The Lemon Fool

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'?

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?

They are tax free (except inheritance tax)

rhys wrote: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?

rhys wrote: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.

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!