09. Gifted Deposit Declaration

A Gifted Deposit Declaration is a formal document used in property transactions to confirm that a sum of money given to a remortgager by a third party, typically a family member, is a gift and not a loan. This declaration is crucial for lenders, who need assurance that the deposit money does not need to be repaid, which could affect the remortgager's ability to make mortgage repayments. 

How does it work? 


The process of using a gifted deposit in a remortgage involves several steps: 

Gift offer 
  • A family member, such as a parent or grandparent, decides to provide financial assistance to the remortgager in the form of a gift. 
  • The gift can cover part or all of the deposit required for the remortgage. 

Gifted Deposit Declaration
  • The person giving the gift (the donor) must complete and sign a Gifted Deposit Declaration form. 
  • This form confirms that the money is a gift, not a loan, and that the donor has no financial interest or ownership claim over the property.

Content of the declaration 
  • Donor’s information: Full name, address, and relationship to the remortgager. 
  • Remortgager’s information: Full name and address. 
  • Amount of gift: The exact amount being gifted. 
  • Nature of gift: A statement confirming the money is a gift with no expectation of repayment. 
  • Source of funds: Confirmation that the funds are from legitimate sources and are not borrowed. 
  • Acknowledgment: An acknowledgment that the donor will not have any ownership or rights over the property. 

Supporting documents 

Lenders may require additional documentation to support the declaration, such as: 

  • Bank statements: Showing the donor's source of funds. 
  • Identification documents: Proof of identity for the donor. 
  • Letter from solicitor: Sometimes, a solicitor’s letter confirming the gift might be required. 

Submission to lender 
  • The completed Gifted Deposit Declaration and supporting documents are submitted to the mortgage lender. 
  • The lender reviews the documentation to ensure compliance with their requirements and anti-money laundering regulations. 

Impact on mortgage application
  • The lender assesses the gift as part of the remortgager’s deposit. 
  • The presence of a gifted deposit can positively impact the remortgager’s mortgage application by increasing the deposit amount and potentially improving loan-to-value (LTV) ratios.

Completion of remortgage 
  • Once the lender approves the gifted deposit and other mortgage conditions are met, the remortgage process can proceed to completion. 
  • The gifted funds are typically transferred to the remortgager’s solicitor, who then uses the money to complete the remortgage transaction. 

Importance of Gifted Deposit Declaration 


  • Transparency: Ensures that all parties involved in the remortgage transaction, including the lender and legal representatives, are fully aware of the source of the deposit funds. 
  • Legal compliance: Helps to comply with anti-money laundering regulations by providing a clear paper trail of where the funds are coming from. 
  • Financial stability: Assures the lender that the remortgager is not under additional financial pressure to repay the gift, which could affect their ability to meet mortgage repayments. 
  • Trust and assurance: Builds trust and confidence among all parties that the remortgage transaction is being conducted fairly and transparently. 

A Gifted Deposit Declaration is a crucial document in remortgaging transactions involving gifted deposits. It provides the necessary assurance to lenders and legal entities that the funds are genuinely a gift, thereby facilitating a smoother and more transparent remortgage process. 

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