FBAR and FATCA Explained for UK-Based Americans

FBAR and FATCA are two US foreign-account reporting regimes. FBAR is the Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114 with the Financial Crimes Enforcement Network (FinCEN). FATCA reporting for individuals is done on Form 8938, the Statement of Specified Foreign Financial Assets, which is attached to your US income tax return (Form 1040) and filed with the IRS.

Both are information returns. They report what you hold, not extra tax you owe. You can have nothing more to pay and still be required to file. They are complementary rather than substitutes: filing one does not discharge the other, and many US persons in the UK have to file both.

Crucially, these are US obligations that attach to you as a US person (US citizen or green-card holder, broadly). UK residence does not remove them, and there is no US-UK tax treaty article that switches them off.

You must file an FBAR if the aggregate value of all your foreign financial accounts exceeded 10,000 US dollars at any time during the calendar year. The test is the combined high point across every account, not the balance in any single one, and not the year-end balance.

Two points trip people up. First, it is an aggregate test: five accounts holding 3,000 US dollars each are below 10,000 individually but breach the threshold together. Second, it is an at-any-time test: a one-day spike, for example when a property sale or bonus lands before you move the money, can push you over even if the balance is small the rest of the year.

• Who files: US citizens and other US persons with a financial interest in, or signature authority over, foreign financial accounts.
• Where it goes: FinCEN, electronically, through the BSA E-Filing System. It is not mailed and not filed with the IRS.
• When it is due: 15 April following the year reported, with an automatic extension to 15 October if you miss April (no form is needed to get the extension).
• What it values: report each account at its maximum value during the year, converted to US dollars.

Form 8938 is the individual FATCA report. You file it with the IRS, attached to your annual Form 1040, if the total value of your specified foreign financial assets exceeds the threshold that applies to your filing status. Because you are living abroad, those thresholds are much higher than for someone in the US.

Form 8938 covers a broader set of assets than FBAR. As well as foreign bank accounts, it can include foreign-issued shares and securities held outside an account, interests in foreign entities, and certain foreign financial instruments. FBAR, by contrast, is focused on financial accounts.

To show how much the abroad thresholds matter: a single US person living in the US must file Form 8938 from just 50,000 US dollars at year end (or 75,000 US dollars at any time), and a married couple filing jointly in the US from 100,000 US dollars (or 150,000 US dollars at any time). Living in the UK lifts those figures substantially, as set out below.

The simplest way to keep them straight is that FBAR goes to FinCEN and FATCA Form 8938 goes to the IRS with your 1040, FBAR has a low fixed trigger while Form 8938 has higher status-based triggers, and Form 8938 captures a wider asset set. The table below summarises the contrast.

Because the two regimes overlap but do not match, a UK-based American with, say, 60,000 US dollars across UK current accounts, savings and an ISA would file an FBAR (over 10,000) but might be under the Form 8938 abroad threshold. Add a substantial pension transfer value or foreign shares and you may cross both.

If you qualify as living abroad, the Form 8938 thresholds are set out below. You file if your specified foreign assets exceed the year-end figure, or, separately, if they exceed the higher any-time figure at any point during the year. Married filing separately uses the same figures as a single filer.

These abroad thresholds apply where you meet the IRS living-abroad test for the year. Thresholds and the supporting rules can change, so confirm the current figures and your eligibility for the abroad thresholds with your US preparer before relying on them.

Yes, ordinary UK accounts and many UK savings products count towards these thresholds. Your UK current account, instant-access and fixed savings, and cash held with a UK building society are all foreign financial accounts for FBAR. A UK ISA is not tax-free from the US point of view: a cash ISA is a foreign account, and a stocks and shares ISA holds reportable foreign assets.

UK pensions also matter. Workplace and personal pensions can be reportable for FBAR and Form 8938 depending on how they are structured, and their value can be large enough to push you over the Form 8938 abroad thresholds on its own. The US treatment of UK pensions is technical and is an area where your US preparer should lead; we coordinate the UK reporting alongside.

• Typically in scope: UK current and savings accounts, cash ISAs, building society accounts, and many investment and pension holdings.
• Easy to overlook: joint accounts, accounts you only have signature authority over (for example a parent's or an employer's), and dormant accounts you forgot about.
• The trap: each item may look small, but FBAR is an aggregate test, so several modest UK accounts together can breach 10,000 US dollars.

Take Sarah, a US citizen living and working in London for the whole of the year, filing as single. During the year her UK accounts peaked as follows: current account 4,000 US dollars, savings account 5,500 US dollars, and a cash ISA 3,500 US dollars. The peaks did not all fall on the same day, but FBAR uses each account's maximum value.

Her aggregate high-water figure is 4,000 plus 5,500 plus 3,500, which is 13,000 US dollars. That is above 10,000, so Sarah must file an FBAR reporting all three accounts at their maximum values, even though no single account ever held 10,000.

For Form 8938, Sarah is well under the 200,000 US dollar abroad threshold, so she does not file Form 8938 on these facts. This shows the typical pattern: many UK-based Americans cross the FBAR line long before the Form 8938 line. If Sarah later transferred a 250,000 US dollar UK pension value or acquired substantial foreign shares, she could cross the Form 8938 threshold and would then file both.

Penalties exist for not filing, and they are significant, though they are not automatic and depend on the facts. The headline distinction is between non-wilful failures (an honest oversight) and wilful ones (a deliberate choice to ignore the rules).

• Non-wilful FBAR penalty: a statutory base of about 10,000 US dollars, inflation-adjusted to a ceiling of 16,536 US dollars per report for penalties assessed on or after 17 January 2025. Following the Supreme Court's 2023 Bittner decision, this is charged per annual report, not per account.
• Wilful FBAR penalty: far higher, the greater of 165,353 US dollars (inflation-adjusted) or 50% of the account balance, assessed per account per year.
• Form 8938 penalty: failing to file Form 8938 carries its own IRS penalties, and an unfiled Form 8938 can keep the statute of limitations open on the related return.

The dollar figures above are inflation-adjusted each year, so treat them as indicative and confirm the current ceilings before relying on them. The practical takeaway is simpler: the cost of catching up voluntarily is almost always far lower than the cost of being found out, which is why the Streamlined route below exists.

If you are behind because the failure was non-wilful, the Streamlined Foreign Offshore Procedures are the main route to get compliant. They are designed for US persons abroad whose non-filing was a genuine misunderstanding rather than a deliberate evasion. Eligibility turns on certifying non-wilful conduct and meeting a physical-presence test.

• File amended or delinquent US returns for the most recent three years for which the due date has passed.
• File delinquent FBARs for the most recent six years for which the due date has passed.
• Submit a certification, under penalty of perjury, that your failure to file was non-wilful.
• Meet the non-residency test: no US abode and physically outside the US for at least 330 full days in one or more of the three most recent years.
• Pay any tax and interest due with the returns.

The big advantage of the foreign track is the penalty position. There is no Title 26 miscellaneous offshore penalty (0%), unlike the 5% penalty on the domestic track, and if your submission is accepted the failure-to-file, failure-to-pay, accuracy, information-return and FBAR penalties are waived. The procedures are a US filing matter, so a US preparer should run them; we make sure your UK figures and any UK tax credits feed in correctly.

FBAR and Form 8938 sit alongside your main US return and your UK return; they do not replace either. On the US side you still file Form 1040, and you typically reduce or remove US tax on UK income using the foreign tax credit (Form 1116) or the foreign earned income exclusion (Form 2555). On the UK side you file Self Assessment (SA100, with SA109 where residence or split-year matters).

The US-UK tax treaty and the foreign tax credit are what stop the same income being fully taxed twice, but, to repeat the key point, no treaty article removes the FBAR or Form 8938 reporting itself. Reporting and double-tax relief are different questions: you can owe no extra tax and still have to file the information returns.

Horizon's role is the UK side. We prepare your UK Self Assessment, get the residence and split-year position right, and make sure the numbers your US preparer relies on for the foreign tax credit are correct and consistent. We work to a fixed fee agreed upfront and coordinate directly with your US preparer so nothing falls between the two systems. For more on the wider picture, see our guide for Americans living in the UK.