guide to

source of wealth

Source of wealth describes how a client, or their family, has acquired their total wealth. For example, the critical focus for the solicitor is to understand what has generated or contributed to the accumulation of a client’s financial status or other assets.

When asked to provide a source of funds, the onus is on the buyer to provide documented proof of how the money came to be in their possession. Depending on individual circumstances, clients may need to provide some or all of the following:

• Savings (ISA/Investments) – includes regular payments from an income such as a salary or pension. Bank statements can provide satisfactory evidence of this. The solicitor will advise how many months of bank statements they require sight of. These allow the solicitor to see the money being paid by either an employer or pension scheme where the money can be seen gradually increasing in your bank account over time.
• Sale of another property – a copy of the completion statement from your solicitor and a copy of your bank statement showing the sale money being received following completion, plus bank statements to show funds have remained within your account.
• Inheritance – a copy of any statement regarding the finalisation of the estate from which funds have been paid will be required, along with vouching payments made into a relevant bank account from the inheritance entitlement, plus bank statements to show funds have remained within your account. 
• Gift from a relative – the personal identification for the relative, i.e. passport or driving licence, proof of address of each individual the contribution is associated with, for example, both parents. Additionally, would require evidence of a ‘trail’ of funds from the relatives.
• Sale of shares – if shares have been sold to produce funds to assist with the transaction, then the associated sale contract notes will be required along with statements for any relevant bank transfers and payments.
• Loan (Director’s/Personal) – If a personal loan has been taken out to release funds, a copy of the loan agreement and statements vouching for payment of the loan funds will be required. If the loan is from a company in which you are involved, i.e. Director/Shareholder, then vouching will be necessary from company accounts, company bank records and possibly company auditors.