Told I can’t use this premium bonds money for our house deposit as it’s illegal?

They can "cash them out" but it's still the child's money, not theirs. They gifted it to her when they put it in her name. That is the legal position.

And, taking the tax free winnings and keeping them for themselves is tax evasion/fraud.

But no, no-one is getting locked up or paying a fine (no-one has suggested that at all). But if this money needs to be used for part of the house purchase that goes via the solicitor (the purchase itself, stamp duty etc) then the source will be looked into by the solicitor and it's very likely the solicitor will say it cannot be used (not because it IS money laundering, again, no-one has said that) but because the solicitor needs to check the source under anti money laundering rules.

Bottom line is - put money in your kids' names, it belongs to them. You may control it, move it, invest, cash it, etc, but it still belongs to them.

But you

Have missed the point that it goes into the parents account.

look at that all said without the need for caps, which makes you look like the five year old in the scenario!

I won’t engage with someone so ridiculous that they use caps lock in that manner.

embarrassing for you!

Of for goodness sake I just sent a screenshot of the account with my child’s name and the funds… I didn’t say all the garbage you just spouted…. Solicitor said fine and house sale went through

Exactly this, showed a screenshot of the account name and funds to our solicitors… not a problem and nothing flagged, as I have nothing to hide. you don’t have to believe me either.

I don't think she'll go to jail either but she's breaking the terms and conditions that she signed up for

You expect us to believe that you said to your solicitors, "This money is in my child's name, but it isn't really for my child, it's just so I can avoid some tax, so I'm using it to buy myself a nice house which my child will not have any ownership of," and the solicitors said, "No problem, I'll just sign off to say that this money which isn't yours is yours, congrats on the tax avoidance."?

I'm not sure any of these people have premium bonds, just withdraw it to your account it's fine

It is fine, my solicitors did not flag this was an issue

Look we all know she will do it and it will be fine :)

Exactly. PP's seem confused about the difference between behaviour that is legal, and behaviour that is easy to get away with.

Good we agree, however you might not agree that a sofa is benefitting the child, I’m indifferent to it and the OP thinks it’s benefitting her child. So 3 different opinions. The OP in the end won’t be going to jail for this.

Yes if I were POA for my mum and she was living with me I would have a hard time justifying buying a sofa for the whole family to use with her money. If it were a specially adapted sofa that my mum needed to be able to sit down easily then that is a different matter.

Exactly that.

Funny how the vociferous (and rude) poster is also the one who can't comprehend a simple sentence.

We are going round in circles here. As explained above it is not a matter of opinion. There are centuries of case law on when a child's assets can be used for their benefit. This problem is essentially the foundation of wardship - it is ancient. Were there to be a dispute a judge would give a determination of whether the money had been used to benefit the child or not.

Of course there is very unlikely to be a case here - it's quite easy to take money back from a 5 yr old - but that does not mean it is legal for the parents to simply do as they wish. Nor does it mean that the parents' view on what benefits the child determines their legal obligations.

Yes.

We are agreeing. I don't know why you're having a go at me. However you do agree when signing up to use it for the benefit of the child. Buying a sofa isn't.

I HAVEN'T EVER SAID YOU CAN'T CASH IN PREMIUM BONDS

OP just use it for the house… no one but various mumsnetters is going to bat an eyelid…. Not even solicitors!

Yes but you would determining what is for the benefit of the child as you control it… so therefore it’s a matter of opinion

No they would not. https://www.gov.uk/guidance/universal-credit-money-savings-and-investments#childrens-savings

The government understand that money in the child's name belongs to the child and not the parents.

Though no doubt there are measures to avoid this being used fraudulantly)

Well clearly you haven’t?!

Of course you can use premium bonds to pay for whatever you like... your own. Not someone else's

She is entirely correct. The terms and conditions quoted above explain that you can withdraw money for the benefit of the child (not yourself). Even if they did not, that is the standard legal position (see s3(3) Children Act 1989).

There are many situations in which people have control over the management of money that belongs to other people (power of attorney, trustees etc). The fact that they can mange that money does not mean that they can (legally) do what they want with it or treat it as theirs. The same applies here.

If the parents lost their jobs and spent their own savings and had to go onto UC, would the DWP consider the £30k to be part of the parents' assets and therefore refuse to grant UC? I suspect they would - in which case the parents would surely have to take the money out. So then surely the parents can take it out any time?

Questionable as you clearly don’t know what you signed up to.. and the legal implications of it

Well you’ll know that you can cash them in then!