Hi all Daughter should go and study overseas next year, she ll reach 18 a couple of months after she leaves. Thinking of opening her an account once she turns 18, and put enough money to pay for her first 4 years (around 70k gbp a year I guess)in case some issue arise with her parents and we can t take care of it Looking at IB there are 4 different joint accounts open to non US citizens nor residents, Joint tenant with Rights of Survivorship might work. Some questions : Is it even possible to open an account under our conditions ? Can I transfer positions or cash from my individual IB account to the joint account ? Who has to report the income from this joint account to their tax authorities ( i live n Portugal, she´ll probably be in the UK) ? If account funding comes from my name, will my daughter be able to withdraw funds freely to her bank account anyway ? Another option would be to open her an individual account, but this creates a few issues like: Needs to pay taxes on her income while in Portugal with NHR status income is tax free although it might be a good opportunity for her to get acquainted with taxes and brokerage accounts Funding will be more complicated, need to send cash to her bank account than she needs to fund her brokerage, not sure if she can do it from a Portuguese bank account while living in the UK That would be a largish 1 time donation, not sure of the tax implications in the UK I would have no say in how to run that account, but I probably could live with that Those are a bunch of questions, thanks in advance for your input, ideas I completely missed are welcome as well (there s also a possibility she stays in the Eurozone btw, but it is less likely)
I would talk to a tax advisor in Portugal to address your questions and not make decisions based on anyone's advice on this or other forums. You're not indicating that anyone is a US citizen which makes it easier in terms of reporting obligations. IB is the more flexible brokerage in terms of reach to multi nationals and residents of various countries.
Thanks for your reply. As of tax advisors in Portugal they have been frustrating... It´s been hard to get any information from them, let alone accurate, so I´ll take as much information as I can find online. From the Portugal side it s pretty easy though, I can make donations to my daughter tax free afaik and I don´t pay local taxes on my worldwide Dividends and Interest income.
Daughter would have to deal with taxes overseas, that sounds even more exotic of an issue to Portuguese tax advisors
Thanks, I have no experience whatsoever with joint account, does that mean if I fund the account the tax obligations will befall on me (which would be fine)? In that case would she be able to withdraw funds freely from that account ? It wouldn t been an account to trade actively, but still there d be income from dividends interest, and possibly cap gains upon liquidating positions to wire out. I might use the account for further donations btw, long term planning to donate a bunch of financial holdings to my kids.
Thanks, she will be 18 by then, need to wait for her to turn 18 to open those accounts at IB (joint accounts involving minors only apply to US residents from what I saw on IB website), She´ll be in the UK on a student visa, not working ( so is the plan at least) I´ve often wondered if the kids receiving significant amount of money to live on from their parents in the UK or elsewhere had to worry about tax implications, but haven´t looked into it much so far.
I'll message IB later on to ask whether and how that's workable, but happy to get any feedback beforehand. Besides IB won't touch the tax issues.
Another consideration is to simply put the new account (and the withdrawal account) in your name and provide her with the access credentials. It's not optimal but it leaves everything in your hands to deal with. I've known lots of folks that have gone that route after finding all the joint account requirements were too cumbersome for one reason or another.