For clients
Why your solicitor asks for Source of Funds
Your solicitor is not only asking which account holds the money. They need to understand how the money was acquired and whether the explanation fits the matter.
This guide explains common Source of Funds requests. Your solicitor will decide what information and evidence is needed for your matter.
01
Why the check happens
Solicitors must carry out checks designed to prevent money laundering and other financial crime. If money is involved in the legal work, the firm may need to understand where it came from and whether it is consistent with what they know about you and the matter.
These checks are common and do not mean the firm suspects you of wrongdoing. Banks, estate agents and accountants may ask similar questions, although each organisation carries out its own checks.
- The amount being used in the matter needs a clear explanation.
- Different sources may need different supporting documents.
- The firm may ask follow-up questions if money moved recently.
- A third party providing money may need their own checks.
02
Start with a simple explanation
Tell your solicitor how much you are contributing and how it was built up. If the money comes from more than one place, list each source separately. For example, part may be savings and part may be a gift from a relative.
Give dates and amounts where you can. It is easier for the firm to review a short explanation supported by the right documents than a large bundle of statements with no context.
- Savings built up from salary or other regular income.
- Proceeds from selling property, investments or another asset.
- Inheritance, a court award or an insurance payment.
- Borrowing from a regulated lender.
- A gift from a family member or another person.
03
Documents that may help
The right evidence depends on the source. Bank statements often help show movement of money, but the firm may also need the document that explains the event behind it, such as a payslip, sale statement or probate document.
Use complete, readable documents and avoid cropping out dates, names or account details unless your solicitor has agreed that you can redact them. Send evidence through the secure route provided by the firm rather than ordinary email where possible.
- Bank statements showing savings accumulating or proceeds arriving.
- Payslips, tax records or accounts for employment or business income.
- Completion statements or contracts for an asset sale.
- Probate papers or professional confirmation for an inheritance.
- Loan documents or a gift declaration where another person provides money.
04
If someone else is providing money
Tell your solicitor early. The firm may need the person's name, contact details, relationship to you, the amount and whether the money is a gift or a loan. The person may then receive their own secure request for identity and funds evidence.
Do not send another person's identity documents from your own link unless the firm has specifically asked you to. Keeping each person's evidence separate protects privacy and helps the solicitor maintain an accurate file.
- Confirm whether the money is a gift, loan or contribution.
- Explain who is providing it and why.
- Let the firm contact the person through its own process.
- Ask what declaration or supporting evidence is required.
Questions clients and firms ask
Why is a bank statement not always enough?
It may show where money is held or when it arrived, but not how you acquired it. Your solicitor may need another document that supports the explanation.
Is my solicitor accusing me of money laundering?
No. Source of Funds checks are a normal part of regulated legal work where the firm needs to understand money connected to the matter.
Will a person giving me money need checks?
They may. Tell your solicitor early so the firm can decide what identity, funds and declaration work applies to that person.
