Child savings account for non resident infant

EdSwippet

TTUS wrote: »

Thank you premium bonds sounds like a possibility.

From NS&I's page on accounts for non-UK residents:

If you live outside the UK, you should check whether local regulations permit you to hold Premium Bonds. For example, the US has strict gaming and lottery laws which mean that it may not be possible or practical to hold Premium Bonds while in the US.

If you do decide that premium bonds are the best 'savings' vehicle here -- and I'm not saying that they are -- the best bet is to have your UK based non-US citizen Nan hold them in her name, and then just cash in and send the balance when you want to declare this savings account 'matured'. This assumes, of course, that Nan does not already hold premium bonds to her £50k maximum.

That way the winnings (if any) are not taxable, because the UK does not tax premium bond winnings, and there is nothing to declare on anyone's UK tax return. Conversely, even if you can get round the US-despises-gambling issue, if the premium bonds and the account were instead held by your US resident son then any winnings would be taxable to the US. Accompanied by a heap of annual US tax reporting paperwork misery, because the US also despises anything financial that is foreign.

Finally, worth noting that many UK banks and financial providers will not open accounts for any US residents, or for any US citizens living in the UK (even if also UK citizens). The reason is, again, FATCA. In effect since 2014, it requires UK banks to grass up any US persons to the IRS, at the bank's own expense. The costs of doing this usually outweigh any benefit to the bank of offering the account.