FBAR for Americans in the UK: Who Must File and When

FBAR for Americans in the UK: an introduction

FBAR for Americans in the UK is an annual report of your non-US accounts, due whenever their combined value passes $10,000. The report goes to the US Treasury, not to HMRC, and it carries no tax bill of its own. However, the penalties for missing it are among the harshest in the US system. Therefore, every US citizen and green card holder living in Britain needs to understand it.

This guide explains who must file, which UK accounts count, how to work out the figures and when the report is due. Furthermore, it covers the penalties and the safe routes for catching up on missed years. For the wider picture, read our complete guide to filing US taxes from the UK. Our guide to FBAR and FATCA reporting goes further on every account type.

Why FBAR for Americans in the UK matters

An ordinary UK financial life is a foreign one in American eyes. Your current account, your ISA and your pension all sit outside the United States. Consequently, most Americans who settle here cross the reporting threshold within months of arriving. In our experience, people rarely miss the report because they are hiding money. Instead, they miss it because nobody told them it existed.

The gap usually comes to light at an awkward moment. For example, a UK bank sends a letter asking you to confirm your US tax status. Alternatively, a mortgage adviser or a new accountant asks about your US filings. By then, several years may have passed. Fortunately, the position is almost always fixable when you act first.

What the FBAR actually is

The FBAR is FinCEN Form 114, the Report of Foreign Bank and Financial Accounts. The Financial Crimes Enforcement Network, a bureau of the US Treasury, collects it under the Bank Secrecy Act. In addition, the IRS enforces it. The IRS guidance on the FBAR and FinCEN's own FBAR page set out the rules in full.

Importantly, the form asks for information only. It lists each account, the institution that holds it, the account number and the highest balance during the year. It does not calculate any tax. Nevertheless, the income from those accounts still belongs on your US return, so the two filings must agree.

Who must file an FBAR?

You must file if you are a US person with a financial interest in, or signature authority over, non-US accounts worth more than $10,000 in total at any time in the calendar year. Both parts of that test catch people out. Therefore, each one deserves a closer look.

Who counts as a US person

US citizens and green card holders are US persons wherever they live. Similarly, US companies, partnerships, trusts and estates are covered. The rule therefore reaches dual nationals who have never lived in America. For example, a child born in London to an American parent is often a US citizen from birth.

As a result, that child has a filing duty of their own once their accounts pass the threshold, and a parent files on their behalf. A Junior ISA or a children's savings account can be enough. The IRS page for US citizens abroad confirms that living overseas does not remove these obligations.

How the $10,000 threshold works

The threshold applies to the combined value of all your non-US accounts, not to each account. Moreover, it looks at the highest point in the year, not the year-end balance. If your accounts together touch $10,001 for a single day, you must report every one of them.

For instance, a house deposit passing through your current account can trigger a filing on its own. Similarly, a bonus, an inheritance or a pension transfer can push you over for a few days. Notably, the $10,000 figure has not changed since the 1970s, so inflation pulls more people in each year. This is why FBAR for Americans in the UK now affects people on modest incomes.

Signature authority and joint accounts

You also report accounts that you control but do not own. Specifically, signature authority over an employer's account, a parent's account or a charity's account counts. Likewise, a joint account with a British spouse is reportable in full, even if your spouse paid in every penny.

Your British spouse has no FBAR duty of their own, because they are not a US person. However, the joint account still appears on your report at its full value. The regulation at 31 CFR 1010.350 sets out these definitions.

Which UK accounts go on the FBAR?

Almost every UK account that holds money or investments goes on the FBAR. The test is whether a financial institution outside the United States holds the account. Consequently, UK tax-free status makes no difference at all.

Everyday banking and savings

Current accounts, savings accounts and fixed-term bonds are all reportable. Additionally, cash ISAs count, even though the UK treats Individual Savings Accounts as tax free. We also report Premium Bonds held with NS&I, because they sit in an account with a UK institution.

Accounts with app-based banks and e-money providers belong on the list as well. Furthermore, old accounts matter. A student account with £40 in it still goes on the report once your total passes the threshold. Therefore, FBAR for Americans in the UK starts with a list of every account you have ever opened here. Close the ones you no longer use.

Investments, ISAs and pensions

Stocks and shares ISAs, general investment accounts and share-dealing accounts are reportable. Furthermore, the cautious and common practice is to report UK pensions, including workplace schemes and SIPPs. Life insurance policies with a cash value also count.

However, reporting an account is only the first step. The funds inside an ISA often raise a separate US problem, which our PFIC reporting service covers. For questions about workplace schemes, SIPPs and lump sums, see our pensions service.

What stays off the report

Some assets fall outside the FBAR. For example, a house or flat that you own directly is not an account. Similarly, the UK State Pension, jewellery, cars and cash at home stay off the form. Shares that you hold directly as a certificate, without a broker, are also excluded.

Nevertheless, some of these assets belong on other US forms. In particular, rent from a UK property goes on your US return, and directly held shares can fall within Form 8938. Therefore, do not assume that an asset is invisible because the FBAR ignores it.

How do you file, and when is it due?

You file the FBAR online, separately from your tax return, and it is due on 15 April with an automatic extension to 15 October. No paper version exists for ordinary filers. Therefore, posting a form with your Form 1040 does not satisfy the requirement.

Filing through the BSA E-Filing System

The report goes through FinCEN's BSA E-Filing System. Individuals can file without registering for an account. Alternatively, a preparer can file for you with your written authorisation.

The system issues a confirmation with a tracking number, which you should keep. In addition, you must keep records of each account for five years from the due date. Those records should show the account name, the number, the institution and the highest balance.

Working out the maximum value

For each account, you report the highest balance during the calendar year. First, find that figure in pounds from your statements. Then convert it to dollars using the year-end rate from the Treasury Reporting Rates of Exchange.

Importantly, you use the 31 December rate even if the peak fell in March. You then round up to the nearest dollar. A reasonable estimate from periodic statements is acceptable, so you do not need a balance for every day. However, you should keep a note of how you reached each figure.

Deadlines for Americans abroad

The FBAR covers the calendar year, not the UK tax year that ends on 5 April. It is due on 15 April following the year end. However, FinCEN grants every filer an automatic extension to 15 October, and you do not need to request it.

Consequently, FBAR for Americans in the UK usually goes in alongside the extended US return in the autumn. Meanwhile, UK deadlines run on a different clock, so plan both together. In practice, we recommend gathering December statements in January while they are easy to download.

FBAR penalties and how to catch up

A missed FBAR can cost up to $10,000 per report when the failure is non-wilful, and far more when it is wilful. The penalty side of FBAR for Americans in the UK sounds alarming. Nevertheless, the IRS offers clear routes back into compliance. Most people who use them properly pay no penalty at all.

Non-wilful and wilful penalties

The law sets the non-wilful penalty at up to $10,000, and that cap rises with inflation each year. In 2023, the US Supreme Court ruled in Bittner v. United States that this penalty applies per report, not per account. As a result, one late form listing twelve accounts counts as one violation.

Moreover, no penalty applies where you can show reasonable cause. In contrast, a wilful failure can cost the greater of $100,000 or half the account balance. Prosecutors can also bring criminal charges in serious cases. Hence, the difference between a mistake and a choice matters a great deal.

Streamlined filing and late FBARs

Two routes exist for people who have fallen behind. If you reported all your income and simply missed the FBARs, you can file them late with a short explanation. However, the IRS no longer publishes a separate procedure for late FBARs, so do not assume that this route is penalty free. The IRS sets out the current routes among its options for taxpayers with undisclosed foreign assets.

Otherwise, the Streamlined Filing Compliance Procedures apply. Under the foreign version, you file three years of returns and six years of FBARs with a non-wilful certification. Importantly, qualifying filers who live abroad pay no penalty. However, both routes close once the IRS contacts you first. Our streamlined filing service handles the full submission.

An illustrative example

Consider how FBAR for Americans in the UK works in a typical case. Sarah is a US citizen who moved to Manchester for work. During the year, her current account peaked at £4,200, her cash ISA held £3,100 and she owned £1,500 of Premium Bonds. No single account looks large.

However, the combined peak of £8,800 is roughly $11,000 at a rate of $1.25 to the pound. Therefore, Sarah must report all three accounts. She owes nothing with the form, and filing takes under an hour once she has the statements. If she had ignored it for four years, she would instead need a formal catch-up filing.

How the FBAR differs from Form 8938

The FBAR and Form 8938 are separate reports, and filing one never replaces the other. Many Americans in Britain file both. Accordingly, you should test each requirement on its own terms.

Two forms with two thresholds

Form 8938 is the FATCA statement of foreign financial assets, and it travels with your tax return to the IRS. Its thresholds are much higher. Specifically, a single filer living abroad files it above $200,000 at year end or $300,000 at any time. For a joint return, the figures are $400,000 and $600,000.

Furthermore, Form 8938 covers some assets that the FBAR ignores, such as shares held directly. The IRS comparison of Form 8938 and the FBAR shows the differences side by side. As a result, FBAR for Americans in the UK is the report that nearly everyone files, while Form 8938 applies to fewer people.

Why UK banks already report you

Your UK bank probably knows that you are American, because it asked when you opened the account. Under FATCA, UK institutions report accounts held by US persons to HM Revenue and Customs. HMRC then passes the data to the IRS under the UK-US exchange of information agreement.

Consequently, the IRS can compare your FBAR with what your bank has already sent. A missing report therefore stands out more each year. Hence, filing accurately and on time is the only sensible approach.

How US UK Tax Experts can help

We handle FBAR for Americans in the UK as part of a joined-up US and UK filing. First, we list every account from your statements and test it against both the FBAR and Form 8938 rules. Next, we convert the balances at the correct Treasury rate and file the report for you. In addition, we check that the income from each account appears on your US return.

Where earlier years are missing, we recommend the right catch-up route before anything goes to the IRS. Furthermore, we prepare the UK Self Assessment from the same file, so both countries see consistent figures. Our FBAR and FATCA reporting service explains the process in more detail.

Conclusion

In summary, FBAR for Americans in the UK is simple in principle and unforgiving in practice. You add up the highest balances of your non-US accounts for the calendar year. If the total passes $10,000, you report every account online by 15 October at the latest.

The form creates no tax. However, ignoring it creates real risk, because UK banks already share your details with the IRS. Therefore, gather your statements early, file every year and deal with any missed years through a formal route. Ultimately, a short annual report is a small price for peace of mind.

Contact us

Do you need help with FBAR for Americans in the UK, or are you unsure whether you should have filed in earlier years? Email us at hello@usuktaxexperts.com. Alternatively, send a short description of your situation through our contact page. We reply within one working day with the filings that apply and the dates that matter.