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

[kiav]

We have two premium bonds accounts. One is in my name and one is in DD’s name. We have 50k in mine and 30k in DD’s.

we are now in a position to buy a home. We will need the 50k for a deposit and we also need the 30k for things like stamp duty, new sofa, to do a small bit of work that needs doing in the downstairs etc.

I have been told by a friend it’s illegal to use Dd’s 30k for this? This is money we have saved from our income but now our circumstances have changed we need it. Surely premium bonds should tell you this before you invest??

If it’s an account in her name then surely that is obvious that it is now her money?

It is either your money or your DD's.
You put it in your DD's name so you effectively gifted her the money. You can't ungift it.

But she is 5? When prizes have come out of it they are paid into our account

You've invested it in the name of a 3rd party. It's your daughter's money.

Assuming she's under 18, you can access it and spend it how you like.

Morally though, who did you save it for?

Yes it's hers. You've given it away.

How old is dd? Can she consent to gifting it to you? If under 18 she cannot. Ask solicitor.

You’ve effectively gifted money to your DD so of course you can’t just take it back to use on whatever you want. I don’t think this needs to be spelled out as it’s common sense?!

This is one reason I won’t be saving for my kids in their names, I want to have ultimate control over the money.

There’s a reason premium bonds are capped and winnings tax free. Unfortunately it seems like you’ve tried to take advantage of a loophole without doing your research and been caught out.

It's your daughter's money. It's in her name. You have purchased premium bonds for her

I just think it’s crazy as it’s obviously money we have tried to save for her but our circumstances as a family have now changed

If you manage it for her then take out of premium bonds into your account now. Then it s no longer in her name

That is money for your daughter. Don't you think you will feel guilty if you use that?

It’s because winnings are tax free so an individual can only have 50,000. The argument is You’ve effectively tried to evade that by having 80,000 by treating the additional 30 as yours, and still getting the benefit of receiving tax free prizes yourself when you’d already used your maximum 50,000. If there are two adults in your household you can each have accounts of 50,000 but now you’ve gifted it to a child.

I wouldn’t feel guilty for providing my child with a secure home. I’d just do my best to replace it before she was 18.

Their daughter needs a house to live in? Presumably they wanted to get around 50k limit. But they can dis invest and move to their own account and pay any tax on interest owed until they spend it. Dd too young to know

I think as long as you are also named on the account then you can withdraw the funds.

I really don't understand the way some people respond to these threads.

Just cash in the Premium Bonds. Transfer the money into your account and use it to buy the house.

You are on shakey grounds with this because premium bonds are a tax benefit so are limited in terms of how much you can put in. You should have put them in DHs name because when your solicitor does the mandatory money laundering checks and sees they were held in your child’s name but spend as your own money they will likely flag it as potential tax fraud.

even having her premium bond winnings going into your own account is shakey grounds. Legally those winnings are her money not yours.

Congratulations on being able to buy a house. You are putting a roof over your DD's head. I would ignore your friend. But try to replace her savings before she's 16.

You should never put money in to your child's name you might want to access. You can always have an account and mentally designate it for the child without effectively giving them the money.

It may well be possible to cash in the bonds and access the money but the OP would do well not to save in her child's name in future.

What's with the 'moral' postulating? That's not what OP is asking.

OP, you can freely withdraw your child's premium bond money, up until your child is 16.

Not sure what you don’t understand? The mortgage company will want to see the trace of where the funds came from and may well not accept funds coming from an account in a child’s name. What you’re advising the OP could potentially cause issues.

But can you cash in premium bonds bought in someone else's name? I would have presumed that the premium bond people and HRMC between them will have some way to stop people using this loop hole as you have. If you can I would expect HMRC to come knocking looking for the tax on her winnings.

You can, but as I said the mortgage company will request proof of funds/bank statements for deposit etc. and may not accept money coming from a child’s account.

Sorry, this is ridiculous. A lender will not care a jot that someone did this. It's a form of saving, and it belongs to the parent.

Well I just did a quick Google and it seems OP is entitled to use the money.

Morally though as OP has taken advantage of the tax free status of the winnings and on the face of it gifted the money to her child it looks really cynical to use her child in this way.