Despite the recent impact of inflation and rising energy prices, most households are spending significantly less on food and entertainment.
However, this has not stopped people from buying houses in the UK.
According to the British policy, the money used to purchase real estate needs to prove to banks and institutions that the source of funds must be legal.
Proving your source of funds is essential, and getting it wrong can lead to delays, further investigation, and possibly even the inability of your lawyer to proceed.
Basic Proof of Buying a Property
Provide photo ID and proof of address Provide proof of source of required funds
AML you need to know before buying a property
Anti-money laudering (AML) is a set of laws, rules and procedures designed to prevent any improper means of obtaining a source of funds.
Businesses and individuals need to register with regulators to comply with AML before purchasing assets.
You will usually be asked to provide identification, such as passports and official government-issued documents.
Any source of funds will be subject to AML to prove that your source of funds is in compliance with legal process.
Proof of source of funds when you buying a property
You will need to provide the source of funds to the bank to further review the initial source of your funds. Different funds will be required to provide different materials:
- Proceeds from the sale of the house: It is necessary to show the purchase contract and other related information to prove that the funds came from the sale of the house.
- Income from stocks, funds and other investment financial products: Proofs such as delivery statements are required.
- Income from bank deposits: You need to present bank deposit certificates and statements (preferably six months and above), etc.
- Superannuation income: A copy of the superannuation statement and a copy of the bank account statement is required to prove that the funds were obtained from the superannuation agency.
- Estate income: A copy of the executor’s letter stating the funds you received as a beneficiary. A copy of the bank statement stating that the funds came from the attorney/executor’s bank account.
Funds are donated by relatives
Funds donated by relatives: It is necessary to provide proof that the funds were donated by relatives and that the source of funds was obtained through legal means.
Most importantly, a gift agreement needs to be signed, stating the source of funds and kinship.
The gift agreement also states that the funds do not need to be repaid and bear no interest.
It is also necessary to specify that the real estate obtained from the gift funds does not enjoy any interest relationship.
Proof of full purchase capital
Once the full amount of funds to buy a house is transferred to the bank account, the bank has the right to conduct an AML audit on the funds in your account.
Since different banks have different standards for AML audits, they may be required by banks to provide relevant materials to prove legal sources.
Since every customer has a different situation, this does not cover all customer responses. Therefore, if you have any other questions, please consult our professional team.
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