I own exactly 50 percent of my family's UK investment company. Do I have to report its accounts on my FBAR?

Not on the ownership test. 31 CFR 1010.350(e)(2)(ii) requires more than 50 percent of the voting power or of the total value of the shares, so an exact half share falls outside it. Check the second route before concluding you have no filing to make: if you are a director, or are on the bank mandate, or can instruct the investment manager, you have signature or other authority over the same accounts and file on that basis instead.

I am a director of my family's investment company but hold no shares. Does that really create a personal FBAR?

Yes. 31 CFR 1010.350(f) defines signature or other authority as the ability of an individual to control the disposition of money in an account by direct communication with the institution. Ownership is irrelevant, and so is whether you ever used the authority. If your reportable accounts exceed 10,000 US dollars in aggregate at any point in the year, you file your own FinCEN Form 114 listing the company's accounts.

Can the UK family investment company file one consolidated FBAR covering the whole family?

No. The consolidated report is available only to an entity that is itself a United States person and that owns more than 50 percent of another entity required to report. A company incorporated in England and Wales is not a United States person under 31 CFR 1010.350(b), so it has no FBAR obligation of its own and cannot file for anyone else. Individuals cannot consolidate at all; each person files separately.

Do the company's bank and custody accounts also go on my Form 8938?

No. Form 8938 has no look-through for accounts held by a foreign company. IRS guidance confirms that where an asset is held through a foreign entity, it is the interest in the entity that is reported, and stock in a foreign corporation held outside a financial account is itself a specified foreign financial asset. So the shares in the family investment company are reportable; the company's own accounts are not separately listed by the shareholder on that form.

Does anything we file with HMRC or Companies House cover the FBAR?

Nothing. Statutory accounts, the confirmation statement, the Company Tax Return and Self Assessment all go to UK authorities and none of them reaches FinCEN. The FBAR is a separate US report filed electronically through the BSA E-Filing System by each individual with a financial interest or signature authority. UK filings are useful as evidence when rebuilding missed years, but they never satisfy the obligation.

How many FBAR accounts does a discretionary custody portfolio actually produce?

Usually one per account relationship, not one per holding. A custody or dealing account with an institution in the business of buying, selling, holding or trading securities is a single securities account reported at its own maximum value, and the funds and shares inside it are not separate accounts. Nominee arrangements do not add accounts. Only genuinely distinct account numbers with distinct statements are reported as distinct accounts.

Missed FBAR: Family Investment Company Accounts

A missed FBAR on family investment company accounts is one of the most expensive filing gaps we unwind for American families in Britain, and it almost always begins with the same reasonable-sounding thought: the accounts belong to the company, not to me. Under the FBAR regulations at 31 CFR 1010.350 that thought is wrong in two separate ways. A US person who owns, directly or indirectly, more than 50 percent of the voting power or the total value of the shares of a company is treated as having a financial interest in every foreign financial account that company owns. And a US person who can tell the bank what to do with the money in a company account has signature or other authority over it whether or not they hold a single share.

So the report is personal. It is filed by the individual, on FinCEN Form 114, in their own name, listing the company's accounts. The family investment company itself, being a UK limited company, files nothing with FinCEN at all. The route back depends on one question only: were the US income tax returns for those years also wrong? If the returns were correct and only the reports were missed, the late Forms 114 go through FinCEN's BSA E-Filing System at bsaefiling.fincen.treas.gov with a reason for filing late recorded on each report. If the returns were also wrong, the Streamlined Foreign Offshore Procedures set out at www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-states cover the returns and six years of reports in a single submission.

What Is a Family Investment Company, and Why Does It Create FBAR Exposure?

A family investment company is a private UK limited company, incorporated at Companies House, whose purpose is to hold and manage a family's investment capital rather than to trade. The share structure is usually deliberate: founder shares carrying votes, growth or alphabet shares carrying value, sometimes non-voting shares held by adult children. The company holds the money. Individuals hold the company.

That structure is what creates the FBAR problem, because the FBAR rules do not care who is named on the bank mandate. They care about two relationships to an account, defined separately in 31 CFR 1010.350 and reproduced on the IRS page at www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar: financial interest, and signature or other authority. A family investment company manufactures both at once, and it hands them to different people. In the engagements we take on, the shareholder and the person with the bank mandate are frequently not the same individual, and neither of them has ever filed.

A typical FIC balance sheet produces more reportable accounts than families expect. The company rarely holds one account; it holds a small estate of them.

A sterling business current account with a UK clearing bank, used for subscriptions, dividends and professional fees
A deposit or notice account holding uninvested cash
One or more custody or dealing accounts with a discretionary investment manager or platform
Currency accounts, often US dollar and euro, opened to settle trades without conversion
A separate account for a subsidiary or a property-holding company beneath the FIC

When Does a Missed FBAR on Family Investment Company Accounts Arise From Ownership?

The ownership test is a bright line and it is not a majority test in the loose sense. Under 31 CFR 1010.350(e)(2)(ii), a United States person has a financial interest in a foreign financial account where the owner of record or holder of legal title is a corporation in which that person owns, directly or indirectly, more than 50 percent of the voting power or more than 50 percent of the total value of the shares. The regulation is at www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-C/section-1010.350 and it is worth reading before you conclude you are outside it.

Three features of that sentence do the damage in family structures. First, it is an either-or test: voting power or total value. A founder holding a small number of voting shares in a FIC can be over the line on votes while holding almost none of the economic value, and is squarely a filer. Second, indirect ownership counts, so a chain of holdings through another company is traced through rather than ignored. Third, exactly 50 percent is not more than 50 percent. A clean 50-50 split between a US-person parent and a UK-resident spouse defeats the ownership test entirely, which is why the second route into the rules, signature authority, matters so much in practice.

There is also an anti-avoidance provision. 31 CFR 1010.350(e)(3) gives a United States person a financial interest in the accounts of an entity where that person caused the entity to be created for a purpose of evading the reporting section. We raise this not because most family investment companies are abusive - they are usually established for ordinary commercial and family governance reasons that have nothing to do with US reporting - but because contemporaneous evidence of why the company was formed is worth keeping in the file.

Voting power above 50 percent triggers the rule even where economic value is small
Value above 50 percent triggers the rule even where the shares carry no votes
Indirect ownership through an intermediate company is traced, not ignored
Exactly 50 percent does not meet the test; 50.01 percent does
A person who caused an entity to be created to evade the section is treated as having a financial interest regardless of the percentages

The Director With No Shares: The Most Commonly Missed Filer in a FIC

This is the filer nobody finds, because nobody is looking at the board minutes. 31 CFR 1010.350(f) defines signature or other authority as the authority of an individual, alone or together with another, to control the disposition of money, funds or other assets held in a financial account by direct communication, written or otherwise, with the financial institution that maintains the account. Ownership is irrelevant to that definition. So is whether the individual has ever exercised the authority.

In a family investment company the mandate is normally given to the directors. Families routinely appoint an adult child, an in-law or a US-citizen sibling to the board for succession or governance reasons, with no shares issued to them at all. The moment that person is on the bank mandate or can instruct the investment manager, they personally have signature or other authority over every account covered by the mandate. If the aggregate maximum value of all the foreign accounts they have a financial interest in or authority over exceeds 10,000 US dollars at any point in the calendar year, they file their own FBAR - listing accounts they do not own, in a company they have no stake in, holding money that is not theirs.

The IRS comparison table at www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements puts the point plainly: for FBAR purposes it is the authority to control the disposition of the assets that triggers reporting, subject to limited exceptions. Those exceptions are narrow and are aimed at officers and employees of certain publicly traded and SEC-registered entities. A private UK family company is not in that category, and no exception rescues its directors.

The practical consequence is that a single family investment company can generate three, four or five separate personal FBARs for the same set of accounts in the same year. The FBAR is not a per-account return or a per-company return. It is a per-person report, and several people can be required to report the same account.

A US-person director with no shares files on signature authority alone
A US-person shareholder above 50 percent files on financial interest, whether or not they are on the mandate
A US-person who is both files once, showing the accounts and the nature of the relationship
A UK-resident family member who is not a US person files nothing, no matter how large their holding
A US-person company secretary or attorney holding a power to instruct the bank can be caught by the same authority test

Does the Family Investment Company Itself Have to File an FBAR?

No - and this is where advisers who are used to US corporate groups go wrong. The FBAR obligation falls on a United States person, and under 31 CFR 1010.350(b) an entity is a United States person only where it is created, organised or formed under the laws of the United States, a State, the District of Columbia, a territory or possession, or an Indian tribe. A company incorporated in England and Wales is none of those things. It therefore has no FBAR obligation of its own, cannot file one, and cannot discharge anybody else's.

Contrast a US entity in the same family. A Delaware LLC or a US corporation holding UK accounts is itself a United States person and files its own FBAR in the entity's name. If your structure has both a US entity and a UK FIC, the US entity's filing obligation is live and separate from the individuals' obligations.

That is also why the consolidated report route usually fails here. The special rules in 31 CFR 1010.350 permit an entity that is a United States person and that owns, directly or indirectly, more than a 50 percent interest in one or more other entities required to report, to file a single consolidated report on behalf of itself and those entities, listing each controlled entity in Part V of the form. Every element of that sentence is a condition, and a UK family investment company fails the first one. The guidance in the Internal Revenue Manual at www.irs.gov/irm/part4/irm_04-026-016 sets out how the consolidated report is assembled and confirms that each controlled entity with its own filing obligation must still be identified in Part V.

The consolidating parent must itself be a United States person entity
It must own more than 50 percent, directly or indirectly, of the entity being consolidated
The entity being consolidated must itself be required to report
Each controlled entity is listed in Part V of the consolidated report
Individuals cannot file consolidated reports, so a US-person shareholder can never merge their filing with the company's

How the 10,000 Dollar Aggregate Test Works Across Company Accounts

The threshold is often misread as a per-account test or a year-end test. It is neither. Filing is required where the aggregate value of all the foreign financial accounts in which the person has a financial interest or over which they have signature or other authority exceeded 10,000 US dollars at any time during the calendar year, as stated on the IRS FBAR page. Every reportable account counts towards the aggregate, including accounts you report only because of signature authority, and including accounts that held nothing at 31 December.

For a FIC shareholder that means the personal accounts and the company accounts go into one pot. A US-person founder with a modest UK current account of their own, who also holds 70 percent of a FIC with a dealing account, aggregates both. It also means the threshold is crossed by a single day's balance. Money that arrived on a Tuesday from a share subscription and was invested on the Friday still sets the maximum value for that account for the whole year.

Because the test sums each account's own maximum, the aggregate can exceed the money the family ever actually held. A transfer of 400,000 pounds from the company's current account into its custody account in March produces a maximum value in both accounts, and both figures go into the aggregate. That double counting is a feature of a threshold test, not an error to correct, and it does not reduce the obligation. Once you are over the line you report every account at its own maximum.

Mapping an Investment Manager's Platform Into the Right Number of FBAR Accounts

This is the part of a FIC engagement that consumes the most time and produces the most errors, and it is the part no competitor guide addresses. A discretionary investment manager does not hand the company one tidy account. It hands it a platform, and a platform has to be decomposed before it can be reported.

The starting principle is that the account is the relationship with the financial institution, not the assets inside it. A custody or dealing account held with a person engaged in the business of buying, selling, holding or trading securities is a securities account and is reported once, at its own maximum value. The individual funds, gilts, equities and investment trusts inside it are not separate foreign financial accounts and are not listed separately. Families who try to list each holding produce reports with dozens of phantom accounts, which is both wrong and, as we note below on penalties, historically dangerous.

Nominee structures do not change the analysis either. UK platforms commonly hold the underlying securities through a nominee company for the benefit of the FIC. The reportable account remains the account the institution maintains for the company; the nominee is the custody mechanism, not a second account.

Currency sub-accounts need care. Where the platform issues a single account number with sterling, dollar and euro sub-designations reported on one statement, we report one account and keep the sub-designations in the working papers. Where the platform issues genuinely distinct account numbers with distinct statements, those are distinct accounts and are reported as such. The test we apply is documentary: what does the institution itself treat as an account, and what does it number?

Maximum value is the other trap. The Internal Revenue Manual describes the maximum value as based on the largest amount shown on any quarterly or more frequent account statement during the year, converted into US dollars using the Treasury rate as of the end of the year. Three consequences follow for a FIC. You do not use the 31 December valuation. You do not use a commercial or bank exchange rate if a Treasury rate is published for that year end. And you do not add together the peak values of individual holdings inside a securities account; you take the peak value of the account.

One securities or custody account equals one reported account, regardless of how many funds sit inside it
Nominee-held underlying securities do not create additional reportable accounts
Separate account numbers with separate statements are separate accounts; sub-designations on one statement generally are not
Maximum value comes from the highest quarterly or more frequent statement figure, not the year-end balance
Convert at the Treasury year-end rate for the year being reported, and record which rate you used
Keep the statements: records supporting each account must be retained for five years, and must show the account name, number, institution name and address, account type and maximum value

One further rule helps large structures. Where a person has a financial interest in or signature authority over 25 or more foreign financial accounts, the Internal Revenue Manual confirms that the report can give the number of accounts and certain basic information rather than full detail for each. That relief is presentational only. The filer still has to hold the complete account records and produce them on request from the IRS or FinCEN, so the reconciliation work does not disappear - it just moves out of the form and into the file.

Where Form 8938 Fits, and Where It Does Not

Form 8938 runs on a different logic, and mixing the two is the second most common error we correct after simply not filing at all. For FBAR, a greater than 50 percent shareholding looks through the company to its accounts. For Form 8938, there is no look-through. The IRS guidance at www.irs.gov/businesses/corporations/basic-questions-and-answers-on-form-8938 confirms that stock or securities issued by a foreign corporation and held outside a financial account is itself a specified foreign financial asset, and that where an asset is held through a foreign entity it is the interest in the entity that is reported.

So the shares in the family investment company are the reportable asset on Form 8938, valued as an interest in the entity. The company's bank and custody accounts are not separately reported by the shareholder on that form. It is very nearly the mirror image of the FBAR treatment, and a taxpayer who reasons from one to the other will get both wrong.

Two more differences matter for FIC directors and shareholders. Signature authority alone is not reportable on Form 8938 at all, so the director with no shares may have an FBAR obligation and no Form 8938 obligation whatsoever. And the thresholds are far higher: for a taxpayer living abroad the comparison page at www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements gives more than 200,000 US dollars at year end or 300,000 US dollars at any time during the year for an unmarried filer, and more than 400,000 US dollars at year end or 600,000 US dollars at any time for a married couple filing jointly. The same page states explicitly that filing one form does not relieve you of the obligation to file the other.

A Worked Scenario: Three Missed Years on a UK Family Investment Company

The following is an illustration built to show the mechanics. The figures are chosen for clarity and are not taken from a client file.

Assume a US citizen resident in London, married to a UK national, who incorporated an English company in 2021 to hold the proceeds of a business sale. He holds 60 percent of the voting shares. His UK-resident brother holds 40 percent. His US-citizen sister, who lives in Edinburgh, was appointed a director at incorporation and is on the bank mandate, but holds no shares. The company runs a sterling current account, a sterling cash account with its investment manager, and a discretionary custody account holding around forty funds and equities through the manager's nominee.

Assume peak balances during the year of 45,000 pounds on the current account, 120,000 pounds on the cash account and 2.4 million pounds on the custody account. At any plausible exchange rate, the aggregate is far above 10,000 US dollars, so the threshold is not in doubt and precision is needed only on the individual maximum values.

The reporting map falls out as follows. The brother is not a US person and files nothing. The founder crosses the more than 50 percent voting test, so he has a financial interest in all three company accounts and reports them on his own FBAR alongside his personal UK accounts. The sister has no financial interest at all, but she has signature or other authority over all three, so she files her own FBAR reporting the same three accounts. Three accounts are reported, not forty-three: the custody account is one securities account, and the funds inside it are not separate accounts.

If the founder's Forms 1040 for those years were complete and correct, and his sister's were too, the gap is reports only and the late Forms 114 are submitted through the BSA E-Filing System with the reason for late filing recorded. If, as is more usual, the company's distributions or the founder's share of investment income were also mishandled on the returns, the Streamlined Foreign Offshore Procedures are the route, and they carry the returns and the reports together.

What Else Comes With More Than 50 Percent of a UK Company?

An FBAR gap on a family investment company is rarely the only gap, because the same ownership percentage that pulls the accounts onto your FBAR pulls the company itself onto your income tax return. The IRS page at www.irs.gov/forms-pubs/about-form-5471 confirms that certain US citizens and residents who are officers, directors or shareholders in certain foreign corporations file Form 5471 to satisfy the reporting requirements of Internal Revenue Code sections 6038 and 6046.

For a FIC held above 50 percent by US persons, that normally means an annual Form 5471 with financial statements for the company, and it opens the questions that follow from controlled foreign corporation status - how the company's investment income is treated in the US in the year it arises rather than the year it is distributed, and how UK corporation tax paid by the company interacts with the US result. Fund holdings inside the company raise separate passive foreign investment company questions. None of that is decided by the FBAR analysis, but all of it is discovered by it, and a remediation plan that fixes the reports and leaves the income tax position untouched is only half a plan.

How Do You Fix Missed FBARs on Family Investment Company Accounts?

There are two working routes, and the choice between them is determined by the state of the income tax returns, not by how many years or accounts were missed.

Route one applies where the returns were right and only the reports were missed. The late Forms 114 are filed electronically through FinCEN's BSA E-Filing System at bsaefiling.fincen.treas.gov, one report per person per calendar year, with the reason for filing late recorded on each report. The IRS FBAR page advises filing late reports as soon as possible where the IRS has not contacted you about a delinquent report and you are not under civil examination or criminal investigation, and to follow the instructions for explaining the reason for the delay. A word of caution for anyone working from older guidance or an older adviser memo: the IRS withdrew its separate delinquent FBAR submission procedures page in mid-2026. There is no longer a live IRS route of that name to cite, and any submission letter or engagement memo that names it should be rewritten. The mechanism itself - a late report with a stated reason - is unchanged.

Route two applies where the returns were also wrong, which is the usual position when a family investment company has been missed, because the company's income has often been mishandled too. The Streamlined Foreign Offshore Procedures require that you had no US abode and were physically outside the United States for at least 330 full days in one of the three most recent years for which the return due date has passed, and that the failures were non-willful - due to negligence, inadvertence or mistake, or a good faith misunderstanding of the law. The submission is three years of returns, six years of FBARs, and a signed Form 14653 certification.

Returns are marked Streamlined Foreign Offshore in red at the top of the first page
Three years of delinquent or amended returns, with all required information returns, including any Form 5471 for the company
Six years of delinquent FBARs, filed through the BSA E-Filing System
In the BSA system, select Other as the reason for late filing and enter Streamlined Filing Compliance Procedures in the explanation box
Form 14653 must be signed and must explain, in the taxpayer's own account of the facts, why the failures were non-willful
Each person with their own filing obligation makes their own submission; the director with signature authority is not covered by the shareholder's

The certification narrative is the part families underestimate. For a FIC the story has to explain the company: why it was formed, who advised on it, what the US-person director or shareholder was told about US reporting, and when they found out. A narrative that says only that the taxpayer did not know about the FBAR is weaker than one that traces the actual sequence of advice, incorporation and discovery.

Penalties, and What Bittner Changed

The IRS comparison page describes FBAR civil penalties as up to 10,000 US dollars for a non-willful violation and, for a willful violation, up to the greater of 100,000 US dollars or 50 percent of the balance in the account at the time of the violation, with the statutory maximums adjusted annually for inflation. The inflation adjustment matters when older years are in scope, because the figure applied is the adjusted one for the relevant period rather than the round number in the statute.

The structural point for family investment companies came from the Supreme Court in Bittner v. United States, No. 21-1195, decided on 28 February 2023, which held that the non-willful FBAR penalty accrues per report rather than per account. Before that decision a filer with a dozen company accounts and six missed years faced an exposure calculated across seventy-two accounts. After it, the non-willful calculation runs on the reports. For a FIC, where a single person can be reporting a long list of company accounts, that is the difference between a manageable exposure and a ruinous one - which is also why accurate account mapping, rather than defensive over-listing of every fund in a custody account, is the right approach.

The UK Side: What a FIC Files in Britain, and Why It Does Not Help

Nothing filed in the UK discharges an FBAR. The family investment company files annual accounts and a confirmation statement at Companies House, and a Company Tax Return with HMRC. Its shareholders report dividends on their Self Assessment returns. None of that reaches FinCEN, and none of it is a substitute for FinCEN Form 114.

The UK filings are, however, the best evidence base for a US remediation. Statutory accounts give you the company's investment income and the movement in its cash and investment balances year by year, which is exactly the reconciliation the US side needs. The company's own corporation tax position is worth understanding at the same time: HMRC's guidance at www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm60705 explains that close companies are treated as close investment-holding companies unless they exist wholly or mainly for a qualifying purpose such as commercial trading, and that a close investment-holding company is not entitled to the small profits rate of corporation tax. Most family investment companies sit in that category, and the UK tax the company actually paid is a figure the US analysis will need.

One more UK feature is worth naming because it changes the risk calculus. UK company ownership and control are on public record. The register of people with significant control at Companies House, and the annual accounts, make the family's controlling interests visible to anyone who looks. A structure that is public in Britain and unreported in Washington is not a quiet position, and the arrival of a FATCA match or an HMRC enquiry tends to be the moment families discover it.

Records to Assemble Before You File Anything

The reconstruction, not the form, is the job. In the remediation files we prepare for family investment companies, the first fortnight is spent on documents, and the FBARs take an afternoon once those documents exist.

The certificate of incorporation, articles and every share allotment, transfer and reorganisation since formation
Register of members and register of directors, with the dates each director was appointed and resigned
Every bank and investment manager mandate, showing who could instruct the institution and from when
Statements at quarterly or better frequency for every company account for every year in scope
A schedule of account numbers showing which are distinct accounts and which are sub-designations of one account
Statutory accounts and Company Tax Returns for each year, and the UK corporation tax actually paid
The Treasury year-end exchange rate used for each year, recorded in the working papers
Any correspondence with advisers about the company's formation and about US reporting, which feeds the non-willfulness narrative

A last sequencing note. Determine every person with an obligation before you file for anyone. The shareholder above 50 percent, the director on the mandate, an adult child given signing rights when they turned 21, a US-person spouse added to a currency account - each files separately, and filing the obvious person first while another family member sits unfiled leaves the structure half-corrected. In the engagements that go wrong, it is almost never the shareholder who was overlooked. It is the director who never owned a thing.