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??

It isn't fraud.

Jesus wept.

When buying Premium Bonds you have the option of the winnings being used to buy more bonds or paying out into the nominated account. The nominated account defaults to the parent's account that was used to buy the bonds.

If it was fraud, do you not think that NS&I might try and prevent it?

Parents have the 100% right to control and spend money on behalf of their children.

Just cash them in and get on with buying your house and stop discussing important financial matters with mates.

It’s really none of their business and unless they’re a qualified financial adviser or solicitor, is there any benefit in asking their advice given they’re talking bollocks on this occasion?

Sounds like tax evasion to me....

Get a life honestly

how much tax has been “evaded” on the interest on £30k? A few quid?

The premium bond rules are actually pretty lax for children- I was surprised tbh as something like a junior isa is much more clear-cut and can’t be access until 18 once the money is in.

Essentially though you have been trying to dodge tax by saving your money in your daughter’s name. I have no idea if there are mechanisms to pick up on that or not given you’ve got quite a chunk in there and want to use it for your own house purchase.

The 50K you are using for your deposit is in your name, yes? So no problem with the bank using that money as it is your own.

The Stamp Duty - wil anyone need to check where that came from? I doubt it - it's a few years since I last purchased a house but as far as I can remember it was just a payment. The rest you can take out in bits for the works as and when you see fit.

I don't see it as your DD's money - unless you told her it was a gift? It's just a way to save and (hopefully) earn some interest in the form of winnings. It's not even guaranteed that you will win any money .

Perhaps to make you feel better about it - you could save any winnings in a separate account number of PB to start an account for DD.

If you have gifted money to your child you can spend it on their behalf on things that benefit them.

Ah ok, misread.

Ok if it’s for stamp duty/other disbursements that the solicitor will need to pay, they’ll also need to satisfy themselves as to the fund source for AML.

If it’s for furniture etc she is going to pay for out her bank who would honestly know?

I think the issues will come when you have to show where the money for the came from, as others have said. Even if it isn't the case, it'll just look like you've saved in her name to avoid tax. ETA: if you're not using it for the deposit it may not be an issue. I wouldn't use it myself but that's your choice.

I have separate accounts in my name for my kids. I would never take it as it's their money, but I wouldn't have spent it responsibly at 18 so want to gift it to them when I know it'll go to something worthwhile (like a house deposit, car, etc.).

@kiav if your dc won the top prize you as a parent can spend it as you like.

Ignore the pp's insisting you are either legally or morally wrong, you know what's best for you family.

If your sole intention is to buy and furnish a home then that is a benefit to your dc.

The solicitors are obliged to track the source of all funds. Even if you move it, they will need to know where it came from and how it was accumulated. So if you want to use any of that £30k for legal costs etc rather than just IKEA etc then you will need to provide tracking details.

I highly doubt the solicitor will be interested in the fact it was in an account in the name of your 5 year old or that it's potentially been a tax dodge. They just need to understand that it was excess income etc and that you can evidence that and it's not come from a dodgy scheme in Cape verdi or from selling drugs.

I don’t understand why some people are trying to guilt trip the OP. She can’t afford for her 5 year old to have 30k savings when they don’t have their own house. They’re providing security for her.
I don’t know much about premium bonds but just googled this to see that the OP is entitled to use the money. It’s her money. It’s not as if DD did some job or something and got money through it or an inheritance for her and the parent is now trying to use it, that’ll be stealing.
What the op wants to do is use her own money saved in her child’s name which she can legally take out to benefit the child and the whole family. It’s her money.

The answer to this in pretty easy to find on the NSI website (I looked last week in case my DD’s account won £1m!). Until the child is 16 the named adult on the account can withdraw the money. End of.

Did you put it in her name because you reached the limit for your own name and you never intended to give it to her?

The issue you have now though, is that the solicitor will want to see proof of funds and this is where it might get tricky.

That’s all very well but the solicitor will see it was not in her name. I don’t know how this may affect using it - I expect it will be fine but it’s probably best to check with her potential solicitor.

Well I don't think law works like 'but she's 5' then ''oh that makes it OK then'

It's not your money

Some of the replies on this post - people are absolutely ludicrous. 😂😂😂😂

As she is a minor you are her trustee. You can therefore make decisions about her assets. So legally you can cash in the PBs. Using the money to secure a roof over her head is fine legally for a trustee to apply assets to. And morally too since it was your money to start off with. So go ahead OP, and good luck to you 😊

There's really no point arguing on here @kiav
I am not familiar with PB being held for anyone under 18 but there will be clear guidance over what you as their parent can do.

Either you have access to them and can withdraw them, or you don't.

Premium Bonds /NSI will have information online.

No point asking here - read the rules.

But to refer to another point raised is this money really for your DD or have you set up the account in her name because of the £50K limit on Premium Bonds?

This is entirely possible - I have no idea - but do you have a link to a legal source which says how parents can spend their child’s money?

This is so silly.

It is presumably the OP's money unless it's been a gift from family or friends- that's the crucial bit.

As I said, NS&I will have rules on accounts for minors and their parents/ guardians.

Read those.

This thread keeps on giving. Honestly - all the posters jumping on the moral bandwagon - the woman is trying to buy a house for her and her daughter to live in for f*ck's sake!

It doesn't matter if it was in her child's name.

It's clearly not money laundering which is all that needs to be proved for house buying.

DH cash in DD's premium bonds, as she was too young to have them totally in her name, he was named as something either trustee or just parent. No one queried it

No, they put money in their child’s name to avoid tax. They would have used that money for a deposit on a house anyway, so where is the benefit to the child?