Gifted deposit rules: the bank of mum and dad, done properly

Family-gifted deposits are everywhere in the current market, and lenders are entirely comfortable with them, provided the gift is structured the way lenders require. Get the paperwork right and a gifted deposit is no harder than your own savings. Get it wrong, call it a loan in passing, move money through three accounts, skip the letter, and it can stall or sink an otherwise clean application.

Here's how gifted deposits actually work in 2026.

What counts as a gift

For mortgage purposes, a gift must be exactly that: money given outright, with no repayment expected, no interest, and no stake in the property for the giver. Lenders require this because a hidden loan would change your affordability, and a hidden ownership interest would complicate their security. If the family arrangement genuinely is a loan, say so, a small number of lenders can work with structured family loans, but it's a different conversation and the loan payments count against affordability.

Who can gift

Parents, grandparents and siblings are accepted almost universally. Wider family, aunts, uncles, cousins, is accepted by many lenders but not all. Gifts from friends or unrelated parties are much harder to place; only a minority of lenders accept them, and scrutiny is higher. Gifts from the seller of the property (vendor gifts) are a special category with tight rules and limited lender appetite. The practical rule: the closer the relationship, the easier the placement.

The gift letter

Every lender wants a signed letter from the giver confirming, at minimum:

• The amount of the gift and who it's for.
• That it is a gift, not a loan, with no repayment expected.
• That the giver will hold no interest in or rights over the property.
• The giver's relationship to you.
• Often: confirmation the giver is solvent, and signature witnessing or ID requirements.

Most lenders have their own template, and your solicitor will usually also need ID and proof of funds from the giver for anti-money-laundering purposes. We supply the right template for the chosen lender so it's done once, correctly.

Evidence and anti-money-laundering checks

Expect the giver to show where the money came from: savings statements, an account history, proceeds of a property sale or an inheritance with supporting paperwork. This isn't the lender being nosy, it's a legal obligation on lenders and solicitors. Gifts arriving from overseas accounts are workable but need a clearer paper trail and can take longer; money that has hopped between several accounts shortly before the application makes everything slower. Cleanest version: one transfer, from the giver's account, with the trail documented.

Tax: what givers should know

There's no tax for you on receiving a gift. For the giver, the main consideration is inheritance tax: broadly, a gift falls out of their estate if they survive seven years after making it, and everyone has a small annual gifting exemption on top. Larger gifts as part of estate planning deserve proper advice, we're not tax advisers, and we'd always suggest the giver speaks to an accountant or financial planner where the sums are significant.

Gifted equity: buying a family member's property below market value

A related structure: parents sell you their property at a discount, and the discount acts as your deposit. Many lenders accept gifted equity from close family, some lending up to the full discounted purchase price so you need little or no cash deposit. Criteria vary on relationship, discount size and property type, and the tax angles (for the seller especially) need advice. It's a lovely structure when it fits, and we arrange these regularly.

If an outright gift doesn't suit

Some families want to help without handing money over permanently. Options include joint borrower sole proprietor (JBSP) mortgages, where a parent joins the mortgage and its liability but stays off the deeds, and family assist products where family savings sit as security. Each has trade-offs, JBSP parents are fully liable, and savings-as-security products lock the money up, so it's worth a proper conversation about which form of help actually fits.