FBAR Exchange Rate: Converting UK Balances the Right Way

FBAR exchange rate: an introduction

The FBAR exchange rate is the Treasury's reporting rate for the last day of the calendar year. You use it to convert the maximum value of each UK account from pounds into dollars. For 31 December 2025, the Treasury rate for the pound is 0.7430 pounds to the dollar. You divide each sterling balance by that rate and round up to the next whole dollar.

This article explains where the rate comes from, how to apply it and the mistakes we see most often. Our full guide to FBAR and FATCA reporting covers the wider rules for Americans with UK accounts.

Why the FBAR exchange rate matters

An FBAR is the yearly report of foreign financial accounts that US persons file with FinCEN. You must file if your foreign accounts together exceeded $10,000 at any time in the year. The IRS FBAR page sets out that threshold. Because the threshold is in dollars, the conversion rate can decide whether you need to file at all.

Who needs to convert

Almost every American in Britain has accounts in pounds. Current accounts, savings, cash ISAs and stocks and shares ISAs all count as foreign accounts. Therefore, nearly every FBAR filed from the UK involves converting sterling. Getting the method right keeps your figures consistent from year to year.

Which exchange rate does the FBAR use?

The FBAR uses the Treasury's reporting rate of exchange for the last day of the calendar year. If no Treasury rate exists, you use another verifiable rate and give its source.

What the FinCEN instructions say

The FinCEN Form 114 filing instructions tell you to convert using the Treasury rate for the last day of the calendar year. They still refer to the Financial Management Service, which is now the Bureau of the Fiscal Service. The rule itself has not changed. Accordingly, one year-end rate applies to every account in the same currency.

Where to find the Treasury rate

The Bureau of the Fiscal Service publishes the Treasury Reporting Rates of Exchange each quarter. The December figure is the one the FBAR needs. The dataset page notes that Treasury issues amendments if current rates move by 10% or more. Amended rates appear in the online data rather than the printed report.

The pound rates for recent years

The Treasury's 31 December 2025 report gives the United Kingdom pound at 0.7430. The 31 December 2024 report gives 0.7970. The 2025 rate applies to the FBAR for 2025, which was due on 15 April 2026 with an automatic extension to 15 October 2026. Each new year has its own FBAR exchange rate.

How do you convert UK balances for the FBAR?

You find the maximum value of each account in pounds, divide it by the year-end Treasury rate, and round up to the next whole dollar. Each account is valued separately.

Read the rate the right way round

The Treasury report shows how much foreign currency equals one dollar. Its column heading is "Foreign Currency to $1.00". So a rate of 0.7430 means 0.7430 pounds buys one dollar. Consequently, you divide pounds by the rate to get dollars, rather than multiplying. Multiplying by mistake understates every balance by almost half.

Find the maximum value

The maximum value is a reasonable approximation of the greatest value in the account during the calendar year. The FinCEN instructions say periodic statements may be relied on if they fairly reflect that maximum. Therefore, you look across every statement for the highest balance. Notably, this is the peak during the year, not the balance on 31 December.

Round up to the next dollar

The instructions say to round up to the next whole dollar. Their own example records $15,265.25 as $15,266. If an account has a negative value, such as an overdrawn current account, you enter zero. In addition, there is an "amount unknown" box for the rare cases where no value can be worked out.

Joint accounts and several accounts

Each account is valued separately, even at the same bank. For joint accounts, each joint owner generally reports the entire value of the account. However, a spouse can sometimes be covered by the other spouse's report using FinCEN Form 114a. Therefore, a couple in Britain with joint savings often report the full balance on two FBARs.

How does the FBAR exchange rate differ from other rates?

The FBAR and Form 8938 both use the Treasury year-end rate. Your income tax return uses a different basis: the rate when income is received, or a yearly average.

Form 8938

The Form 8938 instructions also use the Bureau of the Fiscal Service rate for the last day of the tax year. They say to use this rate even if you sold or disposed of the asset during the year. Unlike the FBAR instructions, they also allow the rate shown on an annual account statement in some cases. Our article on what FATCA is explains how Form 8938 fits in.

Income on your tax return

For income tax, the IRS page on foreign currency and currency exchange rates says to use the rate prevailing when you receive, pay or accrue the item. The IRS also publishes yearly average currency exchange rates, with 0.759 pounds per dollar for 2025. So your salary may be converted at an average rate, while your FBAR balances use the year-end FBAR exchange rate.

Why the figures will not match

Because the rates differ, your FBAR balances will not reconcile neatly with the interest on your tax return. That is expected. However, the same accounts should appear on both, and the amounts should be broadly consistent. In our experience, a short working paper showing each conversion makes later questions easy to answer.

What about accounts in other currencies?

Each account is converted at the Treasury year-end rate for its own currency. Dollar accounts need no conversion at all. Americans in Britain often hold a mix of all three.

Dollar accounts held in the UK

Some British banks offer US dollar accounts. For these, the FinCEN instructions ask for the largest US dollar value of the account during the year. No exchange rate is involved. However, the account is still a foreign account because it is held at a bank outside the United States.

Euro and other currency accounts

A euro account in Britain, or a bank account kept in France or Spain, is converted at the Treasury's year-end rate for the euro. The same quarterly report lists the euro and most other currencies. Therefore, you use the rate for the account's currency rather than converting through sterling. Where a country has more than one rate, the instructions say to use the rate that would apply on a conversion on the last day of the year.

Stocks and shares ISAs and investment accounts

Investment accounts are valued in the same way, at their maximum value during the year. The value moves with the market, so the highest point may fall between statements. Accordingly, a reasonable approximation from statements and valuations is accepted. You then convert the sterling figure at the FBAR exchange rate, exactly as for a bank account.

Which records should you keep?

Keep the statements that show each maximum value, a note of the rate you used, and the working that links them. Together, these let you answer any question about your FBAR quickly.

Statements for every account

Download statements for the whole calendar year, not just December. Many UK banks only keep statements online for a limited time. In addition, closed accounts can be hard to retrieve later. Therefore, save copies each January while they are easy to find.

A note of the rate and its source

Record the FBAR exchange rate you used and the Treasury report it came from. If you used another verifiable rate, note that source too, as the instructions require. This takes a minute and saves time if the IRS asks how a figure was reached.

How does the rate affect whether you must file?

The $10,000 threshold applies to the dollar total of all your foreign accounts. A change in the year-end rate can push the same sterling balance above or below it.

The same pounds, a different answer

Suppose your accounts peaked at £7,600 in total. At the 2025 FBAR exchange rate of 0.7430, that converts to $10,229, which is over the threshold. At the 2024 rate of 0.7970, the same £7,600 converts to $9,536, which is under it. Therefore, check the threshold each year with that year's rate rather than assuming last year's answer.

Accounts closed during the year

The FBAR instructions do not deal with closed accounts separately. The maximum value test still applies by its own terms, so you report the account's highest balance before closing. By contrast, the Form 8938 instructions say expressly that the year-end rate applies even after a disposal. As a cautious approach, we use the year-end Treasury rate for closed accounts on the FBAR too.

What does a full FBAR conversion look like?

A worked example shows the steps from start to finish. It is an illustration, not a real client.

An example: three UK accounts

Consider a typical case. Laura is a US citizen in Leeds preparing her FBAR for 2025. Her current account peaked at £8,400, her savings account at £12,600 and her cash ISA at £5,000.

Using the FBAR exchange rate of 0.7430, Laura divides each balance by the rate. Her current account becomes $11,306, her savings $16,959 and her ISA $6,730, each rounded up. Together they exceed $10,000, so she must file. She reports each account separately with its own maximum value.

What the example shows

Laura's total in pounds is £26,000, but the FBAR never asks for that figure. Instead, each account is converted and reported on its own. Furthermore, if she had multiplied instead of dividing, every figure would be far too low.

What happens if you get the FBAR wrong?

Errors in conversion are usually fixed by filing an amended FBAR. Missing the FBAR altogether is more serious, because penalties can apply to each late report.

Penalties for non-wilful failures

In Bittner v. United States, the Supreme Court held that the non-wilful penalty applies per report, not per account. The inflation-adjusted maximum is set in 31 CFR 1010.821, at $16,536 for penalties assessed on or after 17 January 2025. Wilful failures carry much higher penalties.

Catching up on missed years

The IRS no longer lists its Delinquent FBAR Submission Procedures, having removed that page in 2026. Therefore, late FBARs on their own should not be treated as a penalty-free route. For most Americans in Britain who missed filings by mistake, the streamlined procedures are the main option. Our guide to IRS Streamlined Filing from the UK explains how it works.

How US UK Tax Experts can help

We prepare FBARs for Americans in the UK, converting every balance at the correct FBAR exchange rate. First, we collect statements and find the maximum value of each account. Next, we convert each one at the Treasury year-end rate and keep a working paper. Finally, we file through FinCEN's BSA E-Filing System and keep the figures consistent with your tax return.

Our FBAR and FATCA service covers the forms each year. We also prepare your US and UK returns from the same records, as our guide to US and UK tax returns prepared together explains.

Conclusion

In summary, the FBAR exchange rate is the Treasury reporting rate for 31 December of the year you report. For 2025, the pound rate is 0.7430, and you divide each sterling maximum by it. You round each account up to the next whole dollar and report each one separately. Above all, use that year's rate and divide rather than multiply.

Contact us

Would you like your FBAR prepared and converted correctly? Email us at hello@usuktaxexperts.com, or tell us about your situation through our contact page. We reply within one working day with what we would need from you.