Source of Funds Declaration
States where money for a transaction came from, with evidence listed.
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I, [full name], residing at [address], do hereby solemnly declare as follows:
1.That the sum of $ [amount] is being applied towards [purpose].
2.That the said funds are derived entirely from the sources set out below, all of which are lawful:
| Source | Amount |
|---|---|
| [add one source per line] |
3.That the funds are not the proceeds of any offence, and are not held on behalf of any other person.
4.That the following documents are produced in support of this declaration:
[add one document per line]
5.That the statements made above are true to the best of my knowledge and belief, and that I have not concealed anything material.
| Place | [place] |
| Date | October 14, 2026 |
What is a Source of Funds Declaration?
A source of funds declaration states where the money for a specific transaction came from and lists the evidence that proves it. It matters because banks, solicitors, estate agents, accountants and casinos are required under anti-money-laundering rules to establish the origin of funds before proceeding, and an unanswered question stops the transaction rather than slowing it. A property completion held up for a fortnight is almost always a source of funds enquiry that was answered vaguely.
Buyers of property give one to their conveyancer, and again to the lender. Investors give one when opening a brokerage or crypto account, subscribing to a fund, or making a large deposit. Company officers provide one on behalf of a business when funding an acquisition or an unusually large payment. Anyone receiving a substantial gift or inheritance that will be used in a transaction usually needs one from the donor as well as themselves. Regulated firms — solicitors, accountants, estate agents, banks, trust and company service providers — request it as part of their customer due diligence file.
The obligation sits on the regulated firm, and the standard varies. The UK money laundering regulations and Law Society guidance, EU anti-money-laundering directives as transposed locally, the US Bank Secrecy Act regime and FinCEN rules, Canada's FINTRAC requirements, AUSTRAC's rules in Australia and India's Prevention of Money Laundering Act each set their own expectations for enhanced due diligence, politically exposed persons and reporting. Firms also set internal policies stricter than the law. Ask the requesting firm exactly what evidence they need and in what form before you assemble anything.
The declaration is a statement, not proof. Firms are required to verify, so a signed page without documents behind it achieves nothing. It is also distinct from source of wealth, which asks how the overall wealth was built rather than where this particular payment came from — many firms want both, and answering only one is a frequent cause of repeat requests. Nothing in it protects a transaction that should not proceed: a firm that remains uncomfortable can decline, and in some circumstances is legally required to report rather than explain why.
What to put in a Source of Funds Declaration
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Issued to (full name) | For example: James Whitfield |
| Their address | For example: 588 Kinnear Road, Columbus, OH 43212 |
| Amount | For example: 18,00,000 |
| What it is for | For example: Purchase of a residential flat at Grandview, Columbus |
| Where the money came from | One per line: Source | Amount |
| Documents attached | One per line |
How to write a Source of Funds Declaration
Ask exactly what the recipient requires
Before writing anything, ask the solicitor, bank or agent what they need: which documents, covering what period, in what format, and whether they want source of wealth as well as source of funds. Requirements differ between firms and between transactions. Assembling the wrong six months of statements and having to redo it is the main reason these enquiries take weeks rather than days.
Identify each separate source of the money
Break the total into components and name each: proceeds of a house sale, savings accumulated from employment over a stated period, a gift from a named relative, an inheritance from a named estate, a company dividend, sale of shares. A single line saying savings is what triggers follow-up questions. Show the amounts adding to the exact figure being transferred, including any deposit already paid.
Attach evidence for every component
Match each source to documents: completion statement for a sale, bank statements showing accumulation, payslips or accounts for earnings, a grant of probate or executor's letter for an inheritance, a contract note for a share sale, a signed letter from the donor plus their own evidence for a gift. Statements should show the account holder's name, the account number and the full period, not a screenshot of a balance.
Explain any unusual movement in the account
Large round-sum credits, transfers from accounts in other names, cash deposits and money arriving from overseas will all be queried. Explain them in the declaration before they are asked about, with the reason and the supporting document. Firms are far more comfortable with a disclosed and documented oddity than with one they discover themselves in the statements you supplied.
Sign, date and keep a full copy
Sign and date the declaration, confirming the statements are true and complete to the best of your knowledge, and include your contact details for follow-up. Keep a complete copy with the same attachments — the identical enquiry will come again from the lender, the receiving bank, or a firm involved in the next transaction, and rebuilding the pack from scratch each time is what makes it painful.
Common mistakes
- Writing savings or personal funds with no breakdown, which guarantees a second round of questions and delays the transaction by weeks.
- Supplying a screenshot of a balance rather than full statements showing the name, account number and the whole period requested.
- Failing to mention a gift, so the funds appear from an unexplained third party and the file is escalated for enhanced checks.
- Answering source of funds when the firm also asked for source of wealth, and having to restart the enquiry with the full history.
- Sending money before the checks clear, leaving funds sitting in a client account that cannot be applied until the enquiry is resolved.
Frequently asked questions
What documents prove source of funds?
It depends on the source. Sale proceeds are evidenced by the completion statement, savings by bank statements across the accumulation period, earnings by payslips or accounts, an inheritance by the grant of probate or an executor's letter, investments by contract notes, and a gift by a signed letter from the donor plus evidence of their own funds. Ask the requesting firm which of these they require.
What is the difference between source of funds and source of wealth?
Source of funds is where the money for this transaction came from — this account, these proceeds. Source of wealth is how your overall wealth was built: a career, a business sale, an inheritance, investment returns over decades. Enhanced due diligence often requires both, and answering only the first is a common reason enquiries come back for a second and third round.
Why does my solicitor need to know where my deposit came from?
Because regulated firms are legally obliged to carry out customer due diligence and establish the origin of funds before handling them, under the anti-money-laundering regime that applies where they practise. It is not personal suspicion, and they generally cannot proceed without a satisfactory answer. Providing the breakdown and documents early is the fastest route through it.
Can I use a gift for a house deposit?
Usually yes, but the gift itself has to be evidenced — commonly a signed letter from the donor confirming it is a gift and not a loan, with no interest in the property, plus proof of the donor's own source of funds and their identity. Lenders often impose their own additional conditions, so check both the conveyancer's and the lender's requirements before the money moves.
How far back do bank statements need to go?
There is no single answer; firms commonly ask for three to six months and longer where funds were accumulated over time or the pattern is unusual. Rather than guessing, ask what period they need and supply full statements for it, including every page. Partial periods and cropped documents are the most frequent cause of the request being repeated.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.