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??

Why does large amounts of money always have to be about inheritance…..🤣

It was an example.

Source of wealth: my child's premium bonds which I've put money into from my hand car washing business will probably ring more alarm bells

Yeah but if you read her post she just said it’s in her child’s name… she didn’t write the intention of what the £30k was for… she never wrote it was for her future etc…

Benefit is not the same as "basic standard of living".
Clothes, food, housing - all expected to be provided by the parents or carers.

Money in the child's name, to be used for their benefit, more like education support, e.g. private tutoring.

Haha that’s quite funny!

The legal default, no matter what was in her head, is that money in a child's name from a parent belongs to that child.

You have to jump some high hurdles to get round that. And "because I wanted another tax free account and had maxed out my own" is unlikely to cut it.

Can't work out why they didn't put it in the DH name, but there you go.

Presumably your daughter will be living in the house and sitting on the sofa, so as long as she is benefitting from it, then surely it's ok....?

Yeah I won’t speculate on the DH/ partner situation.

im not sure about the hurdles you are talking about? As in how did she manage to open a child’s premium bonds account? Because that’s relatively easy.

Sounds okay to me…. But what do I know… to many people that’s not a benefit at all these days

It's fraud for them to keep the money, tax free.

It's not fraud for it to go to their bank account, because their child probably doesn't have a bank account. But it's fraud for them to then use it as if it's their own money - it's not, it's the child's. And as the parents have no right to another tax free investment into the bonds, it's also tax evasion.

And no, I'm not jealous, my PBs are maxed out, as are all my tax free savings vehicles. And I manage a trust for my young niece.

The moment you put money in your child's name, it is theirs. The only benefit to doing it is if you have a lot of assets and it will reduce the taxable payable to do so.

As a pp said, if there's any chance you might ever need that money you should not have given it to your child.

There isn’t a high hurdle to gift your child money. The high hurdle is to rebutting the presumption of advancement ie the presumption that a transfer from parents to minor child is a gift.

Being able to live in someone else's house when that person has a legal obligation to house you and sitting on their sofa that they chose is not a benefit.

If the parent invested that money in a house, and the share that the child paid for remained in their name, that would probably be in the child's best interests.

That would mean that when the child reached 18 they could request their £30k back+ equity and the parents would either have to fork out or sell it, but they don't want to do that, because they want it to be their house, just paid for out of the child's money.

Exactly. A benefit would be something like a fancy optional school trip they otherwise wouldn't be able to afford.

So say you manage your child’s account and £25 of their winnings go into the your account which is legal. Are you allowed to spend the £25 if it benefits the child?

Exactly this!

This is one of the most ridiculous threads I've seen on here.

I know someone who put their family savings into her 3 kids savings accounts, to benefit from tax free interest, and takes it out and uses it when needed to buy cars etc. Not premium bonds, things like junior saver accounts. Even that isn't illegal!

We have very different ideas of what "benefit the child" means. If you mean is it OK to spend it on something you are legally required to provide to your child, that's not a benefit to them, that's a bare minimum standard that you should be meeting without using their money.

If you mean is it OK to buy something extra specifically for your child above the minimum standard of care expected of a parent, like a ticket to the zoo or a toy they've been wanting, then that would probably be acceptable.

The only person who could say for definite would be a judge, if one day the child decided to take the parent to court and accuse them of misusing the funds, and it would be considered if a reasonable parent would consider the use of the money to be in the best interests of the child.

If OP was that desperate to get around the 50k cap for PBs shed have done what couples do and put the rest in her DH's name. Same thing.

A car for the child?

That’s why it’s all subjective and you can’t really check each purchase and even the solicitors thinks it okay…. Then I say crack on

That's tax avoidance and it is absolutely illegal.

100% agree with this.

I suppose you could argue spending it on school uniform might be ok if the family are generally hard up

Let’s also be really real here! It’s highly unlikely that her 5 year old child would take her parents to court! I’m not saying it would never happen but 99% sure.

they probably don’t even know…
my children have no clue about premium bonds yet. One is also 5

I f you are the nominated responsible adult you can withdraw the money see this dontdisappoint.me.uk/resources/finance/can-i-cash-in-my-childs-premium-bonds/

When she's 18 she might