Introduction The FBAR is one of six documents required by the US tax amnesty program for Americans abroad. It is also one of the most commonly prepared incorrectly — because the rules governing which accounts must be reported, how the $10,000 threshold is calculated, and what the 2023 Supreme Court ruling in Bittner v United […]
The FBAR is one of six documents required by the US tax amnesty program for Americans abroad. It is also one of the most commonly prepared incorrectly — because the rules governing which accounts must be reported, how the $10,000 threshold is calculated, and what the 2023 Supreme Court ruling in Bittner v United States means for penalty exposure are genuinely technical and unfamiliar to most non-filers.
A Streamlined submission that omits a qualifying account from the FBAR does not obtain the full penalty waiver for that account. A submission that uses year-end balances instead of peak balances is inaccurate. An incomplete submission does not include a closed account that was open during the year and satisfied the threshold. And a submission that misunderstands the Bittner ruling may discourage a taxpayer from acting when action is the only sensible option.
This guide covers every FBAR rule that matters within a Streamlined submission — the $10,000 aggregate threshold, which accounts qualify, joint accounts, signature authority accounts, closed accounts, inherited accounts, and the post-Bittner penalty calculation. Visit our US-UK cross-border tax advisory service:
https://www.jungletax.co.uk/services/us-uk-tax/
The US tax amnesty program for Americans abroad — the IRS Streamlined Foreign Offshore Procedures — requires six years of FBAR filings as part of the submission. The Financial Crimes Enforcement Network, not the IRS, receives the FBAR, or FinCEN Form 114. It is a financial crimes disclosure, not a tax return. Every US person who holds a financial interest in — or signature authority over — a foreign financial account with an aggregate balance exceeding $10,000 at any point during the calendar year must file an FBAR for that year.
The Streamlined program waives the FBAR penalty for non-wilful non-filers who file a complete and accurate submission. Completeness requires that every qualifying account appear on every FBAR for every year in which the threshold was met. Accuracy requires that the peak balance — not the year-end balance — is reported for every account.
The additional US tax owed within a Streamlined submission is often modest, because the Foreign Tax Credit eliminates most of the US tax on UK employment income. The FBAR penalty exposure — which the submission waives — is typically the largest financial risk the program resolves. Post-Bittner, the non-wilful FBAR penalty is $10,000 per annual report (not per account per year). Six years of missing FBARs produces a theoretical maximum non-wilful penalty of $60,000. The Streamlined submission eliminates this exposure — but only for a complete and accurate FBAR set.
The IRS’s FBAR requirements guidelines can be found at:
This guide covers US citizens living in the UK who are preparing — or planning to prepare — a US tax amnesty program for Americans abroad submission and who want to understand exactly which accounts must appear on the FBAR, how to calculate the threshold, and how the Bittner ruling affects their penalty exposure.
The Supreme Court’s February 2023 decision in Bittner v United States held that the non-wilful FBAR penalty applies per annual report — not per account per year. Before Bittner, the IRS argued that the $10,000 non-wilful penalty applied separately to each unreported account in each year. A taxpayer with three accounts and six years of missing FBARs faced a theoretical maximum exposure of $180,000. After Bittner, the same taxpayer’s maximum non-wilful exposure is $60,000 — six annual reports at $10,000 each, regardless of the number of accounts. The Bittner ruling significantly reduced the theoretical penalty exposure for most non-filers.
Every year, UK banks submit account information for US citizens to HMRC. HMRC passes that data to the IRS. The IRS holds FATCA data for every account reported by UK financial institutions — and matches it against the FBARs they file. A Streamlined submission that omits an account visible in the IRS’s FATCA data is not complete. The adviser confirms FATCA reporting status for every account before the FBAR is prepared — to ensure that no account visible to the IRS is omitted from the submission.
Our guide on what happens after the Streamlined submission is at:
A foreign financial account that was closed during one of the six FBAR years must still be reported for any year in which it was open and the threshold was met. An account inherited during the six years must be reported from the date of inheritance. Many non-filers omit closed accounts entirely — assuming they are no longer reportable. Others do not know that an inherited account is subject to the FBAR obligation from the date of inheritance. Both are material omissions.
The FBAR level is not per account, but rather aggregate. If the combined maximum value of all foreign financial accounts exceeded $10,000 at any point during the calendar year, every account must be reported, regardless of the individual account balance. A taxpayer with five UK accounts, each peaking at £2,200 during the year — a combined peak of £11,000 — must report all five accounts on the FBAR, even though no single account exceeded the threshold individually.
The aggregate threshold applies to the peak value — not the year-end value. A taxpayer whose accounts collectively peaked at £12,000 in April but fell below £8,000 by December must still file the FBAR for that year — because the aggregate maximum value exceeded $10,000 at some point during the year. Sterling balances are converted to US dollars using the Treasury Reporting Rates of Exchange for 31 December of the relevant year.
A foreign financial account is any financial account maintained with a financial institution located outside the United States. For UK residents, this includes: UK current accounts, UK savings accounts, UK Cash ISAs, UK Stocks and Shares ISAs, UK Innovative Finance ISAs, UK Lifetime ISAs, UK SIPPs, UK investment accounts held at brokerage firms, UK offshore bonds, and any other account held at a UK-regulated financial institution.
The account need not hold fiat currency. An account that holds securities or funds — such as a Stocks and Shares ISA or a SIPP — is a foreign financial account for FBAR purposes if its aggregate market value exceeded the threshold. The reportable value is the account’s peak market value at any point during the calendar year — not the cash balance. An employer-sponsored pension scheme may also qualify — the adviser reviews the specific pension structure to confirm.
A joint account — held with a UK spouse or partner — must be reported by every US person who holds a financial interest in the account. The value reported for the joint account is the full balance — not the US person’s proportionate share. A US person who holds a 50 percent interest in a joint account with a peak balance of £30,000 reports £30,000 on their FBAR — not £15,000.
A signature authority account is an account over which a US person has authority to control the disposition of assets — such as a business account managed by a US-citizen employee. A US citizen who is a signatory to their UK employer’s business account may have an FBAR signature authority obligation — even though they have no financial interest in the account. The adviser reviews all accounts over which the client has signatory authority before preparing the FBAR.
A foreign financial account that was open during one of the six FBAR years — even if subsequently closed — must be reported for any year in which it was open and the threshold was met. Closed accounts do not eliminate the FBAR obligation — they must be reported for each open year in which the threshold was met.
An inherited foreign financial account is subject to the FBAR obligation as of the date of inheritance. A US citizen who inherited a UK savings account during the six-year FBAR period must report that account on the FBAR from the year of inheritance through the end of the period. The adviser specifically asks about inherited accounts during the initial assessment because they are commonly omitted.
The adviser begins by identifying every foreign financial account held during the six FBAR years — including accounts that are currently closed, accounts that were inherited, and accounts over which the client has signature authority. The adviser asks specifically about: all UK current accounts, all UK savings accounts, all ISAs, all SIPPs and workplace pensions, all investment accounts, all accounts at building societies, and any accounts held in other countries.
For each account identified, the adviser obtains the account number, the name of the financial institution, and the financial institution’s address. Closed accounts require the same information — the adviser requests the original account opening documentation or the most recent statement from the closed account to confirm the account number.
For every account in every year, the adviser requests monthly or quarterly statements covering the full twelve-month period. Year-end statements alone are insufficient. The adviser reviews every statement to identify the highest balance in each month — and uses the highest figure across all twelve months as the peak balance for that year.
For investment accounts — ISAs and SIPPs holding funds or equities — the peak value is the highest market value of the account during the year. This requires reviewing portfolio valuations across the year — not just the cash balance. UK investment platforms do not automatically provide this in the format required. The adviser requests the relevant data from the platform before preparing the FBAR.
Sterling balances are converted to US dollars using the Treasury Reporting Rates of Exchange for 31 December of the relevant year. The US Treasury publishes these rates annually. The adviser applies the December 31 rate for the relevant year to every sterling balance — not the current or average rate.
The FBAR is filed electronically through the FinCEN BSA E-Filing System. Each FBAR covers one calendar year and lists every qualifying account, including the account number, the financial institution’s name and address, the type of account, and the maximum value during the year. The FinCEN BSA E-Filing System is at:
https://bsaefiling.fincen.treas.gov/main.html
Before filing, the adviser confirms that the $10,000 aggregate threshold was met in each year for which an FBAR is being filed — and that no FBAR is filed for years in which the aggregate peak balance did not exceed the threshold. The adviser also confirms that every account visible in the IRS’s FATCA data appears on the FBAR for every applicable year.
The adviser presents the completed FBAR set to the client for review — confirming every account number, every institution name, and every peak balance figure — before the FBARs are filed. The client approves the FBAR set before filing.
Michael is a US citizen. He has been a UK resident for eleven years. He contacted Jungle Tax to prepare a Streamlined submission. His account position across the six FBAR years was more complex than he initially described.
At the initial assessment, Michael disclosed: a Barclays current account, a Lloyds savings account, and a Stocks and Shares ISA with Vanguard. During the document-gathering process, three additional accounts emerged: a Halifax savings account, closed in year three; a joint current account held with his UK wife (Nationwide, peak balance of £28,000 in year one); and a defined-benefit workplace pension from a former UK employer.
The Halifax closed account was included on the FBARs for years one through three — the years in which it was open, and the aggregate threshold was met. Michael obtained historical statements from Halifax via a data subject access request.
The joint Nationwide account was reported on Michael’s FBAR at the full peak balance — £28,000 — for each year it was held, even though Michael held only a 50 percent interest. The UK wife had no FBAR obligation.
The defined benefit pension was reviewed. A defined benefit scheme where the participant has a defined entitlement but no individual account balance does not clearly meet the FBAR definition of a foreign financial account. The adviser reviewed the FinCEN guidance and concluded that the defined benefit scheme did not require FBAR reporting. A note was included in the submission documentation explaining the analysis.
The complete FBAR set covered six years of five accounts. The theoretical non-wilful FBAR penalty exposure — post-Bittner — was $60,000 (six annual reports). The Streamlined submission eliminated this exposure.
The most common FBAR error is using year-end account statements rather than monthly statements. The FBAR requires the maximum value during the calendar year — not the December 31 balance. A current account that receives a salary payment in November and largely spends it by December has a December balance significantly lower than its November peak. Reporting the December balance understates the required disclosure.
A foreign financial account that was closed during one of the six FBAR years must be reported for any year in which it was open, and the threshold was met. Many clients assume that closed accounts are no longer reportable. Historical statements for closed accounts can be obtained from most UK banks via a data subject access request — even for accounts closed several years ago.
A joint account must be reported at its full peak balance — not the US person’s proportionate share. A US citizen who holds a 50 percent interest in a joint account with a peak balance of £40,000 must report £40,000 on the FBAR — not £20,000. Reporting only the proportionate share understates the required disclosure.
The FBAR is required only in years where the aggregate peak balance exceeded $10,000. Some clients file six FBARs regardless of whether the threshold was met. Others omit years where the threshold was marginally exceeded. The adviser confirms the threshold calculation for each year — filing FBARs only for years in which the aggregate peak exceeded $10,000.
The FinCEN guidance on FBAR reporting requirements is at:
https://www.fincen.gov/report-foreign-bank-and-financial-accounts
An inherited foreign financial account is subject to the FBAR obligation as of the date of inheritance. A non-filer who inherited a UK savings account from a parent may not consider it their account for FBAR purposes. The advice asks specifically about inherited accounts during the initial assessment — any account received through inheritance in the past 6 years is subject to FBAR reporting.
Jungle Tax is a specialist US-UK cross-border tax advisory firm whose team includes IRS Enrolled Agents and UK-qualified tax practitioners with specific experience preparing complete and accurate FBAR sets for submissions under the US tax amnesty program for Americans abroad. We conduct a comprehensive account inventory at the outset of every Streamlined engagement, specifically asking about closed, joint, inherited, and signature-authority accounts. We request monthly statements for every account for the full six-year period to calculate accurate peak balances. We apply the correct Treasury exchange rate for each year. We confirm the $10,000 aggregate threshold for each year — filing FBARs only for years where the threshold was met. We present the completed FBAR set to the client for review before filing.
Find further information on our advisory service:
https://www.jungletax.co.uk/services/us-uk-tax/
Read our related FBAR and FATCA reporting guide:
https://www.jungletax.co.uk/jungle-tax-news-updates/irs-streamlined-filing-compliance-fbar-fatca/
The FBAR is the foundation of any US tax amnesty program for the submission by Americans abroad. Getting it right — with accurate peak balances, every qualifying account included, and the correct threshold calculation for each year — is what separates a complete submission that obtains the full penalty waiver from an incomplete one that does not.
Three points matter most. First, the threshold is aggregate — not per account. Every foreign financial account must be reported if the combined peak value exceeded $10,000 at any point during the year. Second, closed, joint, and inherited accounts must all be included where the threshold was met. Third, the post-Bittner penalty is $10,000 per annual report — not per account per year. Six years of missing FBARs produces a maximum non-wilful exposure of $60,000, which the Streamlined submission eliminates.
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The threshold is aggregated across all foreign accounts. If the combined peak exceeded $10,000 at any point in the year, every account must be reported on the FBAR for that year.
Yes. Report the full peak balance — not your share. A £30,000 joint account is reported at £30,000, not £15,000. Your UK spouse has no FBAR obligation as a non-US person.
Yes — for any year the closed account was open, and the threshold was met. Obtain historical statements from the bank via a data subject access request for closed account records.
The 2023 Bittner ruling confirmed the non-wilful penalty is $10,000 per annual report, not per account. Six missing FBARs = $60,000 maximum, regardless of how many accounts were unreported.
Yes. Both are foreign financial accounts. Report the peak market value during the year — not just the cash balance. Many non-filers omit these, which makes the submission incomplete.
Yes, from the date of inheritance. An inherited UK account is reportable from the year you received it through the end of the six-year FBAR period covered by the submission.
