducational mortgage-readiness preparation

Deposit & LTV · 7 min read

Using a gifted deposit for a mortgage? Get the paperwork clear early

In short

In a mortgage context, a lender may treat money towards a deposit differently depending on whether it is a gift that does not have to be repaid or a loan or contribution with conditions attached. Exactly how any gift is treated, and what paperwork is asked for, is set by each lender's own policy and by the checks your conveyancer or estate agent has to carry out. Separately, GOV.UK guidance for buyers in England and Wales says you may be asked for information on the source of your funds, including financial gifts from family and friends.

What this guide cannot tell you

  • Whether a lender will accept a gift from your particular donor, or accept your application.
  • How any specific lender or conveyancer will treat your circumstances or your paperwork.
  • Whether the gift has tax consequences for you or for the person giving it. We do not provide tax advice.
  • Whether now is the right time to apply.
  • What we can do is help you understand and organise the facts, so the conversation with a suitably qualified FCA-authorised mortgage adviser, and with your solicitor or conveyancer, starts from something written down.

Who this is for

  • Buyers whose deposit includes money from a family member or friend
  • People planning to give money and wanting to understand what may be asked of them
  • Anyone whose deposit is coming from more than one source

Five things to settle before anyone asks you

Most gifted-deposit friction comes from questions nobody had answered yet. These are facts about your own arrangement, written down early.

Who is giving the money?

  • The donor's full name, and their relationship to you, stated plainly.
  • Whether more than one person is giving money, and who is giving what.
  • Relationship can matter to a lender's own policy. We do not publish categories of acceptable donor, and we cannot rank relationships.

How much is it?

  • The amount, and whether it is all or part of your deposit.
  • What the rest of the deposit is, and where each part comes from.

Where is it coming from?

  • Where the money is held now, and the donor's own factual account of where it came from.
  • GOV.UK guidance for buyers in England and Wales says you may be asked for information on the source of your funds, including financial gifts from family and friends.
  • Donor identification and records may be requested. We do not state a required number of months of statements, because our sources do not set one.

Is it a gift or a loan?

  • Whether it has to be repaid, and whether anything is expected in return.
  • Whether the donor expects any interest in the property, or intends to live in it.
  • A gift and a loan are different things to a lender. Settle which it is in writing with the donor before the forms arrive.

Are there conditions?

  • Anything agreed about timing, use of the money, or what happens if the purchase does not proceed.
  • Whether the donor has taken their own advice, if the sum is significant to them.

Facts only. This lists facts worth having ready. It is not a list of acceptable answers, and none of these lines tells you how any lender will treat a gift.

Key points

Could a gifted deposit have Inheritance Tax implications?

Possibly, and it is a question for a tax adviser or solicitor rather than for us — we give no tax advice. GOV.UK's Inheritance Tax guidance explains that UK rules include a number of exemptions and a seven-year rule that can apply to certain lifetime gifts. Whether any of that is relevant to a particular gift depends on the donor's own circumstances, other gifts they have made and their estate, so no general statement here tells you the outcome for your gift.

Gift or loan is a question of lender policy

Whether money is repayable, or comes with conditions, can matter to a lender. How each lender treats it is written in that lender's own criteria, so the answer comes from the lender or your adviser rather than from a general rule.

Source of funds is a defined idea

HMRC supervisory material describes source of funds as the origin of the money used in a particular transaction, while source of wealth is broader and covers how someone's assets built up over time. Gifts can feature in either question.

A declaration may be requested

MoneyHelper notes that the documents requested vary, and that where part of a deposit is a gift a gifted deposit declaration can be among the documents commonly asked for. Your lender or broker confirms what they actually need.

Named lender examples, not national rules

Nationwide publishes its own gifted deposit form asking the donor for identity and contact details, their relationship to the applicant, whether they will live at the property, the amount and where the funds come from. Santander's published material asks for donor details, relationship, occupation, amount, how the funds were generated, the country the funds come from, confirmation that the gift is not repayable, and confirmations about ownership, residence and legal interest. These are those two lenders' current requirements only, and they show that requirements differ.

Why the question comes up at all

HMRC anti-money-laundering guidance for estate agency businesses lists a gifted deposit among the things a supervised firm may consider when establishing source of funds or source of wealth. That is a duty on firms, not a checklist for you, but it explains why you may be asked.

Exceptions and things that vary

  • Lender requirements are policy, not law, and differ between lenders. Nationwide's criteria state that a gifted deposit is acceptable where no conditions are attached to the gift, subject to its own stated exception, and set out its own evidence expectations, including additional evidence for some overseas donors. Santander's criteria address matters such as a donor who will live in the property, beneficial interest, and funds coming from overseas. Neither set tells you what any other lender does.
  • Published criteria can change at any time, so treat any example here as something to confirm rather than rely on.
  • In Scotland the conveyancing process differs. The Law Society of Scotland has said anti-money-laundering requirements, including checks on source of funds and wealth, are a significant issue for the Scottish legal sector; beyond that, ask your Scottish solicitor what they will need.
  • Tax is outside what we cover. GOV.UK's Inheritance Tax guidance explains that cash counts as a gift and that some lifetime gifts can be relevant to Inheritance Tax if the person who gave the money dies within seven years, depending on exemptions, the relationship, the amount and the timing. Whether that affects any particular gift is a question for a tax adviser or solicitor.

How to work through it

  1. Write down what is actually being agreed

    Note who is giving money, how much, and whether anything is expected in return. Having this clear in your own words makes later questions easier to answer.

  2. Ask the lender or adviser what they require

    Because the paperwork is lender-specific, ask what form or declaration applies to your case rather than assuming a standard letter exists.

  3. Ask your conveyancer what they need separately

    Your conveyancer carries out their own client and source-of-funds checks. Those questions can differ from the lender's.

  4. Keep the money traceable

    Records that show where the money came from, and a transfer that can be followed, make it easier to answer questions if they are asked.

Illustrative example (not a real case)

Imagine a buyer whose deposit includes £15,000 from a parent. They ask their adviser which gifted deposit form the lender uses, ask their conveyancer separately what that firm needs, and keep the parent's own records of where the money came from. Nothing here says what any lender would decide. Illustrative process only.

Illustrative only. Figures and situations in examples are made up to show a method. They are not typical, not a benchmark and not a prediction of any outcome.

What not to assume

  • Do not assume there is one national gift letter or one set of required wording.
  • Do not assume any particular relationship between giver and buyer is universally acceptable, or that relationships can be ranked. Relationship can matter to a lender's own policy, and that is where the answer comes from.
  • Do not assume a gift will be treated the same way by two different lenders.
  • Do not assume paperwork affects whether an application succeeds, or how quickly it is dealt with. We make no claim either way.
  • Do not assume tax questions are covered by mortgage preparation, or that a gift has no tax consequences for anyone.
  • Do not try to make a gift look like your own savings. Moving money early so that it appears in your account as though you had saved it — sometimes called 'seasoning' — misdescribes where the money came from. A lender or conveyancer asking about source of funds is asking a factual question, and answering it inaccurately is a serious matter for you and for the person who gave the money. Moving money earlier does not justify describing its origin as anything other than what it was: when you are asked about source of funds, describe the history accurately.

Your gifted deposit preparation note

One page, agreed with the person giving the money before anyone is asked anything. It is much easier to write now than to reconstruct later.

  • Who is giving the money: full name, and their relationship to you.
  • How much, and whether it is the whole deposit or part of it.
  • Where the money is held now, and where it came from — in the donor's own words, as a fact.
  • Whether it is a gift that does not have to be repaid, or a loan or contribution with conditions — stated plainly, one way or the other.
  • Whether the donor will live in the property, or expects any interest in it.
  • The dates: when it was agreed, and when it will be transferred.
  • Which forms have been asked for, by the lender and separately by the conveyancer, and their status.

Keep the donor's own records with it. If the answer to any line is 'we have not decided', that is the useful thing to settle before the paperwork arrives.

Questions for a qualified adviser

We cannot answer these for you, and we do not introduce or recommend advisers. Take them to a suitably qualified FCA-authorised mortgage adviser of your own choosing.

  • What does this lender require from the person giving the money, and in what form?
  • Does this lender treat the gift differently because of who is giving it, or where the money is held?
  • Does anything change if the person giving the money will live in the property?
  • Is there anything about this gift I should raise with a tax adviser or solicitor?

Questions for a solicitor or conveyancer

These are separate from the mortgage conversation. Your solicitor or conveyancer carries out their own checks and we cannot answer for them.

  • What will you need from me and from the person giving the money for your own source-of-funds checks?
  • What identification and records do you need from the donor, and in what form?
  • How would you like the gift documented for your file, separately from the lender's form?
  • Is there anything about this gift you would want me to take to a tax adviser?

Check my readiness

Eight broad preparation questions. No figures, no personal details, no eligibility result.

Check my readiness

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Sources

No statistic, regulator citation or third-party claim is published until its source is verified. Unverified entries are shown as placeholders.

Written by

Before You Apply editorial

Written by the publisher's editorial function, not by a named individual and not by a mortgage adviser. Before You Apply is not FCA authorised.

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Independent reviewer — to be appointed

No independent reviewer has been appointed yet. No review, qualification, FCA status or endorsement is claimed for this content.

  • Last fact-checked 2026-08-21
  • Not yet independently reviewed
  • Next review due 2027-02-21

Disclosure: this guide is educational. Before You Apply receives no payment for mentioning any lender, product or firm, and none are named.

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