Premium bond tax implications

[captainslow]

Hi all,

So let's say someone had reached the £50k personal limit on premium bonds, would there be any tax implications to either party if they chose to invest an additional amount under someone else's name?

Thanks for your help/responses.

 

[Financial-Modeller]

I can't imagine there are any tax problems for someone else who buys premium bonds with your money. Its fairly common for people to buy premium bonds for their children etc

There could be plenty of problems if you want to enjoy someone else's winnings without paying tax on them though!

 

[Mr D]

Hi all,

So let's say someone had reached the £50k personal limit on premium bonds, would there be any tax implications to either party if they chose to invest an additional amount under someone else's name?

Thanks for your help/responses.

And if the person decides to take the money and spend it - of course they can do what they want with their money.
Often heard of it done for children - I had a little nest egg from grandmothers that way as a child.

 

[Alan]

if they chose to invest an additional amount under someone else's name?

If you invest it under some one elses name you are either:
1. gifting it to them - in which case there is inheritance tax implications https://www.gov.uk/inheritance-tax/gifts and obviously you have no right to any winnings or indeed the capital amounts
or
2. entering into a contract designed to avoid tax

 

[DavidWH]

Have they utilised their £20,000 ISA allowance?

With that sort of sum, there's potential for good returns with a stocks and shares isa (also potential to loose too)

 

[Bob Morgan]

What is their Documented and Proven Record for 'Paying-Out?'

 

[Argentum Tax]

If you invest it under some one elses name you are either:
1. gifting it to them - in which case there is inheritance tax implications https://www.gov.uk/inheritance-tax/gifts and obviously you have no right to any winnings or indeed the capital amounts
or
2. entering into a contract designed to avoid tax

Don't you mean, in this case, a "contract either to evade tax, or to evade the legal limit on investments in Premium Bonds".

 

[captainslow]

Thank you for the replies. I read somewhere a possible solution could be the creation of a trust ie 'the bonds belong to you but they are being held on trust by another.' For those who have an informed opinion, is there any legal validity to this option?

 

[Argentum Tax]

Thank you for the replies. I read somewhere a possible solution could be the creation of a trust ie 'the bonds belong to you but they are being held on trust by another.' For those who have an informed opinion, is there any legal validity to this option?

Read the information on the NS&I website, which says:
"You can also buy Premium Bonds:
• for children under 16
• for another adult if you’re acting as their attorney or deputy.
Premium Bonds can’t be held jointly or in trust."
You really should try doing your own research. It really is quite easy.

 

[Newchodge]

Thank you for the replies. I read somewhere a possible solution could be the creation of a trust ie 'the bonds belong to you but they are being held on trust by another.' For those who have an informed opinion, is there any legal validity to this option?

If you demand legally valid opinions I suggest you ask, and pay for, a lawyer.

There are rules about how many premium bonds 1 individual can hold. You want to break those rules. I hope that, if discovered, the premium bind people will confiscate, without compensation, the illegally held bonds.

 

[UKSBD]

I hope that, if discovered, the premium bind people will confiscate, without compensation, the illegally held bonds.

Could be worse, they notice he has too many just after he wins the £1m draw and invalidates his ticket!

 

[captainslow]

Read the information on the NS&I website, which says:
"You can also buy Premium Bonds:
• for children under 16
• for another adult if you’re acting as their attorney or deputy.
Premium Bonds can’t be held jointly or in trust."
You really should try doing your own research. It really is quite easy.

I did try. Obviously I overlooked that however so I guess I didn't try hard enough. Thank you for bring that to my attention.

If you demand legally valid opinions I suggest you ask, and pay for, a lawyer.

There are rules about how many premium bonds 1 individual can hold. You want to break those rules. I hope that, if discovered, the premium bind people will confiscate, without compensation, the illegally held bonds.

1) I'm not demanding anything. You were quite welcome to ignore my post. 2) Well, no. I don't want to break any rules. That's why I am asking for advice for taking any actions. I thought this forum was a friendly place people could ask for advice, clearly I'm mistaken.