Gifted Deposit Mortgage UK: Rules, Letter & Tax Guide 2026

Last updated: 18 July 2026

Saving £61,000 for a deposit when you’re paying £1,200 a month in rent isn’t realistic for most people. That’s the average first-time buyer deposit in England right now, according to UK Finance. It’s no surprise that family help has become one of the most common ways to get onto the property ladder. In 2025, 22% of first-time buyers completed with deposits under £20,000, and a large chunk of those were only possible because a parent or grandparent stepped in.

A gifted deposit is money given to you, usually by a close family member, to put towards buying a home. The giver doesn’t expect it back and has no claim on the property. Sounds simple. But the paperwork catches people out more often than the money itself does. This guide covers who can gift, what lenders like Halifax and Nationwide actually require, how the gift letter works, and what the tax position looks like for the person handing over the cheque.

 

What Is a Gifted Deposit?

A gifted deposit is a lump sum given to a homebuyer by a third party, almost always a family member, to cover part or all of the mortgage deposit. The giver cannot expect repayment and cannot hold any legal or beneficial interest in the property. If there’s any arrangement to pay it back, even informally, lenders will classify it as a loan instead, and that changes your affordability calculation entirely.

This matters because lenders run affordability on your committed outgoings. A £30,000 gift sitting in your account is just money. A £30,000 loan is a monthly repayment obligation that reduces what you can borrow. Barclays, for example, will only treat a deposit as a gift if the signed letter confirms no repayment is expected and no deed of trust protects the money. The moment those conditions aren’t met, their underwriter reclassifies it.

Who Can Actually Gift You a Deposit?

Parents, grandparents, and siblings are accepted by virtually every UK lender without extra scrutiny. Beyond that, it gets more nuanced. Halifax accepts gifts from step-parents, in-laws, aunts and uncles related by blood, nieces, nephews, and even cohabiting partners. But they won’t accept a gift from a family friend or a non-blood-related aunt or uncle. Nationwide takes a different approach and accepts gifts from anyone over 18, provided the gift is unconditional.

If your deposit is coming from someone outside the immediate family circle, a friend, a partner you’re not married to, or an employer, you’re not necessarily stuck. NatWest and Nationwide both consider non-family gifts for residential mortgages, though they’ll ask more questions about the relationship and the reason for the gift. Halifax and Barclays typically won’t. This is exactly the kind of thing a broker sorts out before you waste an application.

Is There a Limit on How Much Can Be Gifted?

No. There is no legal cap on how much someone can gift you towards a UK mortgage deposit. NatWest confirms they have no maximum gifted deposit limit, meaning a gift can cover any percentage of the total deposit. Whether it’s £5,000 to top up your own savings or £150,000 to cover the full deposit on a London flat, the amount itself isn’t the issue.

What matters is evidence. The larger the gift, the harder your conveyancer and the lender’s compliance team will look at where the money came from. A £10,000 gift from a parent’s current account with six months of statements behind it? Straightforward. A £200,000 gift from a grandparent’s investment portfolio? Expect questions about the portfolio’s history, the liquidation, and possibly a letter from their financial adviser. The principle is the same either way. Prove it’s clean, prove it’s a gift, and most lenders will proceed.

What Goes in a Gifted Deposit Letter?

Every UK lender requires a signed gifted deposit declaration before they’ll issue a mortgage offer. This letter comes from the person giving the money, not from you. Your broker or solicitor will usually hand them a template, though some lenders have their own required format.

The letter needs to confirm six things: the giver’s full name and address, your full name, the relationship between you, the exact amount being gifted, a statement that no repayment is expected, and confirmation the giver has no interest in or claim on the property. Halifax requires the letter to be dated within three months of completion. Nationwide skips the letter entirely and instead requires the donor to complete a Nationwide-specific form. Small differences like this trip people up when they apply to one lender using another lender’s template. A broker who handles gifted deposit cases regularly will know which form goes where.

If both your parents are gifting separately, or your parents and grandparents are all contributing, you’ll need a separate letter from each individual. Three gifters means three letters, three sets of ID, three sets of bank statements. Get these organised early. Chasing a signature from an elderly grandparent or a relative abroad is one of the most common causes of last-minute delays on exchange day.

How Do Different Lenders Handle Gifted Deposits?

Lender policies on gifted deposits vary more than most people realise. Here’s how six of the biggest high street names approach it, based on their current published criteria:

Halifax accepts gifts from a wide list of family members, including step-family and in-laws. They won’t accept gifts from unrelated friends, and they don’t allow gifted deposits on buy-to-let properties where the vendor is related to the buyer. A signed gift letter dated within three months of completion is required. No deed of trust allowed.

NatWest accepts gifts with a standard declaration letter. They have no cap on the gifted amount as a proportion of the total deposit. If the gift comes from the property vendor, NatWest will treat it as a purchase incentive, which reduces the amount they’ll lend.

Nationwide accepts gifts from anyone aged 18 or over, making them one of the most flexible lenders for non-family gifts. They don’t use a traditional gift letter. Instead, the donor completes a Nationwide-issued form.

Santander accepts gifted deposits with a signed letter. Under certain circumstances, they’ll consider a gift from a friend. But they won’t accept a gift from someone who plans to live in the property without being named on the mortgage.

Barclays accepts family gifts with a standard letter. The gift must be genuinely non-repayable and the donor must accept they have no property rights.

HSBC accepts gifted deposits from family members only. A standard letter is required.

Specialist lenders like Aldermore and Kensington tend to accept a broader range of donor relationships than the high street names, which makes them worth exploring through a broker if your situation doesn’t fit the standard mould.

Do You Pay Tax on a Gifted Deposit?

No. The person receiving a gifted deposit pays no income tax, no capital gains tax, and no “gift tax” on the money. The UK does not have a gift tax. You don’t declare it on your tax return. You don’t report it to HMRC. From the buyer’s side, a genuine cash gift for a house deposit is completely tax-free.

The tax question sits with the giver, not you. Each individual has a £3,000 annual gift exemption that’s immediately free from Inheritance Tax regardless of what happens afterwards. Two parents gifting together get £6,000 between them per year. If either parent hasn’t used last year’s allowance, they can carry it forward once, giving a combined total of up to £12,000 that’s completely sheltered.

Gifts above the annual exemption become what HMRC calls Potentially Exempt Transfers. If the giver survives seven years after making the gift, it falls out of their estate entirely and no Inheritance Tax applies. If they die within seven years and their total estate plus gifts exceeds the £325,000 nil-rate band, IHT of up to 40% can apply on the excess. Deaths between three and seven years after the gift qualify for taper relief, which reduces the rate. For most families gifting a typical £20,000 to £50,000 deposit, the realistic IHT exposure is zero, because the nil-rate band covers the gift comfortably. But if the giver’s estate is already close to £325,000 before making the gift, it’s worth them speaking to a tax adviser. Full details are on GOV.UK’s Inheritance Tax on gifts page.

One thing that doesn’t change: receiving a gifted deposit has no effect on your first-time buyer status for Stamp Duty purposes, as long as the person gifting the money isn’t named on the property title.

What Paperwork Will You Actually Need?

Three things, at minimum: the signed gifted deposit letter, three to six months of the giver’s bank statements showing the money sitting in their account, and evidence of where the giver’s funds originally came from. That third item is the one that catches people out. Anti-money-laundering rules have tightened significantly, and “it’s from my savings” without supporting evidence isn’t enough for most conveyancers any more.

Acceptable source-of-funds evidence includes long-term savings statements, a property sale completion statement, an inheritance letter or grant of probate, a pension lump sum statement, or investment liquidation records. If the giver sold a property two years ago and the money has been sitting in a savings account since, the chain of evidence is clean. If they withdrew £40,000 in cash from various accounts over several months and then deposited it back as a lump sum, expect questions.

Practical tip that saves time: have the giver transfer the funds into your account before exchange. Don’t send money directly to the conveyancer or the estate agent. It complicates the audit trail and some conveyancers will refuse to accept third-party funds altogether. The money should land in your account, sit there visibly alongside your own savings on a bank statement, and then your conveyancer draws on it at exchange.

What If the Gift Comes From Overseas?

UK lenders do accept gifted deposits from family members living abroad, but the process takes longer and the documentation requirements go up. On top of the standard gift letter, you’ll need certified translations of the giver’s bank statements (if they’re not in English), more detailed source-of-wealth evidence, currency conversion records showing the GBP equivalent received, and confirmation the giver is tax-compliant in their home country.

Allow an extra two to four weeks in your timeline when funds are coming from outside the UK. HSBC International, Investec, and Coutts are more comfortable underwriting overseas family gifts than most mainstream high street lenders. If your parents are based abroad and gifting a significant sum, a broker with experience in international deposits will save you from applying to a lender who’ll reject the case at underwriting stage.

How UK Mortgage Finder Can Help

Most gifted deposit applications don’t fail on affordability. They stall on paperwork. A gift letter with the wrong wording. Bank statements that don’t cover enough months. A donor who’s completed Nationwide’s form when the application is going to Halifax. These are fixable problems, but they cost weeks when they surface at the wrong point in a transaction.

UK Mortgage Finder connects you with FCA-regulated whole-of-market brokers who handle gifted deposit cases every week. They know which lenders are most flexible for your situation, whether that’s multiple gifters, a non-family gift, an overseas transfer, or a 100% gifted deposit with no personal savings. The service is free and there’s no obligation to proceed.

Frequently Asked Questions

Can I use a gifted deposit to remortgage?

No. Gifted deposits apply to purchases only. When you remortgage, the lender assesses your existing equity in the property, not a fresh deposit. A family member wanting to help with a remortgage would need to look at other options, such as paying down your existing balance directly.

Does a gifted deposit affect my first-time buyer stamp duty relief?

No. You keep your first-time buyer status and the associated SDLT relief regardless of whether your deposit is gifted, as long as the person giving the money isn’t added to the property title.

Can my parents gift me a deposit AND go on the mortgage?

They can, but that’s a different structure entirely. If your parents want their income counted towards what you can borrow, a Joint Borrower Sole Proprietor (JBSP) mortgage is usually a better fit. Their income boosts your affordability, they go on the mortgage but not on the property title, and they don’t trigger the second-property SDLT surcharge.

What if the gifter changes their mind and wants the money back?

Once the signed gift letter is in place and the mortgage has completed, the giver has no legal right to reclaim the funds. The letter explicitly states no repayment is expected. Any informal family arrangement made later is a private matter, but it cannot have been a condition of the original gift.

Will lenders accept a 100% gifted deposit where I haven’t saved anything myself?

Some will. NatWest, for example, has no cap on the proportion of the deposit that can be gifted. Others, particularly at 90-95% LTV, prefer to see at least some personal savings alongside the gift. A broker will steer you towards lenders whose criteria fit.

How long does a gifted deposit mortgage take compared to a normal application?

If the gift letter, ID, and bank statements are ready before you apply, the timeline is the same as any standard application, typically four to six weeks to offer. The delays come from missing or incorrect paperwork, not from the gift itself.

Can more than one person contribute to my gifted deposit?

Yes. Both parents gifting £20,000 each, or parents plus a grandparent, is common. Each person needs to provide their own signed gift letter, their own ID, and their own bank statements. Three gifters means three separate packs of evidence.

Is a verbal promise from my parents enough for the lender?

No. Every UK mortgage lender requires a formal signed gifted deposit declaration on paper. A verbal agreement, a WhatsApp message, or an email won’t satisfy underwriting requirements.

Can I use a gifted deposit for a buy-to-let purchase?

Some lenders allow it, others don’t. Halifax, for example, won’t accept gifted deposits on buy-to-let if the vendor is related to the buyer. Santander and NatWest may consider it in certain scenarios. Specialist BTL lenders tend to be more flexible, but criteria are assessed case by case.

Do I need to tell my solicitor about the gifted deposit?

Yes, always. Your solicitor (conveyancer) has a legal obligation under anti-money-laundering rules to verify the source of all funds used in the purchase. They’ll need the gift letter, the giver’s ID, and their bank statements. Failing to declare a gifted deposit can cause serious legal complications at exchange.

Important: The information in this article is for guidance purposes only and does not constitute financial or tax advice. A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. You should seek independent advice from an FCA-regulated mortgage adviser, and from a qualified tax adviser regarding any Inheritance Tax implications, before making any financial decisions. UK Mortgage Finder introduces customers to FCA-regulated mortgage brokers and advisers.