Gift deposit from multiple sources

Discussion in 'Mortgages and buying and selling homes' started by aphrodite, Jan 12, 2017.

  1. aphrodite

    aphrodite New Member

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    I've been reading through other posts but can't find a situation similar to mine.

    My boyfriend and I have already been approved for a mortgage, we have our 6 month approval. We won the bid on a house but need to top up on our €50k deposit to reach the sale agreed price with gifts from our families.

    He received €10,000 from his parents as a gift, so that's straightforward enough.

    Now the problem is my side as I'm getting my gift from multiple sources but are all from family members, which is €8000 from an aunt, €7000 from grandmother, €5000 from my mother, €5000 from an uncle and €4000 from another uncle, totaling €29,000.
    From your experiences will the bank have a problem with so many gifts? My family aren't rich either it's just that a great uncle died and left them a decent inheritance each in his will, otherwise I would never have gotten these amounts.

    Also I believe my broker wants all the funds in one account, but will that bring tax implications for us if I transfer my €29,000 into his account, as we are not married??

    Thanks
     
  2. Gordon Gekko

    Gordon Gekko Frequent Poster

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    So you have mortgage approval for (say) €350k to which you're adding a deposit of €50k. Now the price is €429k and you're getting the €29k from those various sources?

    The tax piece can probably be made to work. I'll deal with that separately.

    My main question is why the bank would be interested at all if the situation is broadly as outlined above?
     
  3. Gordon Gekko

    Gordon Gekko Frequent Poster

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    If the bank will have visibility on these transfers, get your family members to transfer the cash to your Mum in the first instance and then on to you. From a tax perspective, the gifts would still be deemed to come from the various individuals, but it would be far cleaner in the context of explaining it to the bank (i.e. I got €29,000 from my Mum).
     
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  4. Gordon Gekko

    Gordon Gekko Frequent Poster

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    The gifts as envisaged will be taxed as follows:

    €8,000 from your aunt: First €3,000 ignored (Small Gift Exemption), with the balance (i.e. €5,000) coming off your Group B tax-free threshold of €32,500 (assuming you've never received any prior "Group B benefits).

    €7,000 from your grandmother: First €3,000 ignored (Small Gift Exemption), with the balance coming off the remainder of your Group B tax-free threshold of €27,500.

    €5,000 from your mother: First €3,000 ignored (Small Gift Exemption), with the balance coming off your Group A tax-free threshold of €310,000.

    €5,000 from your uncle: First €3,000 ignored (Small Gift Exemption), with the balance coming off the remainder of your Group B tax-free threshold of €20,500.

    €4,000 from your uncle: First €3,000 ignored (Small Gift Exemption), with the balance coming off the remainder of your Group B tax-free threshold of €15,500.
     
  5. Gordon Gekko

    Gordon Gekko Frequent Poster

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    If you're likely to exhaust your Group B or Group A tax-free thresholds down the line, it might make sense (if possible) for the gifts from your aunt/grandmother/Mum/uncles to also come from their spouses/partners, thus giving you the benefit of two Small Gift Exemptions per gift.

    e.g. the €8,000 from your aunt; if it came from both your aunt and your uncle, €6,000 would be disregarded (i.e. 2 x €3,000), and only €2,000 would eat into your Group B tax-free threshold.

    Clearly not a runner if your uncle/grandfather/Dad/aunts are deceased.
     
  6. aphrodite

    aphrodite New Member

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    The house price is €260,000 and our approval is for €176,000 (which is actually below the 3.5 income multiple, but I can gripe about that in a different thread...!) so we need to make up the difference of €84000... so that's €50k from ourselves, and €34,000 from gifts from both our sides, plus an extra €5,000 to cover legal fees etc.
     
  7. aphrodite

    aphrodite New Member

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    It's just the amount of gift letters that will have to be filled out, I'm just getting a bit paranoid that the bank will question why so many people are involved, and as you say it would look cleaner if it all came from one source ie. my Mum.
     
  8. aphrodite

    aphrodite New Member

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    My uncles have already paid 5k + 4k into my bank a/c, but my grandmother and aunt can still lodge into mums a/c, and in turn she would transfer over to me a clean €20,000, so big thanks for this suggestion, don't know why I didn't think of it already :)
     
  9. jim

    jim Frequent Poster

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    why don't you just trf the amounts you received already from 2 uncles straight back to them and then do it all through your mum, as Gordon suggested. I don't think the Bank can challenge that too much if you just say it was a transfer in and out back to your uncle.
     
  10. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Agreed. Reverse the transfers out and re-route it all via your Mum.

    Much cleaner and simpler.
     
  11. aphrodite

    aphrodite New Member

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    Thank you for your replies and for taking the time out to explain it all in detail, it's very much appreciated :)
     
  12. Billo

    Billo Frequent Poster

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    Should the numbers for Group B be 32500 27500 23500 21500 20500 ??? instead of as shown above 32500 27500 20500 and 15500.

    Rgds

    Billo
     
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  13. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Yes, you're spot on.

    Group B starts at €32,500;
    Aunt gives €8,000;
    Group B then €27,500;
    Grandmother gives €7,000;
    Group B then €23,500;
    Uncle gives €5,000;
    Group B then €21,500;
    Uncle gives €4,000;
    Group B then €20,500.

    I'd have got it right when I was a trainee!
     
  14. aphrodite

    aphrodite New Member

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    Just to update the thread, I rerouted the money through my Mum, handed in the gift letter, no problems there, and we are closing on Monday with everything sorted, thanks for your advice