Source of funds - Gift from parent not for property

[Lunamoon07]

Hello all,

My father transferred 5k gift to my bank in January to pay for a family holiday. I've used £800 for the holiday deposit and the rest is in my current account ready to settle the balance in a few months.

We are due to exchange soon on a property that we offered on last year. I didn't think at the time that the money would be an issue as its for a holiday not towards a deposit. We have seperate funds to cover all costs involved in our sale and purchase.

Our solicitor has sent a link for us to complete source of funds check and asked that we declare all gifts and to make sure we have informed our lender of any gifted funds as they will also declare. We never declared it when doing our mortgage as 1. We didn't know until last month we would be receiving it and 2. It's not for our property purchase. Is this going to be an issue? My Dad is late 70s I'm worried he's going to have to complete all sorts of paperwork and checks due to this. Can I just transfer the full amount back to his account or is it too late?

Don’t transfer it back, that’s a red flag for money laundering. You will have 6 months of statements so you will be able to demonstrate that you already had the deposit money and where it came from. Your dad might have to write a letter (that’s just ‘might’ - mine didn’t, see below). It’s the solicitor you need to satisfy as it’s them that have to be sure of your funding source.

My dad paid 5k into my bank just before we were due to send the deposits off. He meant it to be a nice surprise so we could buy carpet etc. It’s far to say I was very stressed about it and worried how it would affect our proof of funds, but we were able to demonstrate we already had the deposit before this gift was given.