Child Trust Funds on the FBAR and Form 8938

Is a Child Trust Fund a foreign financial account for the FBAR

In our view, yes. A Child Trust Fund is held with a UK provider, has an account reference and a value that can be withdrawn at maturity, and the money belongs to the child. That makes it a financial account maintained outside the United States, reportable by a child who is a US person.

GOV.UK describes the Child Trust Fund (opens the official GOV.UK page in a new tab) as a long-term tax-free savings account for children born between 1 September 2002 and 2 January 2011. The scheme closed to new accounts in 2011, so every fund still in existence belongs to someone who is now a teenager or a young adult. Family can still pay into an open fund within an annual limit, and no UK tax is charged on its income or growth.

Despite the word trust, FinCEN's instructions turn on financial interest, and an owner of record has one. We report the fund as the child's own account, in the same way as a Junior ISA, and not as an interest in a separate trust. Neither FinCEN nor the IRS has named Child Trust Funds, so this is our reading, matching our approach to Premium Bonds and Junior ISAs.

Who files the FBAR for a Child Trust Fund before and after 18

The child does, in both periods. The obligation always sits with the account holder. While the child cannot file, FinCEN says a parent or guardian files and signs for them. After maturity nobody else stands in, so the young adult files their own report on FinCEN Form 114.

The FBAR instructions at FinCEN (opens the official FinCEN page in a new tab) say a child is generally responsible for their own report and, where a child cannot file because of age or for another reason, a parent, guardian or other legally responsible person files it. The parent signs and enters Parent/Guardian filing for child as the filer title. FinCEN sets no fixed age at which that stops. A US citizen of any age is a US person, and our post on who counts as a US person for the FBAR covers children born abroad to an American parent.

The parent's own report is a separate question. Until the child takes control, choices about investments and providers rest with the registered contact alone. That may amount to signature authority, which FinCEN defines as the power to control the disposition of assets by direct communication with the institution. A US-citizen parent in that role should consider listing the fund on their own FBAR for each year they held it.

• Child under 16, parent as registered contact: the child's FBAR signed by the parent, and possibly the parent's own as well
• Child aged 16 or 17 who has taken over: the child holds the controls, and a parent who no longer does has no authority to report
• Year of the 18th birthday: the young adult's own FBAR, plus the parent's if they held authority for part of the year
• Non-US child with a US parent as registered contact: no FBAR for the child, but the parent's authority still counts

How does a Child Trust Fund count towards the FBAR and Form 8938 thresholds

The fund's highest value in the calendar year is added to the highest values of the child's other foreign accounts. If the total exceeds $10,000 at any time in the year, every account goes on the report. A fund on its own can pass that line, and a young adult's current and savings accounts are added to it.

Value the fund from its statements, using the highest figure for January to December rather than the UK tax year, and convert it at the Treasury's year-end rate as our post on the FBAR maximum value and exchange rate explains. The report is due by 15 April, extended automatically to 15 October. It is filed with FinCEN through its own system, never with the tax return.

Form 8938 works differently. The Instructions for Form 8938 (opens the official IRS page in a new tab) say that someone with no income tax return to file has no Form 8938 to file, and that financial accounts at foreign institutions are specified foreign financial assets. A young adult living in the UK who does file only reaches the form once their assets pass $200,000 at year end or $300,000 at any time, as set out in the IRS comparison of Form 8938 and FBAR requirements (opens the official IRS page in a new tab). A parent who elects to report a child's investment income on their own return is treated as holding an interest in the child's specified foreign financial assets.

Is the growth in a Child Trust Fund taxable in the US

Yes, for a US person. The UK exemption is a UK rule, and the United States taxes its citizens on worldwide income (opens the official IRS page in a new tab). Interest, dividends and fund distributions inside the account are the child's income in the year they arise, whether or not anyone could reach the money.

A cash fund is the simpler case: the interest is ordinary income, and for a child it is often too small to require a return. Many funds were opened in stocks and shares form and hold pooled funds. UK funds of that kind are commonly passive foreign investment companies under US rules, and each may need Form 8621. The Instructions for Form 8621 (opens the official IRS page in a new tab) contain an exception for small holdings, where the total value of a person's PFICs is below $25,000 and nothing taxable under the regime has happened that year.

Individual company shares inside a fund are usually not PFICs, though a foreign company that is mostly passive can be one, so each holding deserves a look. A sale of fund units that are PFICs is taxed under the PFIC rules rather than as an ordinary capital gain unless an election was made in time, and a sale made to empty the fund at maturity is often where the cost appears. Our PFIC reporting service works through the holdings.

What happens to a Child Trust Fund at 18

The fund matures on the 18th birthday. GOV.UK says the young adult automatically takes over, no more money can be paid in, and the money stays in the account until they withdraw it or move it into an adult ISA. Once that happens, the Child Trust Fund closes.

The GOV.UK page on what happens at 18 (opens the official GOV.UK page in a new tab) sets out those choices, and each has a different US effect. A matured fund left untouched is still an open UK account, counted each year. Withdrawing the cash closes it, and in that year it is reported at its highest value while open. Before maturity, a fund can also be transferred into a Junior ISA, and GOV.UK says a child cannot hold both.

A move into an adult ISA starts a new account under the rules for ISAs (opens the official GOV.UK page in a new tab), with its own provider, its own reference and its own line on the FBAR. The US tax still does not recognise the wrapper. Whether the move counts as a sale for US purposes depends on whether the funds are sold for cash and repurchased or carried across as they are, so ask the provider which it does. Our post on ISAs on the FBAR and Form 8938 covers the new account.

How a dual-national 19-year-old in Leeds puts the record straight

Take a dual-national 19-year-old in Leeds, born in 2007 to an American mother and a British father. She turned 18 in 2025 and learns from a university friend that she probably has a Child Trust Fund. Her mother was the registered contact, and nobody has filed an FBAR in her name.

She uses the Find a Child Trust Fund service (opens the official GOV.UK page in a new tab) on GOV.UK, which is free and open to anyone aged 16 or over looking for their own fund. HMRC writes back with the provider's details, and an online request is the quickest route. The provider confirms a stocks and shares fund holding a UK index tracker, and sends statements for every year since she was born.

She builds a schedule of each calendar year's highest values for the fund and her bank accounts. For any year in which the total exceeded $10,000, an FBAR was due in her name: before 2025 one signed by her mother, and for 2025 her own. Her mother checks her own reports for the years she was registered contact. They then look at whether earlier income meant a US return was due, and whether the tracker needed Form 8621. Missed reports and returns are handled together, through late FBARs or, where returns are also missing and conduct was non-wilful, through our streamlined filing service.

• Confirm US citizenship and find any Social Security number
• Trace the fund and request statements back to the year it opened
• Record each calendar year's highest value for every UK account
• Identify the funds held and decide whether any are PFICs
• Settle earlier years before choosing to withdraw or transfer

What to do next with a matured Child Trust Fund

List what exists before deciding anything. Find the fund, gather its statements, and build one schedule of every UK account the young adult has held. Then work out which FBARs and returns were due in each year, in the child's name and in the parent's, before the money is withdrawn or moved.

From the first year after maturity, the reporting is routine. The young adult files their own FBAR where the aggregate test is met, a Form 1040 where income requires one, and Form 8938 only where the higher threshold is reached. A first salary or a part-time job will often make a return necessary in any case.

Our foreign income and FBAR reporting service prepares the schedule and the reports, alongside individual tax return preparation for the young adult and the parent. The document checklist in our client portal lists the statements to request from the provider. For the wider rules on UK accounts, return to the guide to FBAR and FATCA for UK residents.