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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 9032
Experience:  I have been practising for 30 years.
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We want to give my sister in law money to enable to buy a

Resolved Question:

we want to give my sister in law money to enable to buy a house, she has 90% deposit but cannot get a mortgage.
We are being told by her solicitor that we need to get independent legal advice, and also provide a letter stating that we have obtained advice.
We understand that there are IHT consequnces to giving her the funds. We understand that giving her the money (20k) does not give us any rights over the property. We have the funds in our account waiting.
Can you assist in anything else that we should conciser? Can we transfer the money straight to my sister in law?
Submitted: 8 months ago.
Category: Law
Customer: replied 8 months ago.
Also, is there a template letter that we can use? Does this have to be witnessed? Do we have to provide ID to my sister in law's solicitor
Expert:  F E Smith replied 8 months ago.

This is probably going to be the other way round than you have put it.

You are supplying the deposit and she is supplying the balance of the purchase price.

I don’t know whether you are giving her a gift or whether it’s meant to be repaid but if you are giving her a gift, then provided you live for seven years after making the gift, the gift is removed from your estate for inheritance tax purposes.

You can have rights over the property if you wish, it depends whether you want that. If you want to be repaid when the property is sold, then you can have a second charge over the property which means that you would get paid whenever the property was sold or remortgaged.

There is a standard form for that available from the land registry CH1 which the solicitor would complete and ask you to sign.

You may be asked to provide ID and proof of residence to the sister-in-law solicitor and also, proof of where the money is coming from. That is for anti-money laundering purposes. It is not the solicitor being difficult, it is to stop the solicitor getting to trouble for handling money which is coming from a third party other than a normal lender.

You don’t have to take independent legal advice and the solicitor cannot insist that you do. Ultimately, you are free to give this money to your sister-in-law and she gives it to the solicitor and the solicitor then satisfies himself as to the source of the funds.

Can I clarify anything for you?

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We can still exchange emails. Best wishes.


Customer: replied 8 months ago.
Thanks for confirming that we do not have to take full legal advice- your advice is sufficient for us. Sounds like her solicitor is making this so much more complicated than it needs to be..... I confirm that we do wish to take any charge over the property, nor do we expect repayment.I am planning to provide a letter confirming the gift, proof of the funds, and certified copies of our passports (we know loads of Doctors who can certify them), should this be sufficient?Does the letter confirming the gift need to be witnessed?Thanks
Expert:  F E Smith replied 8 months ago.

The solicitor may ask you to sign something which confirms that you have been advised to take independent legal advice but declined to do so. That is not unusual.

What you are proposing to do simply by way of letter should be perfectly adequate for the purposes. If you call into the solicitors with your passports, he could take copies of them if he wishes.

Any document is better witnessed because then it’s more difficult for someone to allege that they were pressured into signing it but it doesn’t need to be and that really is a little overkill to be honest.

F E Smith, Advocate
Category: Law
Satisfied Customers: 9032
Experience: I have been practising for 30 years.
F E Smith and other Law Specialists are ready to help you
Customer: replied 8 months ago.
Her solicors are on the other side of the country, so certified copies is probably the way to go for us! would this be sufficientfor the letter ?Tue Sep 13 2016
To: Whom it may concern
Re: ***************
Dear Sirs,
We confirm that we are gifting ****** of (address of purchaser/s),our Sister and Sister in Law, £20,000 towards the deposit for the purchase of the above property.
We confirm that the deposit is an unconditional and non-repayable gift, that we will have no interests or rights in the property whatsoever. We also confirm that we will not reside in the property.
We confirm the availability of the deposit monies and understand that we may be asked for proof.Yours faithfully
Customer: replied 8 months ago.
Plus a line about independant legal advice?
Customer: replied 8 months ago.
We just don't want her solictor to pick holes in it!

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