What is a gifted deposit?
A gifted deposit is a lump sum of money that is given to someone to help them buy a house. The money is not a loan, and the giver does not expect to be repaid.
Why use a gifted deposit?
There are a few reasons why someone might use a gifted deposit to buy a house. For example, they might not have enough savings to put down a large deposit, or they might want to reduce their monthly mortgage payments.
How to write a gifted deposit letter
A gifted deposit letter is a document that the giver of the money signs to confirm that the money is a gift and that they do not expect to be repaid. The letter should include the following information:
- The name of the person giving the money
- The name of the person receiving the money
- The amount of the money
- A statement that the money is a gift
- A statement that the giver does not expect to be repaid
Which mortgage lenders accept gifted deposits?
Not all mortgage lenders accept gifted deposits. However, many of the major lenders do accept gifted deposits, so it is worth checking with your chosen lender to see if they will accept a gifted deposit from you. Some Lenders will also require the Giftor to supply a Declaration of Solvency, which is a legal document which must be sworn by a solicitor.
What are the tax implications of a gifted deposit?
In most cases, there are no tax implications for a gifted deposit. However, if the giver of the money is a higher rate taxpayer, they may have to pay a gift tax on the amount of the gift.
How can Winston Solicitors help?
If you are planning to buy a house with a gifted deposit, Winston Solicitors can help you with everything you need to know. We can help you write a gifted deposit letter, find a mortgage lender who will accept a gifted deposit, and more.
The current maximum amount that can be gifted without triggering a tax charge is £3,000 per year.
No, you do not need to get a solicitor to write a gifted deposit letter. However, a solicitor can help you to ensure that the letter is written correctly and that it meets the requirements of your mortgage lender.
If you do not use all of the gifted deposit to buy a house, you can keep the money. However, you will need to pay back any interest that has accrued on the money.