Property funds in child accounts

greatcrested

As I've admitted on here before (thank goodness for anonymity - though I guess 'they' could find me if they really wanted!), I sometimes drive at 80 mph. So far, I've got away with it.

You too might get away with withdrawing your daughter's money and using it to buy a property in your own name.

Does not mean it's right, or legal, in either case. If I get caught I'll pay the price, and I accept that.

I hope that now, after 4 pages where countless posters have all pretty much all said the same thing, you too now accept the illegality of your plan, and that there might be a price to pay, either for defrauding the bank (obtaining extra interest by deception) and/or for defrauding your daughter (withdrawing her money for personal use).

wilfred30

OP - don't know if you missed it but you've not answered why you didn't just buy a house at the time rather than put the money in your daughter's account?

SuperCommuter

wilfred30 said:

OP - don't know if you missed it but you've not answered why you didn't just buy a house at the time rather than put the money in your daughter's account?

Well, I was viewing places last year but the stamp duty announcement caused the market to go a bit silly so we decided to sit out this particular boom. Properties we was interested in were going way in excess of what they were worth in any normal market and i didn't think this was sustainable. 

As we're FTBers and aiming for somewhere under £300k the stamp duty holiday is actually more of a hinderance than a help for us. We're therefore going to start looking again in the summer. 

oniongirl

So you put the money in these accounts in your daughter's name for ~£80/month of gains for less than a year?

SpiderLegs

I’m fairly certain that when you do get that mortgage though you won’t be moaning about super low interest rates.

grumiofoundation

SuperCommuter said:

frogglet said:

I'm not sure why you have come on here, you clearly think you have done the right thing.

I came on here to see if there was a firm legal opinion on if this would be an issue when approaching a solicitor. I've never bought a house before but as far as i can tell to prove the money was obtained through savings i would need to provide around 6 months of bank statements that show the savings building up through contributions from my salary. I don't plan to buy very soon (the stamp duty holiday price ramping has pushed back my plans) therefore i have time to get my financial affairs into a 'clearer' state.  I think i've got my answer and i'm I am grateful to everyone who has responded. 

Don't know what answer you were looking for as you seem to be ignoring all the responses. 

If the solicitors ask for the source of the money will you say YOUR savings for the portion that you removed from the child's account? 

SuperCommuter said:

wilfred30 said:

Yes, roughly 18 years if the bank refuse your request!

Using instant access child accounts to stash personal money and obtain benefits is not allowed because the money is expected to be withdrawn by the parents and used instead of benefits. However, what you are saying is that actually withdrawing money from a child account is also not allowed because 'it's the child's money'. You can't have it both ways: either the money can be accessed by the parent or it cannot. The only exception to this is Junior ISAs and, as i said, i don't have any of these under my daughter's name. 

No one said is cannot be accessed by parents, you are managing the money for them. The fact you are managing it does not make it your money. What did the Ts and Cs of the account(s) you opened say? E.g. see link from nationwide, with particular focus on the line 

• The money in your account legally belongs to the child

https://www.nationwide.co.uk/products/savings/our-accounts-for-young-people

Whether buying a house in your name constitutes managing their money would be for a legal professional to advise on I suppose.  

davidmcn

grumiofoundation said:

Whether buying a house in your name constitutes managing their money would be for a legal professional to advise on I suppose.  

The most likely problem is going to be the standard mortgage instructions requiring the solicitor to report to the lender if funds are coming from anywhere other than the borrower's own resources. The borrower's child's bank account is not the borrower's money. I'm not sure whether solicitors would have general concerns beyond passing the buck to the lender on that point.

wilfred30

SpiderLegs said:

I’m fairly certain that when you do get that mortgage though you won’t be moaning about super low interest rates.

According to their opening post, the OP is a cash buyer.  It was just me suggesting that they might need to get a mortgage now instead due to them no longer having the cash!!

SuperCommuter

grumiofoundation said:

Don't know what answer you were looking for as you seem to be ignoring all the responses. 

I'm not ignoring any comments. I take on board what you're all saying but some of the comments are very black and white, and there's no obvious response to something like that. For example, when you say "it's not your money, look nationwide said so" well, that's very nice but i'm not going to lose sleep if I violate Nationwide's T&Cs. 

grumiofoundation

wilfred30 said:

SpiderLegs said:

I’m fairly certain that when you do get that mortgage though you won’t be moaning about super low interest rates.

According to their opening post, the OP is a cash buyer.  It was just me suggesting that they might need to get a mortgage now instead due to them no longer having the cash!!

So most likely holding 6 figures of cash. Maybe makes an earlier comment a tad of an of exaggeration? I would hazard a guess that there are a lot of people renting who would view having enough cash to buy a property outright as ‘secure.’  

An additional irony would be that assuming the OP is (or at least was a few years ago) under 40 they could have made far more money by opening a lifetime ISA than they did by putting their money in someone else’s name.
(I’m assuming they don’t have a LISA as for that you need a mortgage but maybe they didn’t read those Ts and Cs either) 

“ I'm guessing you already own your own home and your children have security as a result. Assuming that's true then you probably also benefitted from better rates than we have today while saving up for a deposit. Your children will never know the threat of eviction. If i was comfortably housed, then i might also take a moral high ground and judge these methods though i'm not in that position yet.”