Gifted Deposit Mortgage: Who Can Gift, the Letter, Tax Rules and Family Springboard Options

By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 27 September 2026. Last reviewed 27 September 2026.

A gifted deposit mortgage is an ordinary UK residential mortgage where some or all of the deposit is money given to the buyer, usually by a parent or grandparent, with no expectation of repayment and no share in the property. The lender treats the gift like your own savings, provided the donor confirms in writing that it is a true gift and the source of the money can be evidenced.

Gifted deposits are now normal. A large share of first-time buyers get help from family, and every major lender accepts them. What is not normal is a smooth gifted deposit case. The rules on who can give, what paperwork is needed, how overseas money is handled and whether the gift has tax consequences differ from lender to lender, and the solicitor runs its own anti-money laundering checks on top.

This guide sets out the rules lender by lender as checked in September 2026, gives you a gifted deposit letter template, explains inheritance tax with real numbers, and compares an outright gift with family-assisted products such as Barclays Family Springboard and Lloyds Lend a Hand.

What is a gifted deposit?

A gifted deposit is money given towards a property purchase that the buyer never has to pay back, that carries no interest and that gives the donor no legal or beneficial interest in the home. All three conditions matter. If any of them fails, the lender no longer sees a gift. It sees a loan or a co-owner, and it will assess the case very differently.

The gift can make up the whole deposit or top up your own savings. It can come as cash, as a transfer from a parent’s savings, from the proceeds of a relative’s property sale or remortgage, or as gifted equity when you buy a home from a family member below its market value. Most lenders do not set a maximum gift. What they care about is proof: who gave it, where the money came from and a signed confirmation that it is non-repayable.

Gifts are not a special mortgage product. You apply for a normal residential mortgage, and the lender’s criteria on gifted deposits decide whether the gift is acceptable. That is why the choice of lender matters as much as the rate.

Who can give you a gifted deposit?

Family members can give a gifted deposit at every mainstream lender. Friends, cousins, employers and other third parties are where lenders split. Parents and grandparents are accepted everywhere. Siblings, aunts, uncles, step-parents and in-laws are accepted by most. First cousins are accepted by some high street lenders and refused by others. Friends are accepted by a smaller group, and a gift from the seller, the builder or an estate agent is refused by almost everyone because it looks like a disguised price reduction.

The reason is fraud risk. A gift from a parent has an obvious motive. A gift from a friend or a business contact raises the question of whether it is really a loan, or money being washed through a property purchase. Lenders that accept third party gifts usually ask for more evidence.

Partners are a special case. Halifax, for example, will accept a gift from a partner or former partner who will not be living in the property. If they will live there, most lenders expect them on the mortgage or at least named as an occupier who signs away any claim.

Which mortgage lenders accept gifted deposits, and from whom?

Every lender below accepts gifted deposits. The table shows who they accept as a donor, based on published intermediary or consumer criteria checked in September 2026. Criteria change often, so this is a starting point, not a guarantee.

Lender	Acceptable donors	Notable rules (Sep 2026)
Halifax	Family only: parents, grandparents, siblings, aunts, uncles, nieces, nephews, step and in-law relations	Not friends, cousins, employers or vendors. Partner or former partner not living at the property accepted. Overseas gifts from acceptable family must come into a UK account. Donor letter dated within 3 months
Barclays	Relatives, including first cousins	Gift must be non-refundable and non-interest bearing
Nationwide	Any donor, provided the gift has no conditions	No maximum. Gift form from £10,000. Overseas donors: 3 months of statements from EEA, 6 months from outside the EEA. Money held over 12 months treated as your savings
NatWest	Family and third parties, including friends, if non-repayable	Confirmation by letter or email, no signature required on its own form
Santander	Close family and friends	Usually no separate gift letter needed when the mortgage is with Santander
HSBC	Family, including cousins, in-laws and step relations	Taken from secondary summaries of HSBC intermediary guidance; confirm before applying

Two things stand out. First, if your gift is from a friend, your realistic list shortens to lenders such as Nationwide, NatWest and Santander. Second, Nationwide will even let the donor borrow to fund the gift, and accepts a family second charge if it is only repayable on sale and carries no interest. That flexibility is rare.

Can you get a mortgage with a gifted deposit from overseas?

Yes, but the evidence bar is higher and it is where many gifted deposit cases stall. Lenders and solicitors need to follow the money from its origin to your UK account, and an overseas transfer adds currency conversion, a foreign bank and sometimes a foreign language to that trail.

Halifax accepts overseas gifts from acceptable family members, but the money must land in a UK bank account. Nationwide asks for 3 months of the donor’s bank statements if the donor is in the EEA and 6 months if they are outside the EEA. Other lenders ask for statements translated into English, and some refuse gifts from certain high risk jurisdictions altogether.

Practical steps: move the money early, not the week before exchange. Send it in one transfer if you can, from an account in the donor’s own name, straight to an account in yours. Keep the SWIFT confirmation. Ask the donor to keep the statements that show where the money built up, whether that is salary, a property sale or a pension lump sum. A gift that arrives in five pieces through three accounts is far harder to evidence than one clean transfer.

What is a gifted deposit letter, and what must it say?

A gifted deposit letter is a signed statement from the donor confirming that the money is a gift, not a loan, and that they will have no interest in the property. Lenders and solicitors both rely on it. Many lenders have their own form, and your solicitor will often send their own version too, so you may sign more than one.

The letter normally needs to include: the donor’s full name, address and relationship to you; the exact amount; the address of the property being bought; a statement that the gift is non-repayable and carries no interest; a statement that the donor will have no share in the property and will not live there, or if they will live there, that they waive any rights of occupation against the lender; confirmation of where the money came from; and the donor’s signature and date. Halifax wants it dated within 3 months of the application.

Use the template below as a starting point. If your lender or solicitor issues its own form, use theirs.

What evidence does the solicitor need for a gifted deposit?

Your solicitor must run anti-money laundering checks on the donor, not just on you. Expect to provide the donor’s photo ID and proof of address, the signed gift letter, and bank statements showing the money leaving the donor’s account and how it got there. Most firms want 3 to 6 months of statements, and they will ask about any large deposit in that period.

This is where the source of funds matters. If a parent gives you £40,000 from savings built up over years, the statements tell the story. If the £40,000 arrived in the parent’s account last month from a property sale, the solicitor will want the completion statement for that sale. If it came from an inheritance, they will want the estate accounts or a letter from the probate solicitor. If it came from a pension lump sum, the pension provider’s payment letter.

Some solicitors also ask the donor to take independent legal advice or meet them, especially with larger gifts or elderly donors, to confirm the gift is voluntary. Nationwide’s criteria explicitly guard against coercion. Build a week or two into the timeline for this. It is the most common reason a gifted deposit purchase slips past its exchange date.

Does a gifted deposit have inheritance tax implications?

Yes, potentially, but for most families the tax bill is zero. Under HMRC’s rules a gift of money is a potentially exempt transfer. If the donor lives for 7 years after making it, it falls outside their estate completely. If they die within 7 years, the gift counts towards their £325,000 nil-rate band, and tax is only due on the gift itself if gifts in those 7 years exceed that band.

Some gifts are exempt from the start. Each person can give away £3,000 a year under the annual exemption, and can carry forward one unused year, so £6,000 for a parent who gave nothing last tax year. Two parents can therefore give £12,000 immediately exempt. Gifts on marriage or civil partnership are exempt up to £5,000 from a parent and £2,500 from a grandparent. Regular gifts out of surplus income are also exempt, which does not usually help with a lump sum deposit.

If tax is due on a gift made 3 to 7 years before death, taper relief reduces it on a sliding scale.

Years between gift and death	Tax rate on the gift
Less than 3	40%
3 to 4	32%
4 to 5	24%
5 to 6	16%
6 to 7	8%
7 or more	0%

Source: gov.uk, Inheritance Tax: gifts, checked September 2026. Taper only reduces tax on the gift itself where it exceeds the nil-rate band. A gift inside the band pays no tax of its own but uses up part of the band, which can leave more tax on the rest of the estate. We are mortgage specialists, not tax advisers, so large gifts should be checked with an accountant or solicitor.

Worked example: a £45,000 gift from two parents

Here is how the numbers work on a typical first-time buyer purchase.

Sophie is buying a £300,000 flat. She has saved £15,000 herself, which is 5%. Her parents give her £45,000, which is 15%. Her total deposit is £60,000.

• Deposit: £15,000 + £45,000 = £60,000
• Loan: £300,000 minus £60,000 = £240,000
• Loan to value: £240,000 divided by £300,000 = 80%

Without the gift she would need a 95% mortgage of £285,000. With it, she borrows £45,000 less and moves from the 95% rate tier to the 80% tier, which is typically noticeably cheaper per month. That rate gap, not just the lower loan, is where most of the value of a gift sits.

Now the tax side. Each parent gives £22,500. Neither gave anything last tax year, so each uses £3,000 for this year plus £3,000 carried forward. That makes £6,000 each, £12,000 in total, exempt from day one. The remaining £33,000 (£16,500 per parent) is a potentially exempt transfer. If both parents live 7 years, it drops out entirely. If one parent died after 4 years, their £16,500 would count towards their £325,000 nil-rate band. Unless their other gifts in that 7 year period took them over £325,000, no tax would be due on the gift itself.

What is gifted equity, and how does it work when buying from family?

Gifted equity is a discount on the price when a family member sells you a property for less than it is worth, and the lender treats the difference as your deposit. It is common when parents sell a home to a child, or when a landlord relative sells to a tenant in the family.

Example: your parents own a house worth £250,000 and agree to sell it to you for £200,000. The £50,000 discount is gifted equity. Lenders that accept it treat the £50,000 as a 20% deposit, so you borrow £200,000 at 80% of the market value, with no cash deposit at all.

Rules vary. Nationwide’s criteria for concessionary purchases cap lending at 90% of the open market value and never above 100% of the discounted price, which in this example limits the loan to £200,000. Most lenders want a full valuation, a gifted equity letter from the seller, and both sides using separate solicitors. Some lenders refuse gifted equity entirely, and many will not accept it where the seller is a friend rather than family.

There are tax points on the seller’s side. If the property is not their main home, capital gains tax is normally worked out on market value for sales to connected people, and the £50,000 discount is itself a gift for inheritance tax. Stamp duty is normally charged on the price you actually pay. Get the seller’s accountant involved before agreeing a price.

Gift or loan: why does the difference matter to the lender?

A gift adds to your deposit. A loan adds to your deposit and to your outgoings, and lenders count those outgoings against how much they will lend. That is why the letter says non-repayable, and why declaring a loan as a gift is mortgage fraud.

Here is the affordability effect. Suppose a parent lends you £20,000 and you agree to repay £400 a month. A lender stress testing at around 7% over 25 years treats £400 a month as roughly the repayment on a £56,600 mortgage (£400 divided by about £7.07 per £1,000 borrowed). In other words, a £20,000 loan could cut your borrowing by more than twice its own size. Many lenders will simply decline an informal family loan used for the deposit.

There are legitimate middle routes. Some lenders, Nationwide among them, will accept a family second charge that is only repayable on sale and carries no interest. Or the family member can join the mortgage through a joint borrower sole proprietor mortgage, where their income helps affordability without putting them on the deeds. If the family would rather guarantee the loan than hand over cash, a guarantor mortgage is another option.

What is a family springboard mortgage?

A family springboard mortgage is a family-assisted product where a relative puts savings into an account linked to your mortgage instead of giving you the money. You can then borrow up to 100% of the price. The savings sit as security for a fixed period, then are returned to the relative with interest, provided your payments are up to date.

Barclays Family Springboard is the best known. A helper deposits 10% of the purchase price into a Helpful Start account for 5 years. Barclays’ intermediary criteria in September 2026 set a maximum loan of £500,000, purchases only, and the product is not restricted to first-time buyers. Lending is capped at 4.0 times income, or 4.49 times where income is over £50,000. If you fall into arrears, the helper’s money can be held beyond the 5 years or used to cover the shortfall.

Lloyds Lend a Hand works on the same principle for first-time buyers. It has been widely reported as 10% of the price held for 3 years, on homes up to £500,000 in England and Wales. Lloyds’ own product page was unavailable when we checked in September 2026, so confirm the current terms before relying on them.

Gifted deposit vs Family Springboard vs Lend a Hand: which is better?

The right choice depends on whether the family can afford to part with the money for good, and whether you need a 100% loan.

Feature	Outright gifted deposit	Barclays Family Springboard	Lloyds Lend a Hand
Family money returned?	No, it is gone	Yes, after 5 years if payments are up to date	Yes, after 3 years if payments are up to date (check current terms)
Amount family provides	Any amount	10% of purchase price	10% of purchase price (check current terms)
Buyer’s own deposit needed	Depends on gift size	None	None
Lender choice	Whole of market	Barclays only	Lloyds only
Max loan or price	Lender’s normal limits	£500,000 loan	Reported £500,000 price, England and Wales
Borrowing multiple	Lender’s normal multiple, often 4.5x or more	4.0x, or 4.49x over £50,000 income	Lloyds’ standard assessment
Inheritance tax	Potentially exempt transfer	Money stays the helper’s, not a gift	Money stays the helper’s, not a gift
Risk to family money	None after gifting	Held or used if you fall into arrears	Held or used if you fall into arrears

The trade-off is flexibility against control. A gift lets you use any lender and usually borrow more. A springboard product keeps the money in the family’s name, but ties you to one lender, one product range and a lower income multiple. For buyers with no deposit, it is worth comparing against the other no deposit mortgage routes too.

Why do gifted deposit mortgage applications get declined, and how do you fix them?

Most declines are paperwork and process, not the gift itself. These are the ones we see most.

1. The donor is not on the lender’s list. A cousin’s gift at Halifax, or a friend’s gift at Barclays. Fix: check donor criteria before you apply, not after.
2. The money cannot be traced. Cash deposits, multiple transfers or a donor who cannot explain a large credit. Fix: one clean transfer, and the donor’s statements and source documents ready in advance.
3. The gift is really a loan. A repayment arrangement shows up on your bank statements, or a family member expects a share. Fix: be honest. Use a loan-friendly lender, a second charge structure or a joint borrower product instead.
4. The donor wants to live there. Lenders need anyone over 17 who will live in the property to sign an occupier’s waiver. Fix: flag it at application.
5. The gift letter is out of date or inconsistent. Amounts or addresses do not match the application. Fix: one letter, matching figures, dated recently.
6. Overseas money arrives late. Fix: transfer it weeks before exchange, into a UK account.
7. The gift was not declared. Not declaring a gifted deposit is a breach of the mortgage application and can lead to the offer being withdrawn. Fix: always declare it.

A Knox case: gift from overseas grandparents

This is an anonymised, illustrative case. A first-time buyer couple in Greater Manchester were buying at £275,000 with £12,000 of their own savings and a £30,000 gift from one partner’s grandparents, who lived outside the EEA. Their first lender had already raised questions because the money had arrived in three transfers via a relative’s account.

We restructured the evidence rather than the gift. The grandparents supplied 6 months of translated statements showing the money came from the sale of a rental property, plus the sale documents. The relative who had passed the money through signed their own confirmation. We then placed the case with a lender whose criteria accept overseas family gifts with that level of evidence. Deposit £42,000, loan £233,000, 84.7% loan to value. Offer issued, and the solicitor’s AML checks cleared first time because the paperwork was built for them.

How Knox can help with a gifted deposit mortgage

A gifted deposit changes which lenders suit you before it changes anything else. We check the donor, the source of the money and any overseas element against lender criteria first, then look at rate and affordability. We also get the gift letter and evidence ready for the solicitor so AML checks do not hold up exchange.

If you are a first-time buyer working out how much you need, start with our guide to how much deposit you need for a house. If the gift will get you to 5% rather than 10% or more, see our guide to the 5% deposit mortgage.

Frequently asked questions

Can I get a mortgage with a gifted deposit?

Yes. Every major UK lender accepts gifted deposits, provided the gift is non-repayable, carries no interest and gives the donor no share in the property. You will need a signed gift letter and evidence of where the money came from. Which relatives or friends can give depends on the lender.

Who can give me a gifted deposit?

Parents and grandparents are accepted by every mainstream lender. Most also accept siblings, aunts, uncles and step or in-law relations. Barclays and HSBC accept cousins; Halifax does not. Nationwide, NatWest and Santander accept gifts from friends. Gifts from sellers, builders or employers are almost always refused.

What should a gifted deposit letter include?

The donor’s name, address and relationship to you, the amount, the property address, a statement that the money is a non-repayable gift with no interest and no share in the property, the source of the funds, whether the donor will live there, and the donor’s signature and date.

Do I have to pay tax on a gifted deposit?

The buyer does not pay tax on receiving a gift. For the donor, the gift is a potentially exempt transfer for inheritance tax. If they live 7 years it is outside their estate. The first £3,000 per person per tax year, plus one carried forward year, is exempt immediately.

What happens if I do not declare a gifted deposit?

Not declaring a gift is a breach of your mortgage application and can be treated as fraud. The solicitor will almost certainly spot it during AML checks, and the lender can withdraw the offer, sometimes days before completion. Always declare the gift at application.

Can a gifted deposit come from a friend?

Yes, at some lenders. As of September 2026, Nationwide accepts gifts from any donor without conditions, and NatWest and Santander accept gifts from friends. Halifax and Barclays accept family only. Expect more scrutiny of the friend’s source of funds.

How does Barclays Family Springboard work?

A family member puts 10% of the purchase price into a Barclays Helpful Start account for 5 years, and you borrow up to 100%. The savings are returned with interest after 5 years if payments are up to date. Maximum loan £500,000, lending capped at 4.0x or 4.49x income.

Can a gifted deposit be used for a buy-to-let or remortgage?

Sometimes. Most lenders accept gifts for residential purchases, and some for buy-to-let from family, but criteria are tighter. On a remortgage, a gift can reduce the loan to value to reach a cheaper rate tier, and the same letter and evidence rules apply.

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