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As cryptocurrencies continue to reshape the financial landscape, their use in UK property transactions is gaining momentum. With recent research showing that 12% of UK adults now own crypto, it is no surprise we are seeing this wealth flow into everything from modest family homes to large-scale commercial investments. For property solicitors, agents and wealth advisors alike (who are at higher risk of being unwitting facilitators in laundering criminal proceeds), navigating the intersection of blockchain assets and UK property and Anti-Money Laundering (AML) legislation brings both exciting opportunities and complex challenges around legitimacy, regulation and long-term integration into the market.
The Legal Landscape: Solicitors and AML Compliance
One of the most critical considerations for solicitors acting in any property purchase is compliance with AML regulations and regulatory obligations. Transactions funded in whole or part by wealth that is the proceeds of investments into crypto can make it harder to be satisfied as to the provenance of funds, which is a central requirement under AML legislation. Transparency becomes critical: solicitors who intend to handle the funds must dig into the cryptocurrency’s origins, review the client’s history of transactions and sometimes work with forensic blockchain experts.
To satisfy AML checks, clients can expect to be asked to provide detailed evidence tracing their crypto profits, including for example:
- Evidence of the initial source of fiat funds which were used to acquire the cryptocurrency
- Wallet histories showing transactions over time
- Records from crypto exchanges confirming deposits and withdrawals
- Proof of conversion from cryptocurrency into fiat currency before transfer into bank accounts
- Documentation of compliance with HMRC tax requirements related to crypto gains
Lenders and Mortgages: Crypto as a Source of Deposit
Using crypto profits as a deposit or source of funds for a mortgage adds another layer of complexity. Many mortgage lenders have yet to develop clear policies on crypto-originated funds. They often require:
- Proof of a clear audit trail for the deposit
- Evidence of tax compliance
- Full AML checks on the source of funds
Because of this, buyers intending to use crypto profits for mortgage deposits should engage with lenders early to understand their requirements. Working with solicitors and brokers experienced in crypto-related transactions can facilitate this process.
How to Prepare for a Crypto-Related Property Purchase
If you or a client are planning to buy property using cryptocurrency profits, then proactive preparation is essential:
- Maintain Detailed Records: Keep meticulous transaction histories from exchanges and wallets, including dates, amounts, counterparties, and conversion details.
- Engage Specialist Advisers: Work with solicitors and financial professionals familiar with crypto. Their expertise can smooth the verification process and avoid unnecessary delays.
- Meet Tax Obligations: Ensure all taxable crypto gains are properly reported and paid to HMRC before commencing the property transaction.
- Be Transparent: Be ready for scrutiny to satisfy AML requirements by providing a clear and verifiable source of funds. This transparency reassures solicitors, lenders, and regulators alike.
- Plan for Conversion: Recognise the crypto will likely need to be converted into fiat before completion, so consider timing and market volatility carefully.
Looking Ahead: The Future of Crypto and Property in the UK
As digital assets continue to mature, the real estate sector is gradually adapting. Increasing awareness and regulatory clarity will likely encourage more widespread acceptance of crypto-derived funds in property transactions. Meanwhile, solicitors and lenders are improving processes to handle these novel payments safely and compliantly.
For now, buying property with crypto proceeds in the UK is feasible with the right solicitors but requires careful navigation of legal, tax, and practical hurdles. With the right advice and preparation, clients can confidently leverage their crypto wealth to invest in UK real estate.
About the authors
Dan is a Partner in our Real Estate team. He has experience in most areas of commercial and residential real estate matters, acting for national and SME developers, local authorities, landowners, borrowers, lenders, investors, landlords and tenants.
Anna is an experienced general criminal law practitioner who has represented clients in respect of a wide range of allegations, from drugs possession to serious sexual offences. She has extensive experience, and particular interest, in dealing with vulnerable clients, whether by virtue of age, substance abuse issues, personal circumstances or mental health.
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
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