Laceys Solicitors Laceys is a leading, forward-thinking law firm with specialist experts serving both individual and business clients across a broad spectrum of practice areas.

If Social Services have notified you about legal proceedings concerning your child please call 01202 377995.



How does a gifted deposit for a house purchase work?

20th October 2022 by John Munro

Categories: What's New?

With house prices continuing to make buying a first home difficult, many people are given money towards the purchase by parents and other close relatives. When using a gifted deposit there are a number of steps to go through to satisfy lender and other legal requirements. You should also consider the legal implications of a gifted deposit, such as the effect on potential Inheritance Tax and how to protect money from the breakdown of a relationship.

Being given money towards purchasing a property can be a big advantage, allowing you to buy a more expensive property and take advantage of better mortgage deals. It is important for both the person giving the money and the recipient to understand the implications however.

What is a gifted deposit?

A gifted deposit is a sum of money given to someone towards the purchase of a property with no expectation that it will be paid back. The mortgage lender will need to be satisfied that it is a gift and not a loan.

Who can give a gifted deposit?

A gifted deposit is generally given by parents or grandparents. Mortgage lenders may also accept gifts from other close relatives such as uncles, aunts, step parents or siblings.

Obtaining the mortgage lender’s consent to a gifted deposit

Your mortgage lender must be advised that there is a gifted element to the deposit and will need to give their consent. Not all lenders accept gifted deposits, so you will need to check this before making a mortgage application.

They will have a set of rules and restrictions which must be observed and a set process for you and your solicitor to go through before you can proceed. This will generally require the donor to sign a gifted deposit letter confirming the money is a gift. Identity and bankruptcy checks will also need to be carried out and your solicitor will be required by law to do anti-money laundering checks in respect of the donor.

Inheritance Tax implications and gifted deposits

There can be Inheritance Tax implications when money is given away. If the person giving the money were to die within seven years of making the gift, then the amount given will be included in their estate for Inheritance Tax purposes. If their estate is over the threshold for payment of this tax, then Inheritance Tax will be payable on a sliding scale, depending how long ago the gift was given.

Gifts totalling £3,000 per year can be made without attracting Inheritance Tax and this allowance can be carried forward for one year only, making a total exemption of £6,000.

How to protect a gifted deposit

If the property that is being purchased is to be jointly owned, then the donor should consider how their gift will be protected, should the relationship end. This can be done by having a trust deed drawn up, specifying what share in the property each owner holds and how sale proceeds will be shared.

Contact us

If you would like to speak to any of our property team about gifted deposits, or any other queries relating to buying or selling a property, please contact Kelly Howe on or 01202 377800.

John Munro

Partner — Commercial and Residential Property

Direct dial: 01202 377839


John Munro, head of Property, Laceys Solicitors
  • “John Munro was friendly and very approachable, advising me with a clear depth of knowledge and experience. I have since recommended him and will do so if asked in the future.”

    N. Pitts-Crick

  • “Having dealt with Laceys on many a sale and purchase I’ve always found them to be efficient, knowledgeable and attentive. I wouldn’t hesitate in recommending them to family, friends and clients.”

    Stuart Cockram - Frost and Co

  • “We have always been very happy with the service provided by Laceys Solicitors, in both our business legal requirements and domestic property conveyancing.”

    Mark Edney

  • “You are our solicitor Superhero! Very grateful. ”

    Maria - Tom Frowde Architects

  • “Changing solicitors is not to be undertaken lightly. However really impressed with the way that John Munro and his associates have dealt with us over the last couple of years in a variety of complex property related transactions and on the commercial and personal front as well. We look forward to working with them going forward.”

    Malcolm Tice, Director - Tice & Son Ltd

John joined Laceys in 2001 on a training contract, having completed a Post Graduate Diploma in Law in 2000, and qualified as a solicitor in 2003. He is now the Head of the Commercial and Residential Property Departments.

He is also the firm’s Senior Responsible Officer under the Law Society Conveyancing Quality Scheme (CQS) with overall responsibility for the management of the property team and their delivery of the excellent service that our clients have come to expect.

John acts in his own capacity for a number of commercial property owners, developers and investors, but also allocates time to ensure his team are up to speed with changing law and professional regulations and clients are provided with members of the team who possess the right skills to deal with their individual requirements, delivering projects in the most time and cost-efficient manner.

Outside of work John seems to spend a great deal of time ferrying his children around but occasionally gets to put his feet up and listen to his eclectic collection of vinyl. He is also not averse to a good cheeseboard and a glass of IPA.

Related articles

House Key

Freehold v Leasehold. Make sure you know what you are buying.

If you are thinking of purchasing a property, it is vital you know what tenure it is...

Read Article

Adverse possession explained

Adverse possession, sometimes referred to as squatting, can give someone legal ownership of land if they have...

Read Article

Close X