LEGAL
There are many rules and regulations regarding where the money has come from when buying your first home. Bevin Woby, Director of Shared Direction Conveyancing, explains what it all means Anti-Money Laundering – what you need to know
WHAT IS COMPLIANCE? Compliance is the process of gathering the necessary identity and source of funds documents to meet the regulations for anti- money laundering (AML).
WHY IS IT IMPORTANT?
As a firm of conveyancers it is our responsibility to transfer the funds for the purchase and we have to abide by the AML Regulations 2017. We are responsible for documenting the identity of any parties we are dealing with, as well as the origin of any funds taken into our accounts. We are audited by the Solicitor‘s Regulation Authority to make sure we are upholding the AML standards. As such, we are simply unable to accept funds which we are unable to document the source of. According to National Crime Agency research from 2020, it is a realistic possibility that over £100bn is laundered through and within the UK or UK- registered corporate structures each year. We are required by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 to source all funds being used towards the property deposit; this was amended in 2019 and continues to have updates making rules stricter. As the conveyancers, we will be taking the funds into the client account and distributing them, this is why often the requirements can be more stringent than the other parties involved (housing associations, agents, financial advisers) who do not handle the funds directly. Here are some useful tips for getting prepared: 9 What is a PEP? It means a “politically exposed person”. This can be a role from a civil servant to a Member of Parliament and if this applies, it is important that this is disclosed to avoid any delays later in the process 9 Documentation will be requested for any larger or non-regular payments
paid on any self-employment and for the business 9 If the funds are from abroad, translating the documents is often time-saving 9 Moving your funds while we are sourcing can lead to us needing more documentation (for example, for property sale proceeds coming into the account and then moving to savings we would need the full fund movement trail) 9 These checks are not for affordability but to determine how the funds have been accumulated and that they are from legitimate sources 9 We do not care if you buy 10 McDonalds a week!
9 Gifts will need to be sourced and gifters will need to provide documentation 9 We will request additional documentation if we need clarification of incoming funds, this can feel a little back and forth, but we do not know what is needed until we see the initial documentation. If, for example, you received an inheritance, please provide
the documentation to show this, eg the Will and the statement with the inheritance funds received
9 If you are in receipt of benefits, we will require documentation showing that you have informed them of your savings – having this done will speed up the process 9 We will need to ensure that tax is being
sdclegal.co.uk
82 First Time Buyer February/March 2025
Made with FlippingBook Digital Publishing Software