Property funds in child accounts

SuperCommuter

Hello! I'm a cash buyer looking to buy my first home this summer or autumn. The cash is from 10 years of employment savings. A decent amount of that money is held in accounts in my baby daughter's name where i am the sole named adult of the account and have instant access (so not Junior ISAs).  

What i'm not certain about is if this will cause an issue when determining proceedability by EAs and, more importantly, proof of funds when i approach a solicitor? I have 2 child bank accounts and premium bonds in her name. The statements are addressed to me as the sole responsible adult with her name listed as the child. There is no independent online banking login for her accounts: they are listed alongside my adult accounts when I login to online banking and NS&I. In all practical senses I am the only person with access to these accounts. 

Is this acceptable as proof of my funds given I have instant access to the accounts and the money came from other accounts of mine? I really don't want to move all this money to accounts in my name and then sit on it for 6 months. I earn around £80 on average per month from her accounts (NS&I prize dependant), so this will mean forgoing a sizeable amount as I've exhausted all my short term cash saving options.

AdrianC

You have given the money to your daughter.
You, as adult, can manage her money on her behalf, because she cannot.
It is not your money any more.

greatcrested

SuperCommuter said:

Hello! I'm a cash buyer looking to buy my first home this summer or autumn. The cash is from 10 years of employment savings. A decent amount of that money is held in accounts in my baby daughter's name where i am the sole named adult of the account and have instant access (so not Junior ISAs). 

My guess is that you have arranged it this way as a tax evasion measure (which of course is illegal).

The alternative is that the money was a gift from you to your daughter, in which case it is not your money any longer.

As trustee for your daughter, you have a duty to save/invest/spend your daughter's money in her best interests. Now, it may be that you determine that it is in your daughter's best interests for the money to be invested in a property - and that may be true.

But if so, you should ensure that the house is owned and held in a properly set up Trust in your daughters name. Your conveyancing solicitor (not a cheap 'conveyancing warehouse') should be able to arrange this for you.

SuperCommuter

My guess is that you have arranged it this way as a tax evasion measure (which of course is illegal).

This is not tax evasion. I'm well within my personal allowance for savings interest. I did it this way in an attempt to get a return on my housing deposit. I held the full premium bonds so couldn't increase my holding under my own name. I previously held my deposit in a Nationwide ISA but that interest plummeted from 1.4% to 0.3%. What was i supposed to do? Accept this and see my savings eaten away by house price inflation?

I have no moral problem with this arrangement. This money is to buy a house for my family (including my daughter) so that we're out of insecure rented accommodation and she has a stable upbringing. 

SpiderLegs

 Not using premium bonds as a mechanism to earn interest would seem to have been a better option.

wilfred30

Well, go ahead and try it then.  You'll soon find out if the solicitor considers it to be your money or not.

SuperCommuter

SpiderLegs said:

 Not using premium bonds as a mechanism to earn interest would seem to have been a better option.

That's what they're for though in any practical sense. No one puts £50k in to premium bonds solely in the hope of winning $1 million. Most are very unlikely to actually win a life changing amount. With the maximum holding the small prizes are pretty consistent and, over the course of a year, can be relied on when averaged out.  

xylophone

I have no moral problem with this arrangement. 

This is quite irrelevant to the issue.

The money has been given to your child and is her money.

And see (from Bath BS).

https://www.bathbuildingsociety.co.uk/savings/personal-savings/Junior Saver

• All withdrawals must benefit the child. Our staff will ask for proof that the funds are being withdrawn for this reason if it is not obvious from the transaction. Please do not be offended if you are asked to prove the purpose of any withdrawal. Please note that in some circumstances the Society may refuse to complete a transaction if we are unsure if the funds are being used for the benefit of the child.

• For all withdrawals by post, the cheque will be made payable to the child

• 
  

SuperCommuter

wilfred30 said:

Well, go ahead and try it then.  You'll soon find out if the solicitor considers it to be your money or not.

I'd hoped to get some advice before so that I can reorganise my finances if i really have to and just let inflation eat away my for savings for a time. 

wilfred30

You obviously doubt the validity of your plan or, I guess, you wouldn't have asked the question in the first place.  I'm not sure anyone on here can give you a definitive answer so you might have no choice but to 'suck it and see'.

I think the problem you would have moving the money back into your own account now is that your request may very well be denied as you will need to prove that buying your own house is in the best interests of your child considering that they are currently adequately housed.  I hope for your sake that doesn't happen or you will be stuck between a rock and a hard place!  It clearly was a very bad decision by you for whatever reason you had at the time.

grumiofoundation

SuperCommuter said:

wilfred30 said:

Well, go ahead and try it then.  You'll soon find out if the solicitor considers it to be your money or not.

I'd hoped to get some advice before so that I can reorganise my finances if i really have to and just let inflation eat away my for savings for a time. 

You seem to have missed the crux of a lot of the previous comments that the money isn’t yours anymore. 

As above your belief that it is morally acceptable is irrelevant (both morally and legally). 

Based on comment above may well not be as easy as you think to simply withdraw it to your account.