Premium bonds £120k Split between Family of 4 ?

dorsetjohn_3

I have £120K from a house sale . Invested on internet accounts getting approx 2.2% after tax and looks like dropping in the future . Dont want to tie it up for a long time incase we need it to buy ? (probably wont )

Now I was thinking of taking a chance by investing it in premium bonds
The question I want to know is .............

Am I right in thinking , that my wife and I can have a holding of £30K each

Also is it legal to buy £30K for each of my 2 children . My son is 17 and has the same surname as me and my daughter is 23 and has a different surname to me

Just wondering once you cash the money in how do you put it back into your account if national savings issue the cheque in my childrens name

any thoughts would be appreciated on this situation

Lokolo

dorsetjohn wrote: »

Just wondering once you cash the money in how do you put it back into your account if national savings issue the cheque in my childrens name

You don't, its their winnings, their money.

You can gift the money to them and tell them to put it in PB and then hope they give it back if you ask for it, but I wouldn't if I was them.....

Same with your Mrs.

PBs have an average return of 1.8% just so you know.

dunstonh

Now I was thinking of taking a chance by investing it in premium bonds

So, you want to come out of an account paying 2.2% net of tax to go into a lottery account that pays zero interest but averages around 1.8% in prize money (and thats after you qualify to be included in the draw and not before).

Am I right in thinking , that my wife and I can have a holding of £30K each

Yes.

Also is it legal to buy £30K for each of my 2 children . My son is 17 and has the same surname as me and my daughter is 23 and has a different surname to me

If you dont mind gifting it to them so it becomes their money its fine. Of course, you run the risk of them drawing it out and spending it or if they die, the money goes to their beneficiaries which may not be you.

Just wondering once you cash the money in how do you put it back into your account if national savings issue the cheque in my childrens name

They will have to gift it back to you.

edit: Lokolo beat me to it...for a change

dorsetjohn_3

Lokolo wrote: »

You don't, its their winnings, their money.

You can gift the money to them and tell them to put it in PB and then hope they give it back if you ask for it, but I wouldn't if I was them.....

Same with your Mrs.

PBs have an average return of 1.8% just so you know.

Yes , But in the rare case they want to give me the money back how do I go About putting it back into my and my wifes joint account ?
thanks

Lokolo

Cheque? BACS? CHAPS? Either of them... just like how you gifted the money to them, they do it back. They bank the money, then give it to you. You can't cut out the middle man so to speak (if thats what you mean you want to do?)

dunstonh wrote: »

edit: Lokolo beat me to it...for a change

Hehe.

dorsetjohn_3

dunstonh wrote: »

So, you want to come out of an account paying 2.2% net of tax to go into a lottery account that pays zero interest but averages around 1.8% in prize money (and thats after you qualify to be included in the draw and not before).



Yes.



If you dont mind gifting it to them so it becomes their money its fine. Of course, you run the risk of them drawing it out and spending it or if they die, the money goes to their beneficiaries which may not be you.



They will have to gift it back to you.

edit: Lokolo beat me to it...for a change

Hi
How do they gift it back to you ? do national savings issue my children a cheque ? Once the cheques have cleared in my kids accounts how is the gifting done back to us ? are there any tax implications and will my bank ask any questions putting 2 cheques into my account for 30K each
Thanks

Lokolo

Only tax implications are IHT (inheritence tax) and I am not quite sure how thats all calculated so can't tell you what would happen - and as long as they are fit and healthy and you don't have severe bad luck (touch wood *knock knock*) that should be fine. Same for you but your mainly concerned as you gifted the money. If I remember correctly, IHT can go back 7 years worth of gifts.

See my previous post. NS&I (National Savings and Investments) issue a cheque for son or daughter or whatever, they then bank it. They can then give you the money either a) Cheque b) BACS c) CHAPS d) Cash, just like a normal gift.

rb10

dorsetjohn wrote: »

Yes , But in the rare case they want to give me the money back how do I go About putting it back into my and my wifes joint account ?
thanks

Any money they win will be sent as a cheque, to them, in their names. They will then have to put this into their account. They can then, if they choose, give this money to you.

But personally, if I had £120k, I'd want to make the most of it. With that much money, you could get a serious amount of interest in a savings account.

freddysmith

Here's a link to Gifting and Inheritence Tax
http://www.inheritanceissues.co.uk/exempt-gifts.html

£120,000 should make about £3000 net at the moment

dorsetjohn_3

rb10 wrote: »

Any money they win will be sent as a cheque, to them, in their names. They will then have to put this into their account. They can then, if they choose, give this money to you.

But personally, if I had £120k, I'd want to make the most of it. With that much money, you could get a serious amount of interest in a savings account.

Thanks everyone so far for the replys

The interest on 120K internet easy access account is approx £2800
Would it not be better to take a punt on premium bonds for a year ?
cant find anywhere else that has alot better rate ?

Lokolo

£30,000 over 10 years you have:

1 in 5,401 in winning at least £1mil

x4 means you've got ~ 1/1350 in 10 years of one of you 4 winning £1mil.

But yeh I can see your point, you have £120k, where do you put it? I would go splash it on something you've wanted to do tbh. I'm only saving so I can have m y own businsess when I am older.