I am a US citizen who is a longterm (+14 years) resident in the UK and I am having trouble finding tax efficient ways to save for my childrens university education. The problem is that as of last year, I am liable for world wide investment income in both countries, both want to lump children's income with the parent's, but neither of the tax authorities seem to want to recognize the tax advantaged saving/investing schemes of the other. So while I can start a Child Trust Fund in the UK or a 529 Educational savings plan in the US, most of the advantages are undone by the fact that the gains are taxable in the other country. I am not a banker who can afford expensive tax advice or trust schemes and so I am having trouble finding useful and reliable information. Has anyone got any ideas on the following:
How would the inland revenue treat a 529 plan where I was the "account owner" and my son (also UK resident) was the beneficiary? Would it be regarded as a bare trust? Or would it simply count as my investiment income?

Or does anyone have any pertinent advice about how to save for my kids while keeping two sets of taxmen's mits off the results?