Premium bonds win

Haddenham35

To the last questions, yes. I've had premium bonds with my family since I was a child and the rule has always been if you won more than £100 then you split it with the family. So it was a continuation of that same thinking.

Haddenham35

thanks everyone for all the help - I'll make my own call on the moral / legal questions.

with the vehicle, everything I read online says to put it in JISAs, but what's the advantage there rather than putting it in some form of tracker and letting the interest accumulate and compound over time? If it's the latter we could put it all in (as no restrictions on amounts invested) and not have to make any splits at this point.

Haddenham35

https://forums.moneysavingexpert.com/discussion/comment/81918085#Comment_81918085

to the last question, yes. It's a continuation of a family rule I've had in place with my premium bonds since I was a kid.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81918126#Comment_81918126

As I've already said, the benefit of a JISA is the tax saving. Son A owns the money, so won't be taxed unless the interest goes over £18k. However, that only lasts until he starts earning, at which point the £18k reduces as his personal allowance is used up.

If you give part of the money to Son B, anything outside a JISA and over £100 will be taxed as if it was your money, not his.

strawb_shortcake

What if you have a 3rd child in future?

When we bought PB's for our children they went in my name in case of this scenario, it wasn't much and they only had £50 winnings over the years

Haddenham35

https://forums.moneysavingexpert.com/discussion/comment/81918142#Comment_81918142

sorry to make you repeat yourself, appreciate the input.

let's say no splitting and no isa, just withdraw and put into a savings account. Is it possible to set up a tracker fund (e.g. invests in a ftse world index) in child A's name?

I'd like to withdraw the money out of NS&I and invest asap - but not sure if best to withdraw to my account and then I move it on (would that incur any tax liability) or to set up a new tracker fund in son A's name and send it directly there?

Emmia

https://forums.moneysavingexpert.com/discussion/comment/81918151#Comment_81918151

You can have a stocks and shares JISA, not just cash ones.

Going forward, maybe it would be better to invest the money you'd put in PBs into a JISA for each of your kids (i.e. not something generating prizes)

They may not end up with the same amount at 18 due to the vagaries of the stock market, but you would avoid the moral/legal aspect of this situation as you could genuinely contribute the same amount to both of them.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81918151#Comment_81918151

All the tracker funds for children Im aware of would be in junior stocks and shares isas.

As long as the money belongs to son A, there's not going to be any tax liability up to £18k. The issue with moving it to your account first is that it may cause HMRC to assume it's your money and start to ask questions. You can resolve those by showing the premium bond win and explaining your intent, but do you want to have the hassle?

Easier to set up a simple child account in their name and use that in the interim: https://www.nationwide.co.uk/savings/childrens-future-saver/

Haddenham35

https://forums.moneysavingexpert.com/discussion/comment/81918171#Comment_81918171

very helpful thanks!

Section62

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

That is looking at the situation from one side only.

Imagine being son A and discovering you could have enough money to buy a house, car and pay for university, but your parents unlawfully took half your money and gave it to your brother. If you love your family enough then you might be happy with that…. but if there is any kind of tension then discovering that information might be enough to split the family. Moreover, it could potentially lead to legal action by son A (or their representative) to recover the money that was taken from them.

The morals of the situation are for the OP to decide, so I'm replying to your post only to make the point that making a decision which feels like 'doing the right thing' doesn't mean there won't be resentment or family dispute later. The proposed approach is not without risk.

The legal and tax issues should take priority though.