Missed FBAR: Director of a UK Flat Management Company

A missed FBAR is one of the most common gaps we find when a US citizen who owns a leasehold flat in a UK block has agreed to serve as a volunteer director of the residents' management company or right-to-manage company. The short answer is this: if you can sign on the company's UK bank accounts, alone or together with another director, you have signature authority over a foreign financial account, and that account counts toward your FinCEN Form 114 (FBAR) filing obligation even though not a penny of the money belongs to you. If the combined maximum values of every foreign account you own or can sign on exceeded $10,000 at any point in the year, an FBAR was due.

The good news is that a missed FBAR arising from a flat company directorship is usually straightforward to correct. The account is not yours, it rarely generates any US income for you, and the facts are well documented by the bank's mandate paperwork and Companies House. This guide explains why the rule catches volunteer directors, how the account is reported, where Form 8938 and Form 5471 fit, and how to catch up on missed years without drawing unnecessary attention.

Why does a flat management company directorship create an FBAR obligation?

The FBAR rule is written in terms of relationships with accounts, not ownership of money. Under 31 CFR 1010.350(a), each United States person having a financial interest in, or signature or other authority over, a financial account in a foreign country must report that relationship for each year in which it exists. The full regulation is published at https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-C/section-1010.350 and the IRS summary of who must file is at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar.

Signature authority is the authority of an individual, alone or in conjunction with another individual, to control the disposition of money, funds or other assets held in a financial account by direct communication, whether in writing or otherwise, to the bank that maintains the account. That is the definition in 31 CFR 1010.350(f)(1), repeated in FinCEN's FBAR filing instructions at https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf. The IRS Internal Revenue Manual at https://www.irs.gov/irm/part4/irm_04-026-016 frames the practical test as whether the foreign financial institution will act on the individual's direct communication.

A UK residents' management company (RMC) or right-to-manage (RTM) company typically holds at least one current account for day-to-day service-charge receipts and payments, and often a separate reserve or sinking fund account built up over years for roof replacements, lift works and external redecoration. The directors are almost always leaseholders in the block, serving unpaid. When a US citizen joins the board, the managing agent or the bank will usually add them to the account mandate as an authorised signatory. From that moment, the US person has signature authority over a UK account, and in a well-run London mansion block the reserve fund alone can comfortably exceed the FBAR threshold.

• Residents' management company (RMC): a company, usually owned by the leaseholders, that is responsible under the leases for managing the building.
• Right-to-manage (RTM) company: a company formed by qualifying leaseholders to take over management functions from the landlord. GOV.UK explains that the Right to Manage lets leaseholders take over certain management responsibilities from the landlord without having to prove bad management, at https://www.gov.uk/leasehold-property/right-to-manage-and-management-disputes.
• Share of freehold company: a company that owns the freehold of the building, in which each leaseholder typically holds one share or membership interest.
• In each case, if the company banks in the UK and you are on the mandate, the account is a foreign financial account over which you have signature authority.

Does a two-signatory bank mandate still count as signature authority?

Yes. This is the point we are asked about most often, and it is the gap most general FBAR guides skip. Many flat companies adopt a dual-signature mandate so that any payment above a set amount needs two of the directors to approve it. Directors often assume that because they cannot move money on their own, they do not have signature authority. The regulation answers this directly: the words alone or in conjunction with another mean that shared authority is still authority. If the bank will act on an instruction signed by you and one other director, you have signature authority for FBAR purposes.

The analysis is different where a director has no authority to instruct the bank at all. If the only person who can instruct the bank is the managing agent, and the directors merely approve budgets at board meetings without ever being on the mandate, the directors generally do not have signature authority over that account, because the bank would not act on their direct communication. Online banking access is a common trap here. View-only access does not by itself confer authority to dispose of funds, but an online banking profile that lets you approve payments, alone or as a second approver, usually does. In the returns we prepare, we ask for the bank's mandate letter or the list of authorised signatories before we decide, rather than relying on memory.

Is there any exception for volunteer directors of a private UK company?

No exception fits this situation. The FinCEN instructions list the signature-authority exceptions, and they are narrow: officers and employees of US-regulated banks, of financial institutions registered with and examined by the SEC or CFTC, of certain service providers to registered investment companies, of entities with equity securities listed on a US national securities exchange or registered under section 12(g) of the Securities Exchange Act, and of certain US subsidiaries of listed parents. A private UK flat management company falls into none of these categories. There is no exception for unpaid, volunteer or community roles, and no exception because the money is held for other leaseholders.

Do you have a financial interest in the company's accounts as a shareholder?

Usually not, and the distinction matters for how the account is reported. Under 31 CFR 1010.350(e)(2)(ii), a US person has a financial interest in an account owned by a corporation in which they own, directly or indirectly, more than 50 percent of the voting power or the total value of the shares. In a block of eight or twelve flats where each leaseholder holds one share, a single US owner is a minority member and has no financial interest in the company's accounts for FBAR purposes. They report the accounts as signature-authority-only accounts.

Small conversions are where care is needed. In a house split into two flats with a share of freehold company owned 50/50, exactly 50 percent is not more than 50 percent, so the test is not met on those numbers alone. But if the US person, or the US person together with holdings attributed to them indirectly, controls more than half of the votes or value, the company's accounts become financial-interest accounts. Many RTM companies and some RMCs are companies limited by guarantee with members rather than shareholders; in those cases we look at the constitution and voting rights before concluding. Where the facts are close, the conservative filing position is usually the right one.

How is the $10,000 FBAR threshold calculated when you sign on the block's accounts?

The threshold is aggregate, not per account. FinCEN's instructions state that an FBAR must be filed if the maximum account value of a single account, or the aggregate of the maximum account values of multiple accounts, exceeds $10,000. You add together the highest balance during the calendar year of every foreign account in which you have a financial interest and every foreign account over which you have signature authority. The flat company's accounts therefore combine with your own UK current account, savings accounts, ISAs held in cash or investments, and any other foreign accounts you hold.

• Maximum value: a reasonable approximation of the greatest value in the account during the calendar year. Periodic statements can be relied on if they fairly reflect the maximum.
• Currency conversion: convert the sterling maximum to US dollars using the Treasury reporting rate for the last day of the calendar year, published at https://fiscaldata.treasury.gov/datasets/treasury-reporting-rates-exchange/treasury-reporting-rates-of-exchange.
• Rounding: record amounts in whole US dollars, rounded up to the next dollar.
• Full value: you report the whole balance of the company's account, not a per-flat share of it.
• Negative values: if a calculation produces a negative figure, enter zero rather than a negative number.

Because the reserve fund of a mature block can run to six figures in sterling, a US director who has only modest personal UK savings can cross the threshold solely through the company's accounts. That is exactly how many of the missed FBAR cases we see begin: the individual correctly concluded that their own accounts were below $10,000 and never considered the building's money.

How do you report the flat company's account on FinCEN Form 114?

FBARs are filed electronically through FinCEN's BSA E-Filing System at https://bsaefiling.fincen.treas.gov, separately from your Form 1040. Accounts over which you have signature authority but no financial interest go in Part IV of the form. For each such account you enter the account details and maximum value, as for your own accounts, and then the name, taxpayer identification number and mailing address of the account owner, which here is the flat management company itself, not the managing agent and not the other leaseholders. Item 43 asks for your title with the owner, which for most readers will simply be Director.

• Collect the bank's name and address, the account numbers and the account type for each company account on which you are a signatory.
• Obtain the highest balance during the year from bank statements or the managing agent's year-end service-charge accounts and bank reconciliations.
• Record the company's registered name and address as shown at Companies House, and its UK company number as the identifying number where the form asks for one.
• Report your own UK accounts in Part II and any jointly owned personal accounts in Part III, so the whole picture sits on one FBAR for the year.
• Keep a copy of the filed FBAR together with the mandate letter and statements supporting the maximum values.

The FinCEN instructions contain a shortened reporting option in Part IV for a US person living abroad who has signature authority over accounts owned by their employer. A volunteer director of a flat company is not in an employment relationship with it, so in our practice we complete the full account-level reporting rather than relying on that option. The extra effort is small, and it removes any argument that the filing was incomplete.

What does resigning as a director mean for FBAR reporting?

FBAR reporting follows the calendar year, and the obligation exists for each year in which the relationship existed. If you resign as a director part way through the year, you still report the company's accounts for that final year, using the maximum values reached during the year, because you held signature authority for part of it. You stop reporting from the first full calendar year in which you had no authority at any time.

The date that matters is the date your authority over the account ended, which is not always the date you resigned from the board. Companies House must be told when a director leaves, as GOV.UK explains at https://www.gov.uk/file-changes-to-a-company-with-companies-house, but the bank is a separate matter. If the managing agent forgot to update the mandate, the bank may still have held you out as an authorised signatory for months after your resignation. Because the test is whether the bank would act on your instruction, we look for the bank's written confirmation that your name was removed. Where that confirmation is dated in January of the following year, a further year of reporting may be needed.

Which documents prove when your signature authority started and ended?

Establishing dates cleanly is what makes a missed FBAR remediation quick rather than painful. The documents we ask for are usually already held by the managing agent or the company secretary.

• Bank mandate letters or change-of-signatory forms, showing the date you were added to and removed from each account.
• Board minutes recording your appointment, your resignation and any resolution changing the bank mandate.
• The Companies House filing history for the company, showing the appointment and termination dates recorded on the public register.
• Year-end service-charge accounts and bank statements showing the balances needed for maximum value.
• Online banking user lists, if the bank or agent can produce them, showing whether your access was view-only or included payment approval.

Does Form 8938 also apply to signature authority over the block's accounts?

Generally not. Form 8938, the FATCA Statement of Specified Foreign Financial Assets, is filed with your tax return and covers assets in which you have an interest. The IRS comparison chart at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements states that accounts over which you have signature authority are not reported on Form 8938 unless you otherwise have an interest in the account, whereas for the FBAR the answer is yes, subject to exceptions. A minority director of a flat company therefore normally reports the company accounts on the FBAR only. Your own UK accounts and investments may still need Form 8938 if you exceed the thresholds that apply to you; for taxpayers living abroad, the chart shows thresholds of more than $200,000 at year end or more than $300,000 at any time for single filers, and double those figures for joint filers.

Do not overlook Schedule B of Form 1040. Part III asks whether you had a financial interest in or signature authority over a foreign account. A director who answered no in a year when they were on the block's mandate has an inconsistency on the income tax return that should be corrected when the missed FBAR is filed.

Could owning a share of the freehold company trigger Form 5471?

Sometimes, and it deserves a careful look rather than an automatic answer. Form 5471 is the information return for certain US persons connected with foreign corporations, and the instructions at https://www.irs.gov/instructions/i5471 define several filer categories. A Category 3 filer includes a US person who acquires stock in a foreign corporation that, together with stock already owned, meets the 10 percent stock ownership requirement by vote or value. A Category 4 filer is a US person who controls a foreign corporation, meaning more than 50 percent of vote or value. A Category 2 filer is a US citizen or resident who is an officer or director of a foreign corporation in which a US person has acquired stock meeting the 10 percent requirement, or an additional 10 percent or more.

In a large mansion block where each of dozens of leaseholders holds one share, a single US leaseholder will typically be well under 10 percent. In a small block of five or six flats, one share can easily be 10 percent or more, so the year a US person buys a flat and acquires the share can bring the purchaser, and potentially a US director of the company, within Form 5471. Where the company is limited by guarantee and has no share capital, the stock-based tests work differently and need to be applied to the company's actual constitution. Form 5471 penalties operate separately from FBAR penalties, so if the ownership numbers are anywhere near 10 percent, we review this alongside the FBAR catch-up rather than after it.

How do you fix a Missed FBAR for a flat management company directorship?

The right route depends on one question: is the only problem the missing FBARs, or is there also unreported income or missing information returns on your US tax returns? For most volunteer directors, the company's accounts produce no income for them personally, so the FBAR omission often stands alone.

• FBAR-only omission, all income reported: file the missing FBARs through the BSA E-Filing System. The form lets you mark the report as late filed and select a reason from a drop-down list, or choose other and write a short explanation. A clear explanation that you did not realise signature authority over the building's accounts was reportable, supported by dates, is the normal approach.
• FBARs missing and income or information returns also missing: the Streamlined Filing Compliance Procedures at https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures are usually the better fit, provided the failures were non-willful.
• Living outside the United States: the Streamlined Foreign Offshore Procedures at https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states require that you had no US abode and were physically outside the United States for at least 330 full days in any one of the three most recent tax years. You file three years of returns, six years of FBARs and a signed Form 14653 certification, and eligible taxpayers are not subject to the failure-to-file, accuracy-related, information return or FBAR penalties.
• Living in the United States: the Streamlined Domestic Offshore Procedures carry a 5 percent miscellaneous offshore penalty and have their own eligibility conditions.

One point on terminology. For many years the IRS published a separate set of Delinquent FBAR Submission Procedures, and older articles still describe it as a live programme. The IRS withdrew that page around 1 July 2026. Today, late FBARs are filed through the BSA E-Filing System with a reason for late filing, or as part of the Streamlined procedures where those fit. If you are already under IRS examination or have been contacted about your FBARs, speak to a practitioner before filing anything.

What penalties apply to a missed FBAR after Bittner?

In Bittner v. United States, decided in 2023, the Supreme Court held that the civil penalty for a non-willful FBAR violation applies per report, not per account. The opinion is at https://www.supremecourt.gov/opinions/22pdf/21-1195_h3ci.pdf. For a director who failed to include three company accounts and two personal accounts on one year's FBAR, that means at most one non-willful penalty for that year, not five. The statutory non-willful maximum is $10,000 per violation, adjusted annually for inflation under 31 CFR 1010.821, and the FinCEN instructions confirm that no penalty will be imposed where there is reasonable cause for the failure and the balance in the account is properly reported.

Willful violations are a different category entirely, with penalties that can reach the greater of a statutory dollar amount or 50 percent of the balance at the time of the violation, and possible criminal exposure. In our experience, a volunteer director who never knew that signing cheques for the building's roof fund was reportable presents one of the clearest non-willful fact patterns there is. Filing promptly once you know is what preserves that position.

Worked scenario: a US director of a London mansion block RMC

The following figures are illustrative only and use an assumed exchange rate of 1.30 US dollars to the pound for simplicity; a real filing uses the Treasury reporting rate for the last day of each year.

Claire is a US citizen who has lived in London since 2018 and owns a flat in a 24-flat mansion block. She holds one of 24 shares in the residents' management company, about 4.2 percent. She joined the board in 2021 and was added to the bank mandate for two accounts: a service-charge current account with a highest annual balance of around 45,000 pounds, and a reserve fund account with a highest balance of around 210,000 pounds. The mandate requires two directors to authorise any payment. Her own UK current account peaks at around 6,000 pounds a year. She files her US returns each year, reports her salary, and claims foreign tax credits, but has never filed an FBAR because her own account was always below the threshold.

• Signature authority: yes. The dual-signature mandate is authority in conjunction with another, so both company accounts count.
• Financial interest: no. At about 4.2 percent she is far below the more-than-50-percent test, so the accounts go in Part IV.
• Threshold: illustratively, 6,000 plus 45,000 plus 210,000 pounds is 261,000 pounds, or about 339,300 dollars at the assumed rate, well over 10,000 dollars. Even her personal account alone would not have triggered filing, which is why she missed it.
• Form 8938: the company accounts are signature-only, so they are not included. Her own assets are well below the thresholds for taxpayers living abroad.
• Form 5471: one share in 24 is below 10 percent, and no single US person holds 10 percent, so no category is triggered on these facts.
• Resignation: Claire resigned from the board in March 2025. Her 2025 FBAR must still include both company accounts, and as the due date with the automatic extension is 15 October 2026, it can still be filed on time.
• Remediation: her income was fully reported, so she files the 2021 to 2024 FBARs late through BSA E-Filing, selecting a late-filing reason and explaining that she did not know signature authority over the building's accounts was reportable, and files her 2025 FBAR on time. She corrects the Schedule B answer on the affected returns with her preparer.

Had Claire also failed to report UK interest or other income, the analysis would have pointed toward the Streamlined Foreign Offshore Procedures instead, given that she has lived outside the United States throughout.

What should a US director of a UK flat company do next?

Start by confirming, in writing, which of the company's accounts you can instruct and from what dates. Ask the managing agent for the mandate letters and the year-end balances, pull the Companies House filing history, and list every year in which you were a signatory. Then decide whether the problem is FBAR-only or broader. Where the problem is FBAR-only, late filing through BSA E-Filing with a clear reason is usually proportionate. Where returns or other information forms are also missing, Streamlined is usually the safer structure.

Finally, build the reporting into your annual routine. Ask the managing agent each January for the highest balances on the company's accounts in the previous calendar year, and keep that email with your tax papers. It is a small administrative step that stops a missed FBAR happening again and gives you a clean record if you are ever asked about it. Our team handles FBAR catch-up filings, Streamlined submissions and the related US returns for US citizens living in the UK and holding UK property, and we are happy to review your mandate paperwork before you file.

Related reading and tools

• US Tax Services & IRS Compliance
• UK Tax Services
• IRS Streamlined Filing
• UK Income Tax Calculator
• US Federal Income Tax Calculator

Every situation is different. Book a cross-border tax consultation to discuss how these rules apply to you.

Authoritative sources

IRS — Streamlined Filing Compliance Procedures

FinCEN — Report of Foreign Bank and Financial Accounts (FBAR)

HM Revenue & Customs

GOV.UK — Tax on foreign income

IRS — Foreign Earned Income Exclusion

IRS — Foreign Tax Credit

ICAEW

Chartered Institute of Taxation (CIOT)

AICPA

MoneyHelper (UK)