Premium bonds purchased by parent for children

[rhys]

A relative gave me £200 and suggested that I buy Premium Bonds for my kids. I would have liked to buy PBs in both joint names, so that they could share any winnings equally. That's not possible, so I elected for auto reinvestment. The younger child's already £25 up.

Imagine that one child had a substantial win, which I encash to reinvest between both children.

Since I'm the parent, would any further winnings be seen as my income, incurring a liability under the 'income >£100 on investments by parent on behalf of a child are deemed the parent's income'?

[chas49]

PB prizes are tax free so it's not an issue.

If you want to keep the children's shares roughly equal, perhaps come out of auto-reinvestment and use the prize money to level up between them?

[dealtn]

They are tax free (except inheritance tax)

[Lootman]

A relative gave me £200 and suggested that I buy Premium Bonds for my kids. I would have liked to buy PBs in both joint names, so that they could share any winnings equally. That's not possible . . .

Although PBs cannot be held jointly, could you not nominate winnings to be paid into a bank account held jointly by the two children?

[swill453]

A relative gave me £200 and suggested that I buy Premium Bonds for my kids.

A single £25 win on £200 of premium bonds has used up all their luck for the next century

The median average winning on even £1000 of bonds is £0 in a year, it's not going to be a very exciting hobby for them waiting for their winnings.

Unless it's meant to encourage a savings habit of course.

Scott.

[rhys]

I realise that they're on a hiding to nothing with such a small holding. But I'd rather keep this token holding and it can be associated with the relative, rather than it disappear into their ISA/SIPPs.

Thanks for the comments, everyone. I'll take it that it won't be a tax problem for me should I ever need to reinvest their £1M winnings eleswhere!