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??

Op do you have a parent who is in a financial position who could "gift" you the money needed for the mortgage to avoid any issues with the conveyancing. Explain to them the situation and once the checks are done withdraw the 30k and repay them.

I have been told by a friend it’s illegal to use Dd’s 30k for this?

Why believe what a friend told you?

Go online and check.

I think you need to be transparent here at least in your own mind.

How has a 5 year old got £30K?

That's a lot of savings and presumably it's really yours but you've exceeded the limit for PB.

If one of my DD's accounts won the £1m or even £10k, the money would absolutely be for the family.

My DDs would hugely benefit from the additional money, whether that would be them enjoying a lovely holiday, or us saving money for them to have a house deposit in the future. Or using the money for a kitchen in our home, which they also get use out of.

You need £30k for your house sale, crack on and enjoy. I am sure you are always doing what is best for your child and family.

If it’s tax free then you might have some issues actually. The government are hitting down on people who do this without paying tax. You might have to pay tax on it if you then take it

why would the mortgage company want to see where the funds come from? OP is using HER premium bonds for the deposit and was planning on using DD's funds for renovations, nothing to do with the mortgage company.

Legally a parent or guardian can cash in premium bonds held under a child's name until they are 16.

There are no restrictions on what that money can be used for, despite the rubbish being talked on this thread.

OP, take the money out and provide your daughter with a home.

why are you assuming she can't use the PB?

The checks are to ensure there is no money laundering or dodgy deals.

Using PB belonging to a 5 year old doesn't fall into the same category.

We had to write a letter under a solicitor when we were gifted some money. They want to know the entire time

As someone said as long as your named as the account holder it's fine.

You need advice from an accountant, not a friend certainly not from a 'friend'.
Many good points have been made about traceable/anti money laundering/tax etc.
An accountant is likely to explain it simpler than anyone else.

who is gifting her money? She is using her own money for buying the house. What she renovates after is nothing to do with the mortgage company.

That's different.
We did that.
Common practice when giving to DCs.

Not the same as using PBs belonging to a minor.

BUT in any case, the child's PB are for stamp duty &renovations not the house purchase.

The money was just resting in her account.

Premium Bonds in the name of the child belong to the child. The child owns the value. The named Responsible Adult can manage the PB account on behalf of the child, including withdrawing moneys, but the money and the winnings belongs to the child.

The OP (and some PP) are describing patterns of behaviour that would be interpreted as the gift of the original Premium Bonds not being genuine.

PP are confusing the right of the parent to manage the PB on behalf of the child with being able to to WTF they want with cash given to a child. And if it wasn't a gift, it should not have been put in the child's name.

Oh FGS read the previous posts.

It's perfectly clear. NS&I permit parents to cash in PB from children under 16.

The money is needed for stamp duty and renovations.
Not a house deposit.

Reading skills here are appalling.

That’s what you get for trying to avoid tax!

LOL

Unless the child complains, how will anyone know where they money went?

You're not going to look good here but I'd use the money to give my child a secure home without any qualm.

You can always build up savings again but if you and your dh have decided that now is the time and you need the 30k to do it, then do so, just keep your finances to yourself, it's no one else's business.

Our solicitors paid all the bills including the estate again AND the stamp duty so they had all the money with checks as to where it came from. Dad gifted us cash and had to sign to say it was a gift.

Just... nonsense.

Premium bonds in a child's name are managed by their legal parent or guardian up until they are 16.

Legally, this gives the responsible persons the absolute right to withdraw the money and spend it however they choose. No ifs, no buts.

Now, you can make a dubious moral argument about the money belonging to the child, so maybe OP should ask the kid whether she wants have a house over their head or not, and report back?

you don't have to pay tax on winnings.

You're stretching the point a bit there.

Many couples invest savings in two accounts so that if one spouse doesn't pay tax, they avoid losing interest through tax.

However, tax is not paid on any gains from PBs.

That's why there is the £50K limit.

Because there is a limit one person can have it is fraudulent to use someone else's account to get extra for yourself

If you were saying that you wanteed to spend the money on fast cars and frivolous fun, i'd say that it was a bit morally questionable......but a house that your daughter will benefit from and furniture she will use, nah. Especially as she'll likely benefit from inheritance in the future.
I'd probably try and re save it for her, but not at the expense of family holidays, hobbies and activities.

Don't be ridiculous.

It's not illegal at all.

Families can spread their savings and investments as they choose.

Most couples invest in several ways if one is a higher tax payer and the other isn't even reaching the limit for tax on the interest gained from savings.

What tax?

Premium bond winnings are tax free. And even if they weren't - income generated from investments of the parents in the name of minor children are taxed on the parent, unless under £100 a year.

I'm no expert but is it not like child ISAs?

I can put any amount I like into an ISA for my kids but I can then not withdraw it. It is to stop people 'hiding' their money in their underage kids names so they can claim benefits over the thresh hold or to avoid tax etc...