Cash gift from family for a deposit-complications?

[TinyDiamond]

Are there any complications with this? Any extra costs? An aunty is going to give us a deposit (she has had some inheritance I think).

I'm wondering if we will have to pay tax or anything on it? We are ftb and a bit clueless about all this. The amount will be under £18,000 and should give us about 10% to put down. Most likely it will end up being around 14-15k.

We have already got a mortgage in principle agreed, starting to book viewings for houses....what next? Presumably when we find one we will need the deposit cash actually in our account before we make an offer?

Any advice appreciated!

The mortgage company will ask where the deposit has come from if it is not your savings.
My BIL borrowed some money from my ILs for a deposit, and they had to say that is was NOT going to be paid back, and it was a gift.
If you have to pay it back, the mortgage company take it as a loan, and therefore will not lend you as much money.
My in laws had to prove where the money had come from to gift so much. They are retired, so that was easy enough as they don't have a lot of expenses ie mortgage etc and my fil has a frikkin massive pension

I guess you will be paying it back?

Oh, with regard the money, your aunty can pay it direct to the solicitor you will be using to purchase the house, you don't need it in your account. The agent should ask you how you will be funding the purchase, and in some cases as for proof. You just need to show the mortgage in principal, and explain about the further funding from your aunty, which they may also require proof of.

A mortgage in principal doesn't go into the whole ins and outs of where the deposit has come from, that will come when you actually apply for said mortgage, and depending on their final decision ie if they're happy where the deposit has come from, you will get a mortgage offer.

What poltergoose said. My solicitor has also asked this time for a bank statement confirming that (in our case our inlaws) had the money 6 months ago. Not sure why. Maybe they think most money launderers wouldn't wait 6 months?!?

oh gosh I guess this could be a problem then as she's still waiting for the money. apparently its coming soon though. so we'd have to wait 6 months? with it in her account? then she'd transfer it to us? silly me for thinking it would be so simple. it is a gift that at some point down the line we'd like to pay back although I can't really see it being possible within the next few years

Never been asked where my deposit came from. If gift is just to you it should attract capital gains tax but if to both- ie split, then it will fall under threshold. Best therefore to have the amount paid in two equal amounts into acct or to solicitor.

If she were to die within 8 years gift would attract inheritance tax if her overall estate goes over threshold.

We got 11k from my in-laws and no one ever asked anything about it.

I am sure that a copy of the will under which she benefited would be sufficient to satisfy enquiries, and avoid the 6 month wait.

There are gift allowances per year from a tax point of view so that is worth checking as I can't remember what they are. A way round is a letter stating that it is an interest free loan that is paid of by a gift each tax year of X amount. If you are a couple she can gift the amount to each of you each year.

It will not attract capital gains tax but will be a potentially exempt transfer for inheritance tax. This means if your aunt lives for more than 7 years from the date of the gift it will drop out if her estate for inheritance tax purposes. There are gift allowances of £3k per tax year and if you haven't used the previous years allowance it can be used also.

Sorry, too early! No cgt applicable, but gift issues do apply, and you can only carry forward for one year so I suspect lone cats advice is right.

From hmrc:

Annual exemption
You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.

My mil gave us 30,000k deposit. A box was ticked on our mortgage application to say it was a gift. Solicitor required a letter from her to say it was a gift and where it had come from. That was as complicated as it got and that was only 6 months ago.