Found the solution:
I used the function MoveIgnoreActors() defined in UPrimitiveComponent. In the PostInitializeComponents() function, I simply added the Instigator to the list of IgnoreActors using this function. I also did the reverse on the Instigator itself (ie added the spawned projectile into the list of IgnoreActors for the Character).
In Blueptints, this can be achieved by using the function ‘Ignore Actor’ called from the Actos’s collsioncomponent or the mesh itself (if there are no separate collisioncomponent defined).