News1 min ago
Premium Bond Syndicate
2 Answers
Does anyone know about how to set up a syndicate?
Myself and some co-workers are thinking of investing in premium bonds on a regular basis. I know there are the obvious points regarding trust etc but what would be the tax liability if we won a big prize and are there ways round it?
Myself and some co-workers are thinking of investing in premium bonds on a regular basis. I know there are the obvious points regarding trust etc but what would be the tax liability if we won a big prize and are there ways round it?
Answers
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Short answer is that you can't. The Terms and Conditions explicitly state:
"7. Bonds may only be held in the name of one individual person. "
So, one individual would have to hold the bonds and be responsible for advising the syndicate on any wins/reinvesting etc. That individual may also own her/his own bonds so separating them would be difficult (although not impossible). Each individual has a personal limit (currently �30,000) of bonds so holding additional bonds for a syndicate may not be possible.
But assuming you do collectively invest and deal with the questions of trust etc then you would probably be covered by the normal tax rules regarding the giving of gifts. The actual win itself is tax free, but any subsequent interest earned on the winnings would be taxable.
I'm not professionally qualified to give financial advice, so if you want to take this further it may be worth having a chat with an accountant who is a tax specialist.
"7. Bonds may only be held in the name of one individual person. "
So, one individual would have to hold the bonds and be responsible for advising the syndicate on any wins/reinvesting etc. That individual may also own her/his own bonds so separating them would be difficult (although not impossible). Each individual has a personal limit (currently �30,000) of bonds so holding additional bonds for a syndicate may not be possible.
But assuming you do collectively invest and deal with the questions of trust etc then you would probably be covered by the normal tax rules regarding the giving of gifts. The actual win itself is tax free, but any subsequent interest earned on the winnings would be taxable.
I'm not professionally qualified to give financial advice, so if you want to take this further it may be worth having a chat with an accountant who is a tax specialist.
I do think that the issue of trust can be worked out.
There is only 15 of us investing �100 a month so I dont think we will hit the �30,000 limit for quite some time.
However, my wife has her own business so I will talk to her accountant ref the tax issues.
Thanks for taking the time to answer my question.
There is only 15 of us investing �100 a month so I dont think we will hit the �30,000 limit for quite some time.
However, my wife has her own business so I will talk to her accountant ref the tax issues.
Thanks for taking the time to answer my question.
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