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 is the parent's money, they should be paying tax on any savings not included in their own £50k premium bond limit.

We have run this passed solicitors in the past and there are no red flags….. it is all legal

It’s a frigging loop hole unfortunately or fortunately

They are putting their money into premium bonds in their daughter's name because they have reached their own limit. If the money is not their daughters, then they ARE committing fraud.

Nope they are allowed to create an account for their daughter however as they are under 16 they are not legally allowed to manage to their money. The parents are so they can do as they wish. It is not fraud

Good grief. The OP is not stealing and IS spending the money for the benefit of her child - to put a secure roof over her head for the rest of her childhood and so she doesn’t have to constantly move house (and possibly school) at the whim of a landlord while renting!

She will benefit from that for the next 15-20 years probably by which time the OP may well be close to paying off any mortgage so may downsize when the DC leave home and give her money for a deposit of a home of her own or leave it as an inheritance. The money is still there, just tied up in a house.

It was the OP’s decision to put it in the child’s name and her circumstances mean she now needs it for the benefit of the family. From a morality standpoint, I might have a different view if it was savings from a grandparent etc, or the child was a teenager and knew about it, but it’s not. If the OP hadn’t put it in the child’s name it would be the OP’s money.

The maximum allowed for an individual is 50k of PBs, but the OP currently regards themselves as having beneficial ownership of 80k of PBs.
By parking the extra £30k which they obviously regard as still actually their own in an account which in their DD's name, the OP has left themselves open to accusations of having done that for the purposes of exploiting the tax-free nature of that specific account, else why not just put the 30k in a cash savings account in their own name, receive interest and pay the tax on it ?

People often talk about putting a house or money or whatever 'in someone else's name', but there is no such thing. If your adult son or daughter's name is on the deeds of the family home, it is their house to do what they like with. Same with money put into a bank account or premium bonds - they belong to the child, not to you. You might get away with moving the money into your own account and using it for yourself, since you are the custodian of their money, , but best not give it to the child in the first place if you need it for yourself.

Managing someone else's money is not the same as owning that money.

No they can't. They've agreed to manage it for the child's benefit. They can't go and spend it all on beer for instance.

It was her (the parent) money to begin with

Yes. It's copied from their customer agreement that everyone who takes out premium bonds says they have read and understood

Questionable on spending it on beer lol

but definitely legal if the mother wants to spend it on prosecco

now morally I’d prefer the house buying option

As soon as you give it to someone else it is no longer your money

I’m afraid as the legal guardian, you control the money….

Just cash them in then it's cash ..

Presumably you put it in her name as you had the maximum amount

Yes I'm not denying that

Me too! I remember a thread about a family literally about to be made homeless and the poster wanted to use some of her toddler son’s savings as a deposit for a rental- people telling her how awful she was and that it was “morally wrong” as the money was in his name. I mean FFS, they were being put out onto the street!

I know but some people are mixing up what is morally right and what is legally right and it just winds me up how stupid they are.

so having legal control means you have the power to do whatever with the money regardless of what you think benefits the child or not based on your opinion

No you don't because you agreed to legal terms and conditions when taking out the financial product. If people don't understand what they are agreeing to they shouldn't be ticking boxes saying they do

The voice of reason 👏

What on earth are you talking about? You clearly don’t have premium bonds for your own children? You are making stuff up? Oh my god

It's about tax evasion. You are only allowed to put a max of £50k into premium bonds as the winnings are free of income tax.

Yes I do.