A gift letter may explain the parties’ intention, but it should be supported by evidence of the donor’s source and the completed movement of funds. It is not a substitute for the financial trail.
Create an origin-to-business record
Connect the donor’s relevant source records to the outgoing transfer, investor receipt and subsequent business commitment. Explain account holders and any intermediaries. If the donor also receives shares or retains rights, include the corresponding agreements rather than allowing the letter to contradict them.
Obtain case-specific advice on the evidence needed where records are missing or the transfer has conditions. A gift letter records an intention and needs the surrounding evidence to mean anything. Build the record from origin to business use.
That begins with the donor's own lawful accumulation, documented in the ordinary way with income, tax, sale or business records, and continues through the funds sitting in the donor's account, the transfer itself, the receipt into the investor's account, and the onward payments into the enterprise. Each step should have a document and a date. Where the donor is abroad, allow for translations and for the possibility that records take time to obtain.
Where the amount was given in stages, present the sequence. The gift instrument itself should be dated at the time the gift was made rather than prepared afterwards, and it should reflect what actually happened rather than a tidier version of it.