Why is our solicitor so unreasonable and intrusive?

[Alexiaa]

Hello,

I think I'm posting in a wrong section but I really need as many answers as possible.. So... Me and my partner are buying a house in Scotland. Offer accepted, mortgage offer received, purchase should be completed after 5 days. However… Last Friday our solicitor asked for bank statements showing the money with which we will fund our purchase. We sent them to him, and now he is having a problem with a credit to my account made at the end of July. The credit is 2500 pounds. This money originally came from my partner’s uncle who lives in the USA. So the uncle sent the dollars to my partner’s brother, my partner’s brother then sent it to my partner, my partner converted dollars to pounds and then sent them to me. Here are my questions:

1. The dollars were originally a birthday gift for my partner; after receiving it we went on holiday and spent about 2000 pounds already, so just a small portion of this money is now left. We can very easily fund our purchase even without the uncle’s money because we have nearly a six-figure sum in savings. We have explained everything to our solicitor, we said like ‘we have lots of savings, these couple thousands do not even matter, we were never going to fund our purchase with it, it was for holidays…’ but the solicitor kind of refused to hear it and asked to see my partner’s bank statement showing him sending the money to me and his brother sending the money to him. He also asked to see brother’s bank statement and requested that his brother signed a gifting paper. Also, the solicitor was even upset as to 'why we waited until the last minute to inform him about receiving any gifts.' But it has nothing to do with the purchase, come on... :(

1. My partner’s brother provided his bank statement and signed gifting papers; what would have happened if he had point blank refused? Also, he originally received the money from the uncle living in the USA, so will the uncle have to sign gifting papers even though he never sent anything to my partner directly? Is this money legally a gift from the uncle or from my partner’s brother? Tomorrow is Monday, so the solicitor will be open and we don't know what to expect.

1. Our completion date is September 9th and the uncle is not in the USA at the moment, so he cannot go to a lawyer there and sign anything; he is flying back home only September 25th. What will happen if we are asked to provide any documents from the uncle but are unable to? The uncle is old and has never used any online banking, he just has a couple cards; if he wants statements, he must go to a branch to get them printed, and now it is impossible of course.

Money laundering. They can go to jail for 7 years not to mention be struck off if they don’t carry out the proper checks and there is money laundering going on!

No you don't become money launderers but just as in this case there will be paperwork completed to show this is the case.

Agreed, this is all standard, and a requirement of law and professional code. But! The solicitor should not have left it so late to ask for this.

I've definitely used "middle men" to send money to people when I CBA to find/have misplaced my card reader, as if I don't have them as a payee I can't send without using the reader, so if we have someone in common who has sent money to them before and has their bank details, I will just send it to that person and let them send it on.

Would have been easier to just give American relative your bank details though, or give partner's brother your bank details.

Your solicitor is doing her or his job. It's in relation to anti-money laundering.

Moving money from account to account in quick succession is. Red flag for the second stage of money laundering, called layering. The solicitor is obliged to look into it.

Massive alarm bells ringing here. I am a solicitor and one of the compliance team. I'd be being "intrusive" here too.

I'd also want evidence of where your own six figure savings came from.

You're being ridiculous @Alexiaa . No-one is calling you a money launderer. Your solicitor is legal bound to ensure you are NOT money laundering. Moving money around is a classic thing that money launderers do. For example....

Money comes in from drug selling or human trafficking (for example). It's 'dirty money' (come from illegal sources - drug or people selling). So the money is moved to someone else's account. Who moves it again and so on. Somewhere way down the line someone uses the money to buy a car. Three months later they sell the car. The money is now clean (laundered) and will be moved back to the originating person so their money now looks legitimate. But the original money was dirty. That's money laundering. And most money launderers are much more sophisticated than that. But moving money from one account to another muddies the trail and that's what money launderers do. You surely would like a person who sold drugs or trafficked a person to be caught? Well, following the money back is one way of doing that.

So if you make a large purchase - like a house or pay all cash for a brand new car - there will always be questions about where the money comes from. Your solicitor doesn't know if the uncle has brought people into the country to used and abused or made his money legitimately as a builder (for example). All he or she knows is there is money being moved about and you need to prove where it came from. Think of it as protecting the innocent.

If you had produced a savings account with regular payments into it from your own bank account and that bank account showed the money coming in from your employer and you paying it out to the saving account, the solicitor would have been fine. Legitimate pattern of money in and out of an account into one other account.

The fact that it was looped from one account to another then another then another looks like you're trying to 'lose' dodgy dealings. A solicitor would have to ask for proof that the original payment was 'clean and above board' (i.e. from the uncle account and legitimately his to give away). That's all.

No one cares if the uncle leaves his property to someone or gives your partner a share of money every year. But you wanted to use it to make a large purchase and that's typical money laundering behaviour (as well as quite legitimate behaviour). Your solicitor's job is to ensure it's the latter rather than your uncle or partner having got it from sources like drugs or human trafficking.

I think people are right re money laundering alerts. For a relatively small amount it does seem to have done the rounds of bank accounts. I don't think your solicotor is just beig awkward just following the guidelines

I'm just wondering what kind of person sends thousands of quid regularly (from the sound of it) to the UK in cash, to be distributed and change hands a few times. Why doesn't he just do it electronically? Much less risky and less dodgy-looking too.

Here in the UK there's a limit on how much you can give as a tax-free gift each year. It's generally £3k — or it was the last time I checked. Is there anything similar in the US? Is that why he sends cash? If so you and your boyfriend's family are involved in tax fraud.

Calm down, as long as you can confirm validity there is no issue. Why the drama because you need to confirm the chain and reason.

uResidential conveyancing is a hot area that attracts particular anti-money laundering scrutiny so your solicitor is just doing their job.

Perhaps you can explain to the solicitor the money trail and why it is set up like that and ask the solicitor give you examples of what evidence they require of the source of funds. They would probably want to understand your uncle's source of wealth. He is likely to need to provide some form of his ID.

The important thing is to be open with the solicitor. You have explanations of your uncle's source of wealth and the way payments are routed in this way, so it is just a question of providing the solicitor with enough evidence to get comfortable and enough paperwork to demonstrate they have done their due diligence.

It is a faff but believe me, the solicitor is not trying to be difficult. A co-operative client makes things go faster and gives comfort. Just to let you know, reluctance to provide know-your-client evidence is a money laundering red flag so engage with the process (I am sure you will). If you cannot provide any evidence, explain why and suggest an alternative. You and your uncle have done nothing wrong.

It will be fine, hth.

OP, can you ask your solicitor if you can do something like a Statutory Declaration to state where the money has come from. As it's a small amount under question surely that would be okay.

I review for a health organisation. For various reasons they pay £12.50 for a completed piece of work. In order to claim it, people are expected to provide a copy of their passport and to book a verification appt. in which they a senior person (who authorised the expenditure) sees you in person with your passport (no travel expenses paid) or a video call in which you hold your passport and then zoom on bits of it on the camera on request.

That process of identity verification is that organisation's version of AML.

It's also pretty effective in making sure it's pretty much not worth most people's time to go through that process (on top of the ludicrously complex claim procedure).

Which state is the uncle living in that he can afford £2500 gifts to a nephew on a regular basis from his SSI payments? That would absolutely not be affordable on this state where I live. So which state is it? I may need to move when I retire…

A solicitor is required to check the source of your funds for the purchase, as part of their anti-money laundering obligations. I am not surprised they wanted to check out the reasons behind all the faffing around. They aren't being intrusive - they have to do it.

Now you are just being silly!

it is raising a red flag because you are buying a house. Your solicitor isn’t accusing you of money laundering- he is doing his job.

poor solicitor!

Money laundering regulations mean they have to ask these questions, and I suspect it's been triggered by your large cash deposit from savings which has then caused them to look at individual large transactions and have picked up the dollar transaction.

The bonkers unusual way you've moved this through accounts has then given them further pause for thought. Just reading you posts to this thread is enough to arouse suspicions.

Normally it's much more straightforward. Most deposits come from equity from a matching property sale, or they're usually much smaller amounts for FTB, and they don't have strange transactions involving foreign deposits bouncing through multiple accounts.

(no one here is saying you're actually laundering cash, we're just thinking that the entire family has got a crazy way of managing these gifts that couldn't be designed any better if the intention was to arouse suspicions)

Your Scottish solicitor has no choice. S/he is obliged by law to prevent money laundering and ID fraud by checking clients ID and demanding to see proofs of the source of their assets. Failure to do so would cost the lawyer their career.

My Scottish lawyer has known and worked for me for years doing multiple conveyances, and she still has to do all the above . Every single time, I have to show her my passport (again) to show I am me. I have to show my business and asset accounts (again) to show where the money came from.

It is relatively new to be asked so much but not the solicitor's fault. My daughter just repaid some mortgage - not very large sums but a few over a period and the constant questions from her mortgage company have been very annoying. Each time they ask where is the money from. Funnily enough when I repay sums on my mortgage with a different lender they have not asked me source of funds once (and my source is just my earnings).

In the case here on the thread the lender needs details of gifts and usually the solicitor asks right at the start is any of this money a gift - that has heppened when I have helped my children buy a first property and I have signed things like Virgin Money's standard gift form making it clear I have no interest over the property despite the gift and things like that. It sounds like this is all along similar lines.

It is very normal for one family member to senda gift to one who then sends it to others and perfectly lawful but you would need to explain it. Often the very kin d person making the gift only wants to do one transfer and if you make them do 10 to each family member they might not even make the gift at all! Similarly when my father died and his pension went to 4 heirs monthly I tried to get the pension companies to pay in quarters - two would and 2 would not which certainly did make it complicated - I received the whole thing for those two and then had to give 3/4 away each month by standing order but as people had different tax rates we needed very good records for HMRC purposes.

It’s $16,000 here (annual exclusion on gift tax). If he’s sending £2500 per niece and nephew but sending it in one payment I’m guessing it could amount to more than $16k (we don’t know how many nieces and nephews are involved but I’ve counted at least 4).

That still makes me wonder how anyone on SSI here can afford to make such generous gifts.

Unreasonable and intrusive, such drama over a solicitor doing their job!

Honestly even if you don't know the ML regulations, all you've got to say is why do you need to know and the solicitor will explain. I'm glad you're not my client.

Thank you, BritWife: interesting to know. So it could be what we over here would call deliberate deprivation of assets in order to keep his savings/ income/ estate low so that he can claim SSI. Sounds as if the solicitor is on to something, which could explain the OP's indignation at having to be open about her finances.

It is justified to feel that questions on source of wealth and source of funds are intrusive. As Xenia says, this requirement only tightened up in the last few years even in the UK. It is not just enough to show you have the money but also demonstrate it came from a legitimate source. The ML regulations are a real pain for the solicitor and the client so I understand. But the alternative is to fund facilitate Putin's cronies and criminal and terrorist activities generally, so it is all for a good cause.

If you can, have a chat with your solicitor - the residential conveyancing process is so conveyor belt these days - but I find a call helps to explain things and smooth what is needed from you and why.

It’s hilarious that OP is now being arsey about this. Your partner’s brother gets an unspecified amount of money several times a year. Erm, was it maybe right below the limit that triggers the US for money laundering each time? Then your partner gets an amount - £2500. Erm, it’s right below the amount that people can receive in tax free gifts per year, which is £3000. And you say this uncle gives him gifts several times a year - “family birthdays,” “holidays,” etc. So why did it go to your account this time? Would it have put him over the £3000 limit? If your DP added up everything he received from his uncle in a year, would it be over £3000? Hope he put that on his taxes. No wonder your solicitor thinks the whole thing fairly reeks. Pull the other one; it’s got bells on it.

If you honest to God didn’t understand about any of this, OP, I really do feel badly for you, and you better learn fast. The US is an absolute arsehole about its money. The entire world has been cowed by their money-laundering regulations. They will track it all over the world, and about the worst thing you can possibly do is have some random uncle who just has a pension and is on disability (?????) yet can afford to send you huge chunks of dollars from the US. It makes no sense. They’ve probably flagged DP’s brother’s account long before now.