Premium bonds win

BikingBud

And how did you explain this and assure yourself that he fully understood that you were depriving him?

Haddenham35

I understand the legal points made, but I'm very clear on the moral and emotional challenge of giving our sons an equal footing in life.

The actual financial questions I raised still remain - what are the best vehicles available to house the money whilst we wait for JISA allowances to reset each year?

dunstonh

Why are you considering using cash savings for a five‑month‑old baby?

Were the Premium Bonds held in your name but mentally earmarked for the children, or were they specifically in the child’s name?

I believe what the earlier posts are indicating is that, if the bonds are in the child’s name, you would effectively be taking their money to pass it on to others. The money belongs to the child if it was held in their name.

The definition of a ‘decent sum’ is probably a key issue. ‘Decent’ could mean £100 to one person or £100,000 to another. The consequences of sharing the former are minimal, whereas the implications of sharing the latter are more significant

Haddenham35

https://forums.moneysavingexpert.com/discussion/comment/81917976#Comment_81917976

who said anything about cash savings?

Haddenham35

ok new scenario to avoid any 'depriving' of my child.

let's say, scenario a is that (as guardian of the money) I leave it where it is in premium bonds. No interest and little chance of winning a significant sum again. Hand over this amount to child A when he's 16.

scenario b - split the money, withdraw and invest in a sensible tracker. Accumulate and compound so that by the time child a reaches 16 we've created the same value of pot as he has now, but with now a secondary pot for child B.

Child A gets the same outcome, but child B benefits too.

Section62

https://forums.moneysavingexpert.com/discussion/comment/81917980#Comment_81917980

You'd still be depriving child A of the pot you are allocating to child B.

This isn't a moral issue - what the previous posts have been pointing out is that you have a legal obligation to manage child A's money for their benefit, and their benefit alone. Arguably there is also a tax issue as well - if you artificially split child A's money to gain an advantage from child B's tax benefits then you may find yourself on thin ice with HMRC.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81917980#Comment_81917980

Scenario B deprived Child A of Scenario C:

Withdraw and invest in a sensible tracker. Accumulate and compound so that by the time child a reaches 16 we've created double the value of pot as he has now.

Of course, there's Scenario D. Manage the money in the best interests of child A until they are 16, at which point you explain the situation and hopefully they agree to split the money with their sibling. If not, you could always rebalance any other financial support accordingly to even things out.

And to return to the original question, as the money belongs to Child A, unless they are earning £18k plus in interest there's likely no tax liability even outside an ISA. If you decide to gift money to child b, as i understand it anything over £100 in interest will be taxed as if it was your money, unless its in an ISA.

Emmia

Can we presume that the amount won is more than the maximum PB holding? If it is, I'd put the excess in a cash savings account and then move the money over to an ISA in Son A's name each year

If not, just leave it in the PBs and take out the amount you wish to invest in an ISA in Son A's name each year.

You never know, they may win again...

*If your sons were adults would you expect them to share winnings with each other on a 50/50 basis? Would you expect this if they were teenagers? Would you be upset if they didn't share?

Sg28

Imagine the situation in 18 years when son A has this substantial sum plus 18 years of investment growth. He potentially buys and house, car and has university paid for. Son B has just a fraction of that.

That sort of resentment could tear the family apart.

So im on the side op and would certainly be splitting the money equally between both children.

With regards as to what to do with the excess while waiting to top the isas personally I would keep the money in a seperate high interest saving account of my own and pay the tax in the meantime.

Haddenham35

https://forums.moneysavingexpert.com/discussion/comment/81918093#Comment_81918093

exactly the situation I want to avoid!