Gifted deposit rules in 2008

[Gifteddeposit2008]

Name changed as this involves some family drama.

My father loaned my sibling a six figure sum of money towards a house purchase in 2008. My sibling has been asked on multiple occasions to repay this money but has refused.

Due to this, my father last year gifted me a much smaller amount towards a house purchase.

It has now dawned on my father that the two transactions were completely different:

• In 2008 my sibling pressured him for and received the money directly into his own bank account several months before the purchase was completed and my father never signed anything nor had to undergo any identity checks.

• Last year my father had to jump through almost as many hoops as me to prove his identity plus provide bank statements and sign a form confirming the money was a gift.

I know the money laundering rules have been tightened up since, but I was wondering just how loose they were in 2008 and whether you could use a six figure sum that had only arrived in your bank account a few months prior without triggering any checks?

My suspicion is that my sibling used the money to clear debts (possibly to enable a big enough mortgage) rather than as a deposit, hence the inability to remortgage and repay at a later date that my father was expecting.

There were no real checks other than the solicitors normal money laundering checks. It isn’t money laundering or POCA so nobody would have cared really.

Pretty much no checks at all apart from proving who you were in 2008. We moved in 2007 & my dad gave us £20,000 to help us move to a nicer property. It landed in my bank account the day before we exchanged - no questions were asked by either the bank or the solicitor about where the money had come from. All the checks they do now are a result of the 2008 crash - it was very different prior to this.

I had to move some quite large sums of money (thousands to tens of thousands) between my own accounts in late 2008, and I remember being asked some quite searching questions each time by the bank, so there was scrutiny then.

The AML regulations were significantly tightened in 2017, in line with the EU (at the time). Prior to that, it was much more lax particularly in property transactions.

There might be an element of timing to this. We had a (much smaller) gift from other half’s mum which she transferred in about six months before we ended up buying. The legal ask was three months of bank statements and they never questioned the history of why we had 50k sat in an account. We had shown money regularly going into the account (salary, small savings etc) and that satisfied them. This was 2019/20. It might be your brother if he had the money in his account for a long period of time didn’t trigger any questions.

My husband put his half of our house deposit on a credit card when we first bought together in 2005 - no one gave a shit.

Thanks for the replies. Some regulations came in in December 2007 but I am struggling to find out what these actually were as they were subsequently revoked by the 2017 regs, hence asking for people's recollections. It would be approx £200k in today's money and in the bank account for 3 months max, though perhaps as you say @DavidPeckham that would've been long enough to avoid checks (though I doubt there was much history of saving!)

It’s funny, no one ever mentions this when we talk about how much harder it is to buy a house now.

i know someone with a decent level job at the BBC, who bought his house twenty or so years ago. He didn’t have a deposit so took out a bank loan and used that! Be has now done really well for himself, massive house, never missed the mortgage etc

If your father has written evidence it was a loan then presumably he could look into recovering it by way of eventually putting a charge against the property.