Deposit on Children's NSI Premium Bonds

ravkumar6699

I have saved some deposit amount in my child's premium bonds (age 2 and 8). 3 wks after making application, Nationwide is saying they don't accept this as deposit amount. I am really not sure what to do

amnblog

Nationwide do not see that as your funds understandably. You will need to access deposit from 'your own' funds.

SuseOrm

It’s basically no longer your money in the eyes of the law so you’re a bit stuffed there

ACG

You have not saved it, you gave it to your children. Its in their names. (This is how it looks on paper). 
Your children cant now gift it you, as I dont think Nationwide (or any mainstream lender) are going to accept a deposit from someone (ie your kids) who will expect to live in the property. 

You have 2 choices I think, get the money back in your name and look to buy in 3 months.
Find a lender and solicitor who will accept/take a view on the deposit. But I cant see many, if any high street lenders doing it. 

ravkumar6699

I am the responsible parent, who is saving and will be able to cash out any point of time. I don't know what makes them to think that it is not acceptable. I simply can't understand.

sammyjammy

But you put that money in your children's names, why did you think you could just take it back?  What was the purpose of putting it in their names in the first place?

ACG

Its not acceptable as that money is no longer yours. The moment you put it in their account it became their money. 

The reason that is a problem is that if they give you that money back it will be deemed as a gift and that would be acceptable. But because the children will live with you, it will be deemed as a gift with strings attached - ie they get to live with you. If your children were 25 and had moved out, it would not be a problem as it then is a gift with no strings attached. 

[Deleted User]

How do you propose a child writes a gift letter and signs legal paperwork confirming they are happy to gift their money to you?

To see who's money it is, ask the bank to close the account and see who they make the cheque out to. Will most likely be the child as you are merely a manager of their money at this point 

You either gave the money to the kids in which case it's no longer yours, ot you put it there to not pay tax on the interest which is tax evasion.

If you can get the money back in to your account then wait 3-6 months to apply is your best bet.

ravkumar6699

Deleted_User said:

How do you propose a child writes a gift letter and signs legal paperwork confirming they are happy to gift their money to you?

To see who's money it is, ask the bank to close the account and see who they make the cheque out to. Will most likely be the child as you are merely a manager of their money at this point 

You either gave the money to the kids in which case it's no longer yours, ot you put it there to not pay tax on the interest which is tax evasion.

If you can get the money back in to your account then wait 3-6 months to apply is your best bet.

Thanks for your reply. It is not bank account. They are in Premium bonds. When i cash out, they will be straight into my bank account, from which i paid to buy premium bonds. Regarding Tax - There is no tax on Premium Bonds winnings. Even though technically bonds are child name, but I am the responsible person. 

MWT

No simple solutions, money given to a child by a parent is always legally presumed to be a gift unless there is written and signed evidence to the contrary, but your children are too young to sign a loan agreement.

You may have always intended this to be a loan not a gift but that isn't supported by any evidence so the presumption remains 'gift'.

Try talking to your solicitor and get their perspective, you can demonstrate the origins of the cash easily enough and show it going out of, and back into, your account, it is just the 'gift' aspect of this that causes the problems.

SuseOrm

ravkumar6699 said:

I am the responsible parent, who is saving and will be able to cash out any point of time. I don't know what makes them to think that it is not acceptable. I simply can't understand.

Well it looks like you’ve done it to avoid paying tax on the interest because the children don’t pay tax that’s what it looks like