shayward

I have searched high and low for some straight forward advice on this and haven't got very far.

My son has around $3,000 left in a Child Trust Fund in the UK. (We moved to the USA 2 years ago)

Am I required to include the CTF on MY FBAR and\or Form 8938?

Does your child have a CTF and what have you done about reporting on FBAR and\or Form 8938.

My take so far is that the FBAR is a maybe, and the Form 8938 is a no.

I say no to form 8938 because the form instructions state:
" You have an interest in a specified foreign financial asset if any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset are or would be required to be reported, included, or otherwise reflected on your income tax return."

Disposing of the CTF (which has just $3,000 in it) would not result in me reporting anything, as it goes to my son.

For the FBAR, I am unclear on the Signing authority bit. Because, on CTF parents are just the "Registered Contact", not the joint account holder.

In conclusion I'd like to say what an utter and complete pain in the behind filing US tax returns are when you have lived in a foreign country. Good grief.

robin1234

No sh*t.

All I can say is, give it 20 years, you'll knuckle under and nothing will seem too absurd or time consuming.

Do not ever expect your American or British friends or family to even begin to understand, or in fact be interested, in what you have to go through every year.

sergeyvo

I believe you need not report about it (it belongs to your son who does not report to IRS as well), however, if you make any money transfers to any trust funds, you should inform IRS.
That's why I gave up my DD with them.

JAJ

Except that it's not a "trust" - it's a bank account, it's over-complicating things to suggest it's anything else.

I'd agree that FBAR is a maybe, if you have signing authority, and form 8938 is a no, if it belongs to your child. There are provisions that attribute children's investment income to the parents, but only amounts exceeding something like $1,900.

For the longer term, is it possible to cash in or otherwise divest of this account, to simplify U.S. tax and reporting?

shayward

Unfortunately not, its locked up until my son turns 18.

As for calling it a trust, well that was just marketing speak, so you're right about nothing to worry about there.

sergeyvo

Then I made a mistake by stopping the existing DD, but I'm too lazy to send them another form again.

Can it be simply cashed once a child reaches 18, or a buffering bank account is a must to receive the money?

shayward

I think they can just send a cheque to you child for the amount in the account.

Probably best to have cancelled the DD anyway as you'd probably end up breaching the $10,000 limit at some point, and then you'd have to file an FBAR for your child as well.

shayward

So any-one on here who took out one of those UK child trust funds before they left the UK?

hoffage123

We haven't left (yet) - but we have one for our son .. it only has £250 in it though.

nun

The UK Child Trust fund is not a Trust , it's just a foreign bank savings account.

If you have signature authority over the account you should include it in your FBAR calculations and form if you meet the reporting threshold.

If you have no ownership of the account you would not need to report it on FATCA.

You can deal with tax one of two ways:

1) If the unearned income from the account is less than $1000 your child does not need to file a tax return.

2) You could elect to include the income on your taxes.

sergeyvo

Hmm, from CHTF statements it appears that a parent is a "contact person". Is he/she a nominee or a trustee?

Should CHTF account balance (which belongs to the child) be added to the parent account(s) balance for $10,000k threshold calculation?