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Gifted Deposits Explained: What UK Lenders Accept and How to Evidence the Funds
Family help with a deposit is now built into how a substantial share of UK property purchases happen — particularly in the South East, where saving a meaningful deposit on local salaries is genuinely difficult. The good news: lenders are well used to gifted deposits and most accept them without a fuss. The catch: the rules are stricter than many buyers expect, anti-money-laundering checks have tightened, and getting it wrong can stall your mortgage application at the worst possible moment. This guide covers exactly how gifted deposits work in 2026, what lenders require, and the practical steps to keep things smooth.
Quick Answer
Most UK lenders accept gifted deposits from immediate family — parents, grandparents, siblings. The gift must be unconditional (not a loan, no repayment expected), backed by a signed gifted deposit declaration, and the source of the funds must be evidenced for anti-money-laundering purposes. There is no immediate tax on the recipient, but inheritance tax can apply to the gifter under the seven-year rule.
What is a gifted deposit?
A gifted deposit is money given to a buyer to use toward their property purchase, with no expectation of repayment and no claim on the property. The “gifted” part is the legal distinction — it must genuinely be a gift, not a loan dressed up as one. Lenders care deeply about this distinction because a hidden loan would mean an undisclosed creditor with a potential claim on the property, which affects their security.
Gifted deposits are extremely common, particularly for first-time buyers. Industry estimates suggest more than 50% of first-time buyers in the UK now receive some form of family financial help to get onto the ladder. For lenders, this is normal — the question is whether it’s structured correctly.
Who can gift a deposit?
Lender policies vary, but the typical hierarchy of acceptance looks like this:
- Almost universally accepted: parents, step-parents, grandparents
- Widely accepted: siblings, step-siblings, adult children
- Often accepted: aunts, uncles, in-laws
- Sometimes accepted: spouses or partners (where one party is not on the mortgage)
- Restricted lenders only: friends, employers, non-family members
If your gifter falls outside the immediate family, your panel of available lenders shrinks. A whole-of-market broker can identify the lenders that fit your specific situation rather than wasting time on applications that will be declined.
Receiving a gift from someone outside immediate family? Lender criteria vary widely on this. We’ll identify the lenders that fit your specific situation and avoid wasted applications. Speak to an adviser →
The gifted deposit declaration
The gifted deposit declaration is the central document. It’s a signed statement from the gifter confirming four things:
- The funds are an unconditional gift, not a loan
- There is no expectation of repayment, in part or in full
- The gifter has no legal interest in the property and no right to occupy it
- The gifter has no claim on the property in the future
Most lenders provide their own template — your conveyancer or broker will share the right form. Your conveyancer will also keep a copy on the legal file because the declaration has implications for the title and the lender’s security.
The declaration usually needs to be signed in the presence of an independent witness, sometimes a solicitor. Some lenders ask the gifter to take independent legal advice confirming they understand they’re giving up any claim — this is more common where the gift is large or the relationship is unusual.
Anti-money-laundering: what lenders actually want to see
Since 2023, AML scrutiny on gifted deposits has tightened materially. Lenders and conveyancers are required to evidence the source of the funds, not just confirm they exist. Expect to provide:
- Identity verification for the gifter — passport or driving licence, plus proof of address
- Bank statements from the gifter’s account showing the funds, typically the last 3–6 months
- Source of funds explanation — where did the money come from? Savings built up over years, an inheritance, the sale of a property, a pension lump sum
- Source of wealth context — for larger gifts, lenders may ask about the gifter’s broader financial position
- Evidence of transfer — bank statements showing the funds arriving in your account before completion
This is where things can go wrong. If the gifter received a large lump sum into their account three weeks before gifting it to you and can’t easily evidence where it came from, the lender will keep asking until they can. Inherited cash or proceeds from a property sale need their own documentation trail.
Practical timing: when should the gift hit your account?
Most lenders want to see the gifted funds in your account before mortgage offer is issued, and certainly before completion. The cleanest approach:
- Apply for your mortgage with full disclosure of the gift (don’t try to hide it)
- Provide the signed declaration and gifter’s bank statements at application
- Once your mortgage offer is being prepared, the gifter transfers the funds to your account
- Your bank statements show the funds clearly, sitting alongside your own savings
- Your conveyancer pulls the deposit funds from your account on exchange day
Don’t have the gifter transfer funds directly to your conveyancer or estate agent — it complicates the audit trail. Funds should land in your account, sit there, and be transferred onward by you (via your conveyancer) at the right point.
Inheritance tax: the seven-year rule
Receiving a gifted deposit doesn’t trigger immediate tax for the recipient. There’s no UK gift tax. However, the gifter should be aware of inheritance tax implications:
- Each individual has an annual gifting allowance of £3,000 that’s immediately exempt from IHT
- Larger gifts are classed as “potentially exempt transfers” — they fall outside the gifter’s estate for IHT purposes only if the gifter survives at least seven years from the date of the gift
- If the gifter dies within seven years, the gift may be brought back into their estate and taxed (with taper relief reducing the rate after three years)
For larger gifts — particularly where the gifter is older or has health concerns — it’s worth taking professional tax advice. We’re not tax advisers, but we can flag the issues to consider and recommend qualified specialists where helpful.
Alternatives to a straight gift
If a straight gift doesn’t fit — perhaps because the family wants to retain some interest, or the buyer wants to keep the relationship more formal — there are alternatives:
- Joint Borrower Sole Proprietor (JBSP) mortgages — a parent goes on the mortgage to boost borrowing capacity, but isn’t on the title deeds. Useful where the buyer’s income alone isn’t sufficient.
- Family offset mortgages — family savings sit in a linked offset account, reducing the interest charged on the mortgage without the cash being given away outright.
- Family deposit mortgages (e.g. Barclays Springboard) — family money is held as security for a fixed period, after which it’s returned with interest.
- Loaned deposits — much rarer, only accepted by a small number of lenders, and the loan must be properly documented and disclosed in your affordability assessment.
These products have specific eligibility criteria and aren’t right for everyone. They’re worth considering if family help is on the table but a straight gift doesn’t suit the circumstances.
Common gifted deposit mistakes to avoid
- Trying to disguise a loan as a gift. Lenders verify intent through the declaration and underwriter scrutiny. If discovered later, the mortgage can be withdrawn or recalled.
- Late disclosure. Don’t wait until the lender asks. Disclose the gifted portion at application — it’s expected.
- Cash gifts. Never accept a gifted deposit in physical cash. The audit trail is critical and cash deposits will fail AML checks.
- Gifter unable to evidence funds. If your parents have £40k in cash from “various places”, that’s a problem. Get the funds into a single account well in advance with clear provenance.
- Cross-border complications. Gifts from overseas family need extra documentation. Start the conversation early.
- Last-minute gifts. Funds appearing in your account days before completion raise red flags. Plan for at least 4–6 weeks in your account.
Frequently asked questions
Who can gift a deposit for a UK mortgage?
Most lenders accept gifts from immediate family — parents, grandparents, siblings — and many also accept aunts, uncles, and in-laws. Gifts from non-family members or friends are accepted by a much smaller pool of lenders.
What is a gifted deposit declaration?
A signed statement from the gifter confirming the funds are a genuine gift (not a loan), there’s no expectation of repayment, and they have no claim on the property. Most lenders provide their own template.
Are gifted deposits taxable in the UK?
There’s no immediate tax on the recipient. The gifter may face inheritance tax on the gift if they die within seven years (subject to taper relief and the £3,000 annual exemption).
What evidence do lenders need for a gifted deposit?
The signed declaration, gifter’s ID, gifter’s bank statements showing the funds, and evidence of the funds arriving in your account. Larger gifts may need additional source-of-wealth evidence.
Can a gifted deposit come from overseas?
Yes, but this narrows your lender options. Expect additional anti-money-laundering documentation, including certified translations of bank statements where relevant. Specialist lenders are more comfortable with international gifts.
Get your gifted deposit application right first time
Lender criteria on gifted deposits vary widely — particularly when the gifter is outside immediate family or the funds come from overseas. We’ll match you to lenders that fit, brief your gifter on what evidence they’ll need, and keep the application moving. Free initial consultation, no upfront fees.
Whole-of-market · Based in Marlow, serving the UK
Related guides
Frequently asked questions
- Who can gift a deposit for a UK mortgage?
- Most UK lenders accept gifted deposits from immediate family — parents, grandparents, siblings, and sometimes aunts and uncles. A smaller number of lenders accept gifts from non-family members, partners, or friends, but these cases are restricted and may require additional underwriting. The gift must be unconditional, meaning the giver has no claim on the property and no expectation of repayment.
- What is a gifted deposit declaration?
- A gifted deposit declaration is a signed statement from the person giving the deposit confirming that the money is a genuine gift, not a loan, that they have no legal interest in the property, and that they have no right to repayment. Most UK lenders provide their own template. Your conveyancer will also typically need a copy for the legal file.
- Are gifted deposits taxable in the UK?
- There is no immediate tax on receiving a gifted deposit. However, if the gifter dies within seven years of making the gift, it may be subject to inheritance tax under the seven-year rule. Each individual has an annual gifting allowance of £3,000 that is exempt from IHT regardless. For larger gifts, professional tax advice is sensible — particularly if the giver is older or in poor health.
- What evidence do lenders need for a gifted deposit?
- Lenders typically need: (1) the signed gifted deposit declaration, (2) proof of the gifter's identity, (3) bank statements showing the source of the funds being gifted, and (4) evidence of the funds arriving in the buyer's account. The detail required varies by lender — some are light-touch, others require the full source-of-wealth trail. Anti-money-laundering rules apply throughout.
- Can a gifted deposit come from overseas?
- Yes, but this narrows your lender options significantly. Most high-street lenders accept gifts from UK-based family. Gifts from overseas require additional anti-money-laundering checks, certified translations of bank statements, and proof that the funds were generated legitimately. Specialist lenders are more comfortable with international gifts but may price slightly higher.
Gaurav Shukla
CEO · CeMAP DipFA
Gaurav has over a decade of experience spanning top brokerages, fintech startups, and wealth management firms. He specialises in high-value mortgages for professionals and athletes, bringing a strategic, client-first approach to every case.
A CeMAP and DipFA qualified adviser, he founded Home Me Mortgages with a simple goal: to make expert mortgage advice genuinely accessible across Berkshire, Buckinghamshire, and London. An avid football fan, you will often find Gaurav at local grounds taking in a game at the weekend.