Trust Fund or similar for non-UK child?

StudentAccountant · 19 February 2019 at 6:46PM

Does anyone know a good scheme for investing small amounts regularly, ideally with a tax break, for the benefit of a child who is not British or a British resident?

My 5-year old godson is a Spanish national, currently living in Germany. When he was born, I set up a Bare Trust for him with the Scottish Investment Trust, which was the only one I could find that would cater to non-UK children.

However about 18 months ago the fund was sold to AJ Bell, and since then I have encountered a large number of issues, not least of which is the disproportionate flat fee per investment. That and the fact that there no longer seems to be any "trust" element at all (i.e. I no longer need the other trustees to approve any changes, and if I wanted to I, or indeed the other trustees could withdraw all the funds tomorrow).

Can anyone recommend the some good ways to invest small amounts every month in such a way that the funds are secure for a fixed term, and with low charges?

I'm not looking for a huge return as this is more about squirrelling amounts away than growth, but at the same time I don't want any gains to be consummately violated by disproportionate management charges.

Failing that, I'm thinking about opening an ISA in my own name for him and transferring the funds out.

Thank you

xylophone · 19 February 2019 at 7:23PM

(i.e. I no longer need the other trustees to approve any changes, and if I wanted to I, or indeed the other trustees could withdraw all the funds tomorrow).

This sounds as if the investment was originally set up "in bare trust" for the child - if so, then this investment was an absolute gift to the child ( he is the beneficial owner) and no longer your money to take and use in an account in your own name.

You might approach eg Hargreaves Lansdown or Charles Stanley and ask whether they would consider opening a Junior Investment Account in bare trust for a non resident child - emphasise that the Trustees would be UK resident.

If so, then you could sell the investments with AJ Bell, transfer to the new provider and set up a regular investment into a fund.

https://monevator.com/index-investing/

The provider will still make a charge but if the value of the Trust remains relatively modest this might not be too painful.

Flobberchops · 19 February 2019 at 9:16PM

I'm pretty sure an ISA is out of the question but you may find that, combing the Ts&Cs of some still pretty-good child savings accounts, it's often a condition that the controlling adult is a UK resident, not necessarily the child. And since the child doesn't need to be present at account opening, it may be a moot point anyway.

Trust Fund or similar for non-UK child?

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