What is the difference between Schedule B Part I and Part II?

Part I of Form 5471 Schedule B lists US shareholders who own at least 10 percent of the voting power or value of the foreign corporation under section 951(b). Part II lists direct shareholders, meaning anyone who holds stock directly in the corporation, regardless of whether they meet that 10 percent test. A person who is both a US shareholder and a direct shareholder appears on both parts.

How much UK company stock must a US person own to be a US shareholder?

A US person becomes a US shareholder under section 951(b) by owning, directly, indirectly, or through attribution, at least 10 percent of the total combined voting power or total value of the stock of a foreign corporation, including a UK company. This threshold applies separately to voting power and value, so meeting it on value alone still creates a US shareholder for Form 5471 Schedule B purposes.

Does the UK people with significant control register match Schedule B?

Not automatically. GOV.UK guidance sets the people with significant control notification threshold at more than 25 percent of the shares or voting rights of a UK company, while the US shareholder test on Form 5471 Schedule B Part I is 10 percent of voting power or value. A US shareholder can fall below the UK notification threshold while still needing to be listed on Schedule B.

Do several US shareholders of the same UK company each need their own Schedule B?

Generally yes, since each US shareholder normally files their own Form 5471 with its own Schedule B. The IRS instructions do allow certain shareholders in the same filing category, for the same foreign corporation, to file jointly through one designated preparer. Either way, the shares, percentage of vote, and percentage of value reported must be consistent across every Schedule B.

Does Schedule B need to be filed for every year a UK company is owned?

Yes, in most cases. Once a US person meets the ownership thresholds that create a Form 5471 filing obligation, that obligation and the related Schedule B generally continue for each subsequent year the UK company exists, even in a quiet year with no distributions. In a multi-year catch-up filing, a separate Schedule B reflecting the ownership for that year is required for each year filed.

Which filers must complete Form 5471 Schedule B, Part II?

The IRS Instructions for Form 5471 (Rev. December 2025) state that Part II, which reports the direct shareholders of the foreign corporation, must be completed by Category 1a, 1c, 3, 4, 5a and 5c filers. Category 1b and 5b filers, being unrelated section 958(a) US shareholders of a foreign-controlled corporation under the relief announced in Rev. Proc. 2019-40, are not in that list.

Can an incomplete Form 5471 Schedule B keep the IRS assessment period open?

Yes. Internal Revenue Manual 20.1.9 states that where an international information return contains inaccurate or incomplete information, the period of limitations to assess a penalty will not expire before three years after the information required under sections 6038, 6038A, 6038B, 6038D, 6046, 6046A or 6048 is provided to the IRS. Section 6501(c)(8) can also extend assessment for unrelated return items, subject to a reasonable cause exception.

Form 5471 Schedule B: US Shareholders of a UK Company

Q: What is Form 5471 Schedule B?

Form 5471 Schedule B is the schedule attached to Form 5471 that lists the shareholders of a foreign corporation. Part I lists US shareholders as defined under Internal Revenue Code section 951(b), while Part II lists direct shareholders of the corporation regardless of that threshold. For a US person who owns a UK company, both parts must be completed accurately for every year the filing obligation applies.

Form 5471 Schedule B is the two-part schedule attached to Form 5471 on which a US person lists every US shareholder and every direct shareholder of a foreign corporation, including a UK limited company. Part I records US shareholders as that term is defined in Internal Revenue Code sections 951(b) and 958, while Part II records direct shareholders regardless of whether they meet the US shareholder threshold. For a high-net-worth American who owns, or partly owns, a UK company, getting Schedule B right means matching the IRS filing precisely to the underlying UK share register, because HMRC and Companies House hold a parallel record of who actually owns the company.

What is Form 5471 Schedule B?

Form 5471 itself is the Information Return of US Persons With Respect to Certain Foreign Corporations, filed to satisfy the reporting obligations of Internal Revenue Code sections 6038 and 6046, as set out in the IRS Instructions for Form 5471. Schedule B sits inside that return as the ownership ledger. It exists so the IRS can see, in one place, exactly who held stock in the foreign corporation during the tax year and how much of the company each person controlled.

Schedule B is not optional paperwork attached only when convenient. Filers in Categories 1, 3, 4, and 5, as described in the IRS instructions, must complete it as part of a properly filed Form 5471. Because a UK private limited company almost always has a small, identifiable group of shareholders, Schedule B for a UK subsidiary or family trading company tends to be short in form but unforgiving in the accuracy it demands, since every name, address, and percentage must tie back to the statutory position at Companies House.

Who counts as a US shareholder for Schedule B Part I?

A US shareholder, for purposes of Form 5471 Schedule B Part I, is a US person who owns, directly, indirectly, or through the attribution rules, at least 10 percent of the total combined voting power or total value of the stock of the foreign corporation. This is the section 951(b) test, and it applies separately to voting power and to value, so a shareholder can cross the threshold on value alone even without holding 10 percent of the votes. A US person for this purpose is an American citizen, a US tax resident, or a US company, among other categories set out in the Internal Revenue Code.

Section 958 supplies the ownership rules that feed into that 10 percent test. Direct ownership is straightforward: shares registered in the name of the shareholder. Indirect ownership captures shares held through another foreign entity that the US person owns. Constructive ownership goes further still, attributing shares held by close family members and by related entities to the US person being tested, so that a shareholding cannot be fragmented across relatives purely to stay under 10 percent on paper.

What information does Part I of Form 5471 Schedule B require?

Part I of Form 5471 Schedule B asks for a precise identification of every US shareholder, not a summary. On the printed form (Rev. December 2025) the columns are these.

Column (a): the full name, complete address and US identifying number of the shareholder, such as a Social Security number, Individual Taxpayer Identification number or Employer Identification number.
Column (b): a description of each class of stock held by that shareholder. The form notes this description should match the corresponding description entered in Schedule A, column (a).
Column (c): the number of shares held at the beginning of the annual accounting period.
Column (d): the number of shares held at the end of the annual accounting period.
Column (e): the pro rata share of subpart F income for that shareholder, entered as a percentage.
A shareholder holding more than one class of stock takes a separate line for each class, so a UK company with ordinary and alphabet shares produces more lines than it has shareholders.

Note what is not there. Part I carries no percentage-of-voting-power column and no percentage-of-value column, even though those two measures decide who belongs on the schedule in the first place. The 10 per cent vote-or-value test is applied in your working papers; what reaches the form is share counts by class. The figures must reflect the position on the share register of the UK company, not a rounded estimate, and where a shareholder joined or left during the year the opening and closing columns will differ, which is how the IRS sees the movement rather than only a snapshot.

How does Part II differ from Part I?

Part II of Form 5471 Schedule B lists direct shareholders of the foreign corporation, a broader category than Part I. A direct shareholder is anyone who holds stock directly in the foreign corporation, regardless of whether that person independently meets the 10 percent US shareholder threshold used in Part I. Where a US shareholder is also a direct shareholder, which is the common position for an American who personally holds shares in a UK company, the details of that person are entered in both parts.

Part II asks for the name, address and identifying number of the shareholder, and where applicable the country of incorporation or formation, together with a description of each class of stock held and the number of shares held at the beginning and end of the annual accounting period. It carries no pro rata subpart F column. This matters because a UK company with several owners, some American and some not, still needs Part II completed comprehensively enough for the IRS to see the full ownership picture, even though only the US shareholders drive the Part I disclosure and the underlying filing obligation itself.

How does constructive ownership affect Schedule B reporting?

Constructive ownership under section 958 can pull a US shareholder onto Schedule B even when that person holds no shares directly. Stock owned by a spouse, children, or other close family members can be attributed to the individual being tested, as can shares held through a company or partnership in which the individual has an interest. Attribution rules also apply to certain options to acquire stock, treating the option holder as owning the underlying shares for this purpose.

In practice, this means the person preparing Form 5471 Schedule B for a UK company cannot rely solely on the register of members at Companies House. The preparer must also ask whether any family member or related company holds an interest that would be attributed back to the US shareholder, since omitting an attributed holding produces an inaccurate Schedule B even where the register itself is perfectly correct.

Which categories of filer must attach Form 5471 Schedule B?

The IRS instructions for Form 5471 divide filers into categories, and Schedule B is required for filers in Categories 1, 3, 4, and 5. These categories broadly capture US persons who acquire or dispose of shares crossing the relevant thresholds, officers and directors connected to an acquisition by a US shareholder, substantial US shareholders of the foreign corporation, and US shareholders related to a controlled foreign corporation. Category 2 filers, by contrast, generally have a narrower filing obligation that does not extend to Schedule B.

Because category determination drives which schedules apply, a high-net-worth American who is both a director and a shareholder of a UK company should expect Schedule B to be required in most years the company continues to exist, since ownership by a US person, once established, generally keeps the filing obligation live even in a quiet year with no distributions or transactions.

How do you reconcile a UK Companies House register against Schedule B?

A UK company maintains statutory ownership records that a US preparer should treat as the starting point for Schedule B, then test rather than accept blindly. The register of members records the legal shareholders of the company. Separately, GOV.UK guidance on people with significant control requires most UK companies to identify anyone with more than 25 percent of the shares or voting rights, or other significant influence, and to notify that information to Companies House.

These two UK sources rarely map onto Schedule B without adjustment. The register of members shows legal ownership, which usually matches Part II of Schedule B, but percentage of value under US rules can differ from percentage of shares under UK company law where the company has more than one class of stock. The people with significant control notification threshold of 25 percent is also a different test from the 10 percent US shareholder threshold in Part I, so a US shareholder can sit below the UK notification threshold while still triggering Form 5471 Schedule B in the United States.

The current register of members held at the registered office of the company or by its formation agent.
The confirmation statement most recently filed at Companies House.
The people with significant control notifications filed with Companies House.
Any share certificates or stock transfer forms evidencing changes during the year.
Board minutes recording share allotments, transfers, or buybacks.

What about nominee and joint holdings on a UK share register?

UK share registers sometimes show a shareholding in the name of a nominee company rather than the beneficial owner, particularly where shares were issued through a corporate formation agent or an investment platform. For Form 5471 Schedule B, the IRS is generally interested in beneficial ownership, so a US person whose shares are held through a nominee arrangement still needs to be identified and listed, with the nominee structure noted so the filing is not mistaken for third-party ownership.

Joint holdings raise a related issue. Where a UK company register shows two US persons holding shares jointly, the proportionate interest of each joint holder still needs to be reflected accurately on Schedule B, and both individuals may separately need to consider their own Form 5471 filing obligation, since a joint holding does not automatically mean only one of the two owners has a reporting requirement.

A worked example: three US shareholders of a UK trading company

Consider an illustrative example. Thames Analytics Ltd is a UK trading company with three American shareholders and no other owners. Shareholder A holds 60 percent of the ordinary shares and is also a director. Shareholder B holds 25 percent, having bought shares from a departing founder partway through the accounting period. Shareholder C holds 15 percent and has no other role in the company.

Each of the three is a US shareholder under the 10 percent test, so each appears in Part I of Form 5471 Schedule B on every one of their own returns, showing the beginning and ending percentage of vote and value for the year, which for Shareholder B means showing both the pre-purchase and post-purchase position. Because all three also hold shares directly, all three also appear in Part II. The people with significant control notification made by Thames Analytics Ltd to Companies House would separately capture Shareholder A and Shareholder B as individuals with more than 25 percent, while Shareholder C would generally fall below that UK notification threshold despite still needing to be reported for Form 5471 Schedule B purposes.

This example illustrates why the two regimes cannot simply be copied across. Companies House and HMRC records answer a UK company law question, while Form 5471 Schedule B answers a US federal tax question, and a preparer who assumes the two thresholds align will misstate at least one position on the register.

How do multiple US shareholders of the same UK company keep Schedule B consistent?

When several US shareholders of the same UK company each file their own Form 5471, the IRS instructions permit certain filers in the same category, with respect to the same foreign corporation, to file a single, joint Form 5471 rather than duplicating the entire return, provided one shareholder is designated to prepare it and every other included shareholder attaches the required statement to their own return. Even where each shareholder files separately, the underlying Schedule B figures for shares, percentage of vote, and percentage of value need to match across every return, because the IRS is looking at the ownership of one company from several angles at once.

In practice, this calls for one coordinated data set for the UK company each year, drawn from the same register of members and the same confirmation statement, rather than each US shareholder independently estimating their own percentage. A high-net-worth family with several members holding stock in the same UK company should treat Schedule B preparation as a single, coordinated exercise across all the affected Form 5471 filings, not a series of unconnected individual tasks.

How does Schedule B work in a late or multi-year catch-up filing?

Where several years of Form 5471 have gone unfiled for a UK company, each year requires its own Schedule B reflecting the ownership position for that specific accounting period, not the current-year position applied retrospectively. The shareholder register of a UK company commonly changes over several years through share issues, buybacks, or a sale of shares between shareholders, so a multi-year catch-up filing needs a separate reconciliation of the register, and where relevant the people with significant control notifications, for every year being filed.

This is where the historical Companies House filing history becomes essential evidence. Companies House retains confirmation statements and prior filings that show the shareholder position at each year end, and these documents are frequently the only reliable way to reconstruct an accurate Part I and Part II for years where contemporaneous US records were not kept, making meticulous historical reconciliation a core part of preparing accurate catch-up Form 5471 filings for a UK company.

What common Schedule B errors trigger IRS scrutiny?

Certain Schedule B mistakes recur often enough in UK company filings to be worth naming directly, since each one is straightforward to prevent with a careful reconciliation against the records of the UK company itself.

Reporting only the closing share count and leaving the beginning-of-period column blank when ownership changed during the year.
Omitting a US person who crossed the 10 per cent threshold during the year but held nothing at the year end, when Part I is tested at any time during the annual accounting period.
Confusing percentage of shares under UK company law with the percentage of vote and percentage of value used in the section 951(b) test.
Entering a class description on Schedule B that does not match the wording used in Schedule A, column (a).
Leaving out a US shareholder who holds no direct shares but meets the threshold only through constructive ownership.
Using an outdated identifying number or address that no longer matches the current US filing details of the shareholder, or changing the reference ID number for the UK company between years.
Filing inconsistent share counts across two or more shareholders of the same UK company.

Preparing Form 5471 Schedule B for high-net-worth filers

Sound preparation of Form 5471, including Schedule B Part I and Part II, works directly from the Companies House filings of the company, its register of members, and its people with significant control notifications, to build a Schedule B position that reconciles exactly to the UK statutory record for every year required. Where several US shareholders hold stock in the same UK company, the preparation should be coordinated across every affected filing so the figures agree.

For a multi-year catch-up filing, the same disciplined approach applies to each year separately, reconstructing the shareholder position from historical Companies House records rather than applying a current snapshot backwards. This is comprehensive US tax preparation and compliance work built specifically around the realities of UK company ownership, delivered with the technical accuracy that Form 5471 Schedule B demands.

Which Form 5471 Schedule B rules change with your filer subcategory?

Categories 1 and 5 each split three ways, and the split decides how much of the schedule you complete. The IRS Instructions for Form 5471 (Rev. December 2025) define a Category 5b filer as an unrelated section 958(a) US shareholder of a foreign-controlled CFC: one who owns stock within the meaning of section 958(a) and is not related to the corporation under section 954(d)(3) principles. A Category 5c filer is a related constructive US shareholder, owning nothing under section 958(a) but related. Categories 1a, 1b and 1c mirror this for a foreign-controlled section 965 specified foreign corporation.

Category 1a or 5a: a Category 1 or Category 5 filer falling into neither the b nor the c subcategory.
Category 1b or 5b: an unrelated section 958(a) US shareholder, implementing relief announced in Rev. Proc. 2019-40.
Category 1c or 5c: a related constructive US shareholder, owning no section 958(a) stock but a related party.
Category 3 and Category 4 filers sit outside the split and are the categories that complete Part I.

The effect is precise. The instructions state that Part II must be completed by Category 1a, 1c, 3, 4, 5a and 5c filers, so the unrelated section 958(a) US shareholder in Category 1b or 5b appears there in neither. What the others report also differs: Category 4 filers list all direct owners; Categories 1a, 3 and 5a list the owners through which they indirectly own the corporation under section 958(a)(2); Categories 1c and 5c list those from which ownership is attributed under section 958(b).

How does downward attribution make a UK company a foreign-controlled CFC?

The Tax Cuts and Jobs Act repealed section 958(b)(4), and IRS guidance explains the consequence: stock owned by a foreign person can be attributed downward to a US person under section 318(a)(3) when testing controlled foreign corporation status. The instructions define a foreign-controlled CFC as a corporation that is a CFC but would not be one if the determination were made without applying subparagraphs (A), (B) and (C) of section 318(a)(3) so as to consider a US person as owning stock owned by a foreign person.

In the IRS illustration a domestic corporation owns 15 per cent of a foreign parent that wholly owns both a domestic corporation and a second foreign corporation, which becomes a foreign-controlled CFC only through that attribution. The minority holder is a Category 5b filer, the related domestic subsidiary a Category 5c filer. Put a UK trading company in that second position and the shape is familiar: the instructions confirm the two cannot file jointly, so only one return carries a completed Part II.

Vote or value: what changes when the UK company has several share classes?

Schedule A, headed Stock of the Foreign Corporation, asks for a description of each class of stock and the shares issued and outstanding at the start and end of the annual accounting period. Column (b) of both Parts of Schedule B asks for a description of each class held by the shareholder, and the printed form notes that this description should match the corresponding description entered in Schedule A, column (a). Columns (c) and (d) ask for share counts, not percentages.

The percentages sit behind the schedule rather than on its face. Part I is completed for US persons owning, at any time during the annual accounting period, directly or indirectly through foreign entities, 10 per cent or more of the total combined voting power of all classes of stock entitled to vote, or 10 per cent or more of the total value of all classes of stock. Control is tested the same way at more than 50 per cent. Ordinary, preference, alphabet and growth shares each drive those two measures apart, so a UK holder can clear 10 per cent on value while holding few votes, or the reverse.

An illustrative example: a UK company with ordinary, preference and alphabet shares

This example is illustrative and the figures invented. A UK trading company has three classes in issue throughout the period: 800 ordinary shares with one vote each and full participation, 150 A ordinary shares with no votes but full participation, and 50 preference shares with no votes and capital capped at nominal. Alex, a US citizen in London, holds 400 ordinary. Priya, a US citizen, holds 100 ordinary and all 150 A ordinary. Tom, with no US status, holds 300 ordinary. An unconnected UK company holds the preference shares.

Across the 800 ordinary shares, Alex holds 50 per cent of the votes, Priya 12.5 per cent and Tom 37.5 per cent. Across the 950 participating shares, Alex holds roughly 42 per cent of value, Priya roughly 26 per cent and Tom roughly 32 per cent, figures a defensible file supports with a valuation of the rights set out in the articles. Both Alex and Priya are US shareholders, and together they hold 62.5 per cent of the votes, so the company is a CFC.

Schedule A shows three lines, with 800, 150 and 50 shares at each date. Part I lists Alex and Priya, Priya taking two lines because she holds two classes, each repeating the Schedule A wording, with share counts and, in column (e), her pro rata share of subpart F income entered as a percentage. Part II lists every direct shareholder, so it also carries Tom and the corporate preference holder, for which the form asks country of incorporation or formation. Those counts must reconcile to Schedule A, and the column (e) percentage must agree with the income reported elsewhere in the return.

How does the reference ID number tie Form 5471 Schedule B to the rest of the return?

A UK company usually has no EIN, so the reference ID number at item 1b(2) becomes the identifier everything hangs from. It is required only where no EIN was entered at item 1b(1), though both may be given. The IRS defines it as a number established by or on behalf of the US person filing, assigned to the foreign corporation so as to identify it uniquely from tax year to tax year, with no application process.

Alphanumeric only, with no special characters or spaces, and limited to 50 characters.
The same number must be used consistently from tax year to tax year for a given foreign corporation.
A number falling out of use, on a disposition or liquidation, cannot be reused for another foreign corporation.
On a merger or acquisition the new number goes in item 1b(2) and the previous number in item 1b(3), in the first year only.
Entries such as FOREIGNUS or APPLIED FOR are no longer permitted where an identifying number is requested.

The number reaches beyond Form 5471. Where Schedule A or Schedule B of Form 8992 is filed for the same CFC, the reference ID number must match, and it is also entered on Form 8858 where the foreign corporation is the tax owner of a foreign disregarded entity or foreign branch. For a UK company that has changed its name at Companies House, the reference ID is often the only thread tying this year Schedule B to last year.

Is Form 5471 Schedule B required under the dormant company summary procedure?

No. The instructions point to Rev. Proc. 92-70, 1992-2 C.B. 435, a summary filing procedure for a dormant foreign corporation which the IRS states will satisfy the reporting requirements of sections 6038 and 6046. A filer electing it completes only page 1, labels the top margin Filed Pursuant to Rev. Proc. 92-70 for Dormant Foreign Corporation, and gives filer name and address, items A through C, the tax year, the accounting period and items 1a to 1d. Schedule B forms no part of that package.

The trap is the word dormant, which does not carry the same meaning on both sides: a company can be dormant for Companies House purposes and still fail the definition in section 3 of the revenue procedure. Because item 1b sits inside the reduced page 1 disclosure, the reference ID number must still be assigned and used consistently, so the years line up under one identifier when a full return with Schedule B resumes.

Does an incomplete Schedule B keep the assessment period open?

It can, which makes a thin Schedule B a whole-return problem. Internal Revenue Manual 20.1.9 states that where an international information return contains inaccurate or incomplete information, the period of limitations to assess a penalty for failure to provide the required information will not expire before three years after that information, required under sections 6038, 6046 and related provisions, is provided to the IRS. Section 6501(c)(8) also extends assessment for unrelated items, subject to a reasonable cause exception.

The penalty exposure runs alongside. The instructions set a 10,000 dollar penalty for each annual accounting period of each foreign corporation for failing to furnish the information required by section 6038(a) on time, a further 10,000 dollars for each 30-day period once 90 days have passed since the IRS mailed notice, capped at 50,000 dollars per failure, and a 10 per cent reduction of foreign taxes available for credit under sections 901 and 960.

How should a shareholder who joined or left partway through the period appear?

Columns (c) and (d) are snapshots, not a transaction history. They ask for shares held at the beginning of the annual accounting period and at the end, so a shareholder who sold out in month seven shows an opening figure and a nil closing figure, and one who subscribed in month nine shows the reverse. Neither column defines who belongs on the schedule.

That is the point most often missed. Part I is completed for US persons owning the relevant 10 per cent interest at any time during the annual accounting period, so a US person who held 30 per cent for eight months and nothing at the year end still belongs there, with zero in column (d). Preparers working from the closing register alone omit those people systematically.

The UK records make reconstruction possible if they are read in order. Stock transfer forms give the dates of movement and the register of members the sequence of entries, while the confirmation statement, which GOV.UK guidance describes as the point at which shareholder information and the statement of capital can be updated, holds only a snapshot, on a date that will rarely match the accounting period used on Form 5471.