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??

Yes but the reason for doing it was tax evasion. You can't get the benefits of it being your daughters money but then spend it yourself.

Either it's the daughters money and no tax is due or it's the mothers money and tax is due on winnings. She can't have it both ways.

Your conveyancer will ask for proof of where any money used in the purchase of your house comes from. As they will pay the stamp duty on your behalf they'll need to see the account the money comes from. If you transfer it into your account they'll want to see the account you've transferred it from which will be in your daughter's name. So they may have an issue around Money Laundering legislation.

Solicitor/lender will need to know where the money is from for money laundering purposes. What’s the worst that’s happened here? That the £30k would maybe have attracted some tax on the interest if it had been in the bank instead?

I don’t know how much of a big problem that is likely to be, but it doesn’t seem that heinous. Speak to your solicitor OP.

The point is there is a cap on tax free allowances and it looks suspiciously like this is what’s happening here. It may not be of course, but I can’t see the point of putting £30k away for your childs’ future if you’re going to withdraw it to afford a house that would otherwise be beyond your means.

OP isn't using it for the deposit.

My solicitor asked for proof of funds and it was premium bonds under my child’s name. They were absolutely fine with that as our children are under 16! I’m going through the process now and it is 100% safe and legal.

end of

go buy that house for your family OP and ignore all other posts

There is no tax payable on gambling winnings. Premium Bonds are a form of gambling.

I have purchased Premium Bonds in my childrens' names and I am free to sell them and transfer the money back into the nominated bank account - which is my current account.

Shouldn’t be an issue though as the50k deposit for the mortgage is coming from her account. The 30k is for stamp duty, furniture etc. mortgage company won’t need to see that.

I'm interested in your motives in putting the money in your DDs name, was it because you had maxed out your holdings and wanted to benefit further from tax free winnings? Was there ever an intention that the money would be given to your DD when she reached maturity?

I just can't get my head round why you'd have put all of that in premium bonds....

Where did the £30k come from? Eg if other people gave your DD the money then that's more difficult. If it's money you've saving then I would have no hesitation using it as long as I could replace it over time and before she needed it (eg uni etc).

You have been defrauding HMRC re the tax free interest, but it's hardly Al Papone territory.

Might not pass money laundering tests though.

All gambling winnings are tax free. There is no limit to how much you can win tax free in a year - e.g. Euromillions.

Buying children Premium Bonds and then selling the Premium Bonds is not tax evasion.

the daughter might appreciate having somewhere to live? House could also at a later stage be inherited and be worth more than 30k.

She's 5 - you are her guardian, you can spend that money as you wish.

But if the 30k is for stamp duty/ decorating then money laundering checks don't apply right? None of the mortgage company's business where the money comes from as it's not compromising any of the purchase price of the property

People are crazy! I save money in all my kids premium bonds accounts and take out when needed! Just cash them in!

She’s 5. You can definitely do this.

Circumstances change, don’t listen to all the posters criticising you for using it.
You can do whatever you want with it so just get it out and enjoy your new home.

There's an absolute cap on the amount any individual can hold in Premium Bonds. They've maxed out their individual PB account at £50k and put an extra £30k into the daughter's name. The original intent might have been for the benefit of the daughter, but the reality is that they've been siphoning off the winnings to the parent's current account and now the entire value of the daughters PB account is to be used as a general pot of money for the move. It's fraudulent use of the specific tax free nature of Premium Bonds.

Cash in your £50K only
Use that for your deposit, then once house purchase gone through , cash out the £30K in your daughters name

@Portalsalways

’the child isn’t responsible for enabling Op to buy things for a house.’

Absolutely howling at this comment 😂😂

yes, I will tell DD to jack in her well paid job before she turns six and to stop funding her parents’ home.

Lots of people do this. Its fine.

You can’t “save money under your kids names”. That’s not a thing. that’s implying that it remains your money.

What you can do is gift money to your kids, invest it for them, and keep yourself as the administrator.

You can then take that money away from the kids. But be aware, as unlikely as it may seem, when your kids are adults they would be within their rights to pursue you for return of those funds!

I save for my daughter in premium bonds. Its my money that I hope to gift her when older.. if I needed if, I'd take it. Its not money others have donated to her. Premium bond rules allow you to put it in your own account. You could invest elsewhere if wanted. Not illegal at all

I don’t know the legality of spending your child’s money, but the deposit has to come from the house owner’s account. The solicitors will check. Just bounce the money in there.

I paid a deposit directly from my business (just for convenience- nothing shady) and ended up getting the money back off the solicitor, then into my account, then the solicitor again,

Morally, though, you owe your daughter £30,000 plus interest every year which should be held in trust until she reaches an appropriate age.

I reckon that’s about £200 a month until her 18th into a child isa.