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??

I'm now thinking if parents are just using it as an extra tax free savings account and using the money to buy houses etc they should just do away with them

To begin with yes but not after it was given to the child. Would you expect to reclaim a gift you freely gave to a friend?

Actually it’s not always the best advice. I have put money in an account in DD’s name so it is not marital money and cannot be included in a divorce.

I had money in my own name at 18 (in the region of £50k some decades ago) as my dad wanted it to go to me. I managed it entirely properly and bought a house at 22.

If the money belongs to you, then you were committing tax evasion by putting it in you DDs name. This is a crime.

If the money belongs to your DD, then you are stealing her winnings from her each month If you are having them paid into your account, and if you use the money for your expenses such as stamp duty for a house not in her name or buying yourself furniture then you are also stealing her capital. Stealing your childs money is a crime.

So which is it? Your money or her money?

(You absolutely have the ability to legally withdraw her money from her PB account as her responsible person, but her money has to be managed in her best interests. Paying for your sofa or your stamp duty bill is obviously not in her best interests!)

lol you can’t compare this to gifting a friend…. Actually that comparison is BS

Yes because the presumption of advancement applies to transfers to your minor children, but not to friends. It is much more difficult to argue that it is not a gift to your children than friends.
Of course your child is less likely to be able to object.

If the friend was going to live in the house, it might not be that unreasonable.

If they had no stake in ownership of the house, that would be pretty unreasonable.

This.

No, it wouldn't necessarily. It would go to the joint owner if owned as joint tenants. Otherwise it would go to whomever it was left to in the will.

Do you understand premium bonds? It’s not interest. It’s winnings.

Do you understand Premium Bonds?

There's a maximum investment of £50K per person in Premium Bonds, as winnings are paid tax free. If someone holds £80K of their money in premium bonds they are tax evading, even if they nominally put some of their money in someone else's name.

Basically, it's not legal to pretend that some of your money belongs to someone else to gain a tax benefit, which putting it in your child's name, whilst still treating it as if it's yours is doing.

Including ISAs?

I mean £30,000 in premium bonds must be making a whole heap of difference!

no wonder the country is on its knees!

Yes it's also illegal to put your money for your benefit into someone else's name to get an ISA tax avantage you're not entitled to.

Up to your limit is fine and legal. Any of your money over that (whomever's name irs in) is illegal tax evasion.

A few guidelines

You know that the divorce settlement can be reopened if that's discovered, right? I know that this is Mumsnet but I'm still surprised that you're opening admitting hiding assets in divorce proceedings and making a false declaration on Form E (which is perjury). Plus of course the fraud when opening the premium bonds account, but that's probably the smallest issue!

Please tell me people get this is illegal?!

@stammergreetings ….

@Cobblersorchard isn’t even getting divorced or is divorced from her child’s father. Why do so many people struggle with reading on here.

I have put money in an account in DD’s name so it is not marital money and cannot be included in a divorce.

This was in response to:

You should never put money in to your child's name you might want to access.

I don't know @Cobblersorchard personally so I don't know if she has divorced or was just saying she has been arranging her assets in preparation for divorce and is just planning to commit perjury, but hasn't yet done anything but commit fraud when opening the account. I admit I did jump to the former as the explanation, and maybe shouldn't have done but I'm not struggling with reading.

I’m not getting divorced!

The money has always been saved in DD’s account, monthly, since she was born. It has never been a marital asset it has always been hers and my DH is fully aware. It’s a large amount (5 figures).

Should I get divorced (wouldn’t rule it out-everyone in my family is) the money is DD’s and my awful with money DH can’t access it or spend it. He would given half a chance.

My dad saved money for my brother and I in our own names, he and my mum did divorce- but it wasn’t hidden my mum was also well aware of the savings.

I didn’t mention hiding assets, just that it is a consideration to give money directly to children if you wouldn’t want it being included in a future divorce. I will inherit a lot and a big chunk of that that will also go direct to DD if I am married at that point.

Ok so this is your DD's money, sat in your DD's account and you do not have any intention to use that money for your own purposes? Obviously thats fine but it's completely irrelevant to the post you were responding to which was about what to do if (like this thread) you are saving money for a child, but might want to change your mind later on whether it's actually the child's money.

It's terrible advice to say that a reason to put money you might want to access for your own purposes later into a child's name is to keep it out of divorce proceedings. Which is what you said if you read the post you were disagreeing with.

Surely you can just take it out of her account and transfer it to yours? You are investing it for her in the house anyway and when you die it'll be hers anyway.

Don't feel bad about. She's five

We had to use our daughters (not as much as yours £10.000) when she was 5 tomake our house safe after some things happened. We paid it all back and started saving again for her when we could.

A JISA is completely different. You can't get the money out only the child can when they are old enough. Unless they die or are diagnosed with a terminal illness.

In my mind, this could be construed as an attempt to "get round" the £50,000 limit. If the money "theoretically" belongs to you, how would you like it if you won a million pounds... then told you were disqualified because you have gone above the limit and YOU are holding £80,000...???

That’s about as likely as me waking up tomorrow and finding I’m 18 again.