Jurisdiction(s):
United Kingdom

Source of funds vs source of wealth: UK legal sector guide to common AML/CTF misconceptions, client enquiries, and CDD/EDD duties under the Money Laundering Regulations 2017

Published by a LexisNexis Practice Compliance expert

Precedents

Source of funds and source of wealth sits within the anti-money laundering, counter-terrorist financing and counter-proliferation financing regime, yet the topic is often poorly understood.

This guide highlights frequent myths, including:

Source of funds and source of wealth are identical
My role is only to verify the customer’s identity
I must prove the money is legitimate
If money originates from a UK bank, it is automatically clean
It’s impolite to ask
Risk assessment and software alone will resolve the issue

Source of funds and source of wealth are the same

They are not the same; while there is significant overlap, they are interrelated and should not be considered in isolation.

The Financial Action Taskforce (FATF) provides the following definitions for these terms. Source of funds refers to the origin of the specific funds or other assets that are the subject of the business relationship (e.g. the amount being transferred as part of that relationship). This goes beyond merely knowing which financial institution the funds may have come from...

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Web page updated on 22/05/2026

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