Do I need to report a UK account that has been dormant for years on my FBAR?

Yes. The FBAR test looks at whether you had a financial interest in a foreign financial account and whether your accounts together exceeded $10,000 at any time in the year. Activity is irrelevant. A dormant UK savings, current or building society account is reportable for every year it was open, and it counts toward the aggregate even if nothing happened in it.

Can a small forgotten account make my other UK accounts reportable?

Yes. The $10,000 threshold is an aggregate across all foreign accounts. If your main UK accounts peaked just below $10,000 in a year and a forgotten account pushed the total over, an FBAR was required for that year and it must list every account, not only the forgotten one. Each year the dormant account existed should be re-tested.

What happens to a UK account under the Dormant Assets Scheme?

GOV.UK explains that bank and building society accounts with no customer transactions for 15 years, where the firm cannot trace the owner, may be transferred by participating firms to a reclaim fund. Participation is voluntary, and owners keep the right to reclaim what they would have been owed at any time, usually by contacting the original firm.

How do I report a dormant account after its balance moved to the reclaim fund?

Years before the transfer are ordinary reportable years. For years after it, we are not aware of FinCEN or IRS guidance on whether the reclaim right is a reportable account, so the position is uncertain. A conservative, documented approach is to confirm the transfer date in writing and generally disclose where the balance is material to the aggregate test.

How do I catch up on a missed FBAR for a dormant account after July 2026?

The IRS withdrew its Delinquent FBAR Submission Procedures page around 1 July 2026. The remaining routes are a late FBAR filed through FinCEN's BSA E-Filing System with a reason for late filing, or the Streamlined Foreign Offshore Procedures, which require three years of returns, six years of FBARs and a non-willful certification on Form 14653.

Missed FBAR: Dormant UK Accounts You Forgot Existed

Q: Is interest on a forgotten UK account taxable in the UK and the US?

It can be taxable in both. The US taxes citizens on worldwide interest in the year it is credited, even if never withdrawn. In the UK, HMRC adds together interest from all savings accounts, and tax is due if total savings income exceeds your allowances. Foreign tax credits may reduce double tax on the US return.

A missed FBAR on a dormant UK account is still a missed FBAR: a forgotten student current account, childhood savings account or old building society passbook is a reportable foreign financial account for every calendar year it exists, whether or not a single transaction went through it. It also counts toward the $10,000 aggregate test, which means a small forgotten balance can make every one of your UK accounts reportable for years you thought were clean. The fix is usually straightforward: trace the account, rebuild its annual maximum values, and file the missing reports through a non-willful catch-up route.

In the returns we prepare for US citizens and dual nationals living in the UK, dormant accounts are one of the most common discoveries when a new client first builds a complete account inventory. They are rarely large. They are almost always genuinely forgotten. And because they sit quietly outside the main banking relationship, they are exactly the accounts that never make it onto the FinCEN Form 114. This guide explains how the rules apply to dormant accounts, how the UK Dormant Assets Scheme complicates the picture, and how to put the history right after the IRS withdrew its Delinquent FBAR Submission Procedures page around 1 July 2026.

Does a dormant UK account still need to be reported on an FBAR?

Yes. The FBAR test is about ownership and value, not activity. FinCEN states that a United States person with a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of those accounts exceeds $10,000 at any time during the calendar year, as set out at https://www.fincen.gov/report-foreign-bank-and-financial-accounts. The underlying regulation, 31 CFR 1010.350, defines reportable accounts by type (bank accounts, securities accounts and other financial accounts), and nothing in that definition excludes an account because it has been inactive. An account that received no deposits and no withdrawals for a decade is still an account held at a foreign financial institution.

The IRS page at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar confirms the same aggregate test and the filing calendar: the FBAR is due on 15 April following the calendar year, with an automatic extension to 15 October that does not need to be requested. A dormant account that was open on any day of a year is part of that year's report, provided the aggregate threshold is crossed.

A dormant account, for FBAR purposes, is simply an open account with no customer-initiated activity. It is not a separate category with its own rules. The typical examples we see among UK-based US persons are:

A student current account opened at university and abandoned when the owner moved to a private bank or a premium account.
A childhood or junior savings account opened in the child's name, still open decades later with a small balance and years of accrued interest.
An instant-access or notice savings account opened for a promotional rate and never closed after the rate dropped.
An old building society share account or passbook account, often from before a demutualisation or merger that changed the institution's name.
A share-dealing or execution-only brokerage account holding a handful of shares or a small cash residue from an old employee purchase or a flotation.
A cash ISA or stocks and shares ISA opened once and left untouched, which is still a UK financial account for US reporting purposes.

Missed FBAR trap: how a forgotten account changes the $10,000 test for other years

This is the point most guides skip, and it is the one that matters most. The $10,000 threshold is an aggregate test across all foreign accounts. A US person whose main UK accounts peaked at, say, $9,000 in a given year had no FBAR obligation for that year. But if a forgotten building society account with $1,500 in it was also open that year, the aggregate was over $10,000 and every account, including the main ones, was reportable. The forgotten account does not just add one line to the report. It can create the entire filing obligation for a year that previously looked clear.

For high-net-worth readers today, the current years are rarely in doubt; balances are well above the threshold. The exposure sits in the earlier years: university years, the first years of a career in London, a period of living on a US salary with only a small UK float. Those are exactly the years in which dormant student and childhood accounts were still open and in which the aggregate often hovered around the threshold. When we rebuild an account history, we therefore re-run the aggregate test for every year in the look-back period after the forgotten accounts are added back in, rather than simply adding the dormant account to years already filed.

Illustrative scenario: a forgotten account that tips the aggregate

The following is an illustration only; the balances and exchange rate are assumptions, not client data or official figures. Assume a US citizen, now a partner at a London firm, reviews a year early in her career. Her main current account peaked at £5,800 and her easy-access savings account peaked at £1,300 during the year. Using an assumed year-end Treasury rate of 1.30 dollars per pound, the two accounts total £7,100, or about $9,230. On that basis she concluded that no FBAR was required for that year and filed nothing.

During an account sweep she discovers a building society account opened for her as a teenager. It had no transactions for years, but its balance was £700 plus a small amount of interest. Adding that account, the aggregate maximum value becomes about £7,800, or roughly $10,140 at the assumed rate. The aggregate now exceeds $10,000, so an FBAR was required for that year, and it must list all three accounts, not just the forgotten one. The same exercise must be repeated for each year the building society account existed. Some years will flip from no obligation to a filing obligation; other years, already filed, will need an amended FBAR to add the missing account.

The practical lesson is that the materiality of the dormant account is not measured by its own balance. A £700 account is trivial in isolation, but it can be the difference between compliance and a missed FBAR on several accounts across several years.

How do you value a dormant account for the FBAR?

FinCEN's FBAR line item filing instructions define the maximum value of an account as a reasonable approximation of the greatest value of currency or non-monetary assets in the account during the calendar year. Periodic statements may be relied on if they fairly reflect the maximum value. Each account is valued separately, the maximum value is converted to US dollars using the Treasury Reporting Rates of Exchange for the last day of the calendar year, and the result is rounded up to the next whole dollar. The instructions are linked from https://www.fincen.gov/report-foreign-bank-and-financial-accounts.

For a genuinely dormant cash account, the maximum value is usually easy to establish once statements are recovered: with no withdrawals, the balance only grows by credited interest, so the highest value is normally the closing balance for the year, or the balance immediately after the final interest credit. For a dormant share-dealing account the position is different, because the value of the holdings moves with the market even if the account is untouched. The maximum value is the highest market value during the year, not the year-end value, and a year-end valuation can understate it.

Where the value genuinely cannot be determined, the instructions include an amount-unknown box (item 15a) for the account. In our experience that box should be a last resort after the institution has been asked for historic balances, because a reasonable, documented approximation is far stronger than a blank value on a catch-up filing.

What is the UK Dormant Assets Scheme and how does it affect FBAR reporting?

The Dormant Assets Scheme is an industry-led, government-backed scheme under which participating banks, building societies and other financial firms can transfer dormant balances to a reclaim fund after they have been unable to reunite the money with its owner. The government's overview at https://www.gov.uk/government/publications/the-dormant-accounts-scheme explains that the scheme depends on voluntary participation by the financial services industry and that owners are able to reclaim what they would have been owed had the asset not been transferred, at any time.

For bank and building society accounts, the government's consultation response at https://www.gov.uk/government/publications/the-dormant-accounts-scheme/government-response-to-the-consultation-on-expanding-the-dormant-assets-scheme confirms that an account becomes dormant for these purposes when no transactions have been carried out by, or on the instructions of, the holder for 15 years, and the bank or building society has been unable to trace the owner. Two consequences follow for a US person.

Every year before any transfer, the account sat at the UK bank or building society in the ordinary way. For those years it is a foreign financial account, and there is no uncertainty about whether it belongs in the aggregate test.
Because participation is voluntary and firms decide what to transfer, you cannot assume a 15-year-old account has been transferred. Many old accounts are still held by the original institution, and the only way to know is to ask it.

Reporting years before and after a reclaim fund transfer

The harder question is the period after a balance has been transferred to the reclaim fund. At that point the owner's account at the bank may have been closed or reduced to nil, and the owner holds a right to reclaim the money through the original firm. We are not aware of any FinCEN or IRS guidance that specifically addresses whether that reclaim right is itself a foreign financial account for FBAR purposes, and we will not invent a rule. It is genuinely uncertain.

The approach we take in the returns we prepare is conservative and documented. First, we establish the transfer date in writing from the institution, so that there is a clear line between years in which the account plainly existed and years after the transfer. Second, for the years up to and including the year of transfer, the account is reported at its maximum value in the ordinary way. Third, for years after the transfer, we treat the question as a judgement call to be made with the client on full facts, and where the balance is material to the aggregate test, disclosure is generally the lower-risk choice: an FBAR that includes an item that arguably did not need to be there carries little downside, while an omission that later proves reportable does. Finally, once the money is reclaimed, it is usually paid back into a live account, and from that point the reporting position is ordinary again.

Is the interest on a dormant UK account taxable in the US?

Yes. US citizens are taxed on worldwide income, and interest credited to a UK account is income in the year it is credited, whether or not it is ever withdrawn. Years of small interest credits on a forgotten account are therefore years of unreported interest on the US return, even if the amounts are modest. The US return also asks, in Schedule B, whether you had a financial interest in or signature authority over a foreign account, so a return that answered no in a year the dormant account existed contains an incorrect answer as well as missing income.

In practice, for most HNW clients the unreported interest on a dormant savings account is small relative to their overall position, and foreign tax credits for any UK tax paid on the same interest may reduce or eliminate the additional US tax. But the income still needs to be picked up, and on a streamlined submission it must be included in the amended returns for the covered years.

Is the interest taxable in the UK too?

It can be. GOV.UK explains at https://www.gov.uk/apply-tax-free-interest-on-savings that most people can earn some savings interest without paying tax on it, that whether tax is due depends on the interest earned, other taxable income and available allowances, and that HMRC adds together interest from all savings accounts. It also notes that banks and building societies tell HMRC about interest paid after 5 April each year. For higher earners, savings allowances are smaller, so interest on a forgotten account is more likely to be taxable once it is added to interest on active accounts. A UK resident whose savings income exceeds the tax-free allowances may need to report it through Self Assessment, and a forgotten account can therefore create a UK correction as well as a US one.

Does the forgotten account also belong on Form 8938?

Possibly. Form 8938 is a separate IRS information return with much higher thresholds for taxpayers living abroad. The IRS comparison at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements states that for taxpayers residing outside the US, the threshold is total specified foreign assets above $200,000 on the last day of the year or above $300,000 at any time during the year for single filers, and above $400,000 or $600,000 respectively for married couples filing jointly. It also confirms that filing Form 8938 does not replace the FBAR obligation.

For HNW clients who are already filing Form 8938, a dormant account discovered later is usually an omitted asset on a form that was otherwise filed, and the amended returns in a catch-up should add it. As with the FBAR, the aggregate matters: a dormant share-dealing account that has quietly grown in value can push a borderline year over the Form 8938 threshold.

How do you trace forgotten UK accounts?

The government's Dormant Assets Scheme page at https://www.gov.uk/government/publications/the-dormant-accounts-scheme sets out the tracing routes. For bank and building society accounts, the first step is to contact the firm that held the money, and the page points to a free industry tracing service for lost bank and building society accounts. It also lists separate routes for investment and wealth management assets and for shares held directly with issuers. The consultation response notes that owners should contact the business that held their money in the first instance.

In our practice, the forgotten account sweep works best as a structured exercise rather than a memory test. The checklist we use is:

List every UK address you have lived at since childhood; institutions trace accounts by name, date of birth and past addresses.
Search old email, post and documents for bank names, sort codes, passbooks, welcome letters and annual interest statements.
Check whether any building society you remember has since merged, converted or been renamed, and approach the successor institution.
Ask your current UK banks for a list of all accounts ever held in your name, including closed accounts, with open and close dates.
Review HMRC records of savings interest where available, since banks report interest paid to HMRC each year.
Check for old employee share plans, flotation allocations and execution-only dealing accounts that may still hold shares or cash.
Ask each institution directly whether any balance has been transferred under the Dormant Assets Scheme, and if so, on what date.
Request historic statements or a balance history for every year in the look-back period, and keep the correspondence.

Getting historic statements for a dormant account

Once an account is found, ask the institution for statements or a year-by-year balance history covering at least the six calendar years that a streamlined submission requires, and ideally the full life of the account so the aggregate test can be checked for every year. Where full statements are no longer available, a letter confirming the balance on each interest-credit date is usually sufficient to support a reasonable approximation of the maximum value. Recordkeeping matters going forward too: the FBAR instructions require filers to keep account records, including the maximum value, for five years from the due date of the report.

How do you fix a missed FBAR after July 2026?

The IRS withdrew its Delinquent FBAR Submission Procedures page around 1 July 2026, so that route should not be relied on as a named IRS programme. The IRS FBAR page still advises that anyone not under investigation should file late FBARs as soon as possible to keep potential penalties to a minimum, and it points to the Streamlined Filing Compliance Procedures. There are two realistic routes.

The first is a late FBAR filed through the BSA E-Filing System at https://bsaefiling.fincen.treas.gov. FinCEN's guidance at https://www.fincen.gov/filing-late explains that a report filed after 15 October of the year following the reporting year must indicate a reason for late filing, selected from a drop-down list, or by choosing other and providing an explanation. This route suits a US person whose tax returns were otherwise correct and complete, where the dormant account produced no interest, or where the omitted interest is being corrected separately. It is filing only; it does not come with a formal penalty-relief framework.

The second is the Streamlined Foreign Offshore Procedures, described at https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states. For US citizens living in the UK who meet the non-residency test (including being physically outside the US for at least 330 full days in at least one of the three most recent tax years, with no US abode), the procedures require three years of delinquent or amended tax returns with all required information returns, six years of delinquent FBARs, and a Form 14653 certification that the failure resulted from non-willful conduct. Eligible taxpayers who follow the procedures are not subject to failure-to-file, failure-to-pay, accuracy-related, information return or FBAR penalties. Where a dormant account produced unreported interest, or where it pushed earlier years over the aggregate threshold, this is usually the cleaner route.

Framing a forgotten account as non-willful

A forgotten dormant account is often the clearest non-willful fact pattern we see, but the certification still has to be credible and specific. The Form 14653 narrative should explain when and why the account was opened, why it was forgotten (for example, it was opened by a parent in the client's childhood, or it was abandoned when the client moved banks), how it was discovered, and what steps were taken once it was found. It should also be consistent with the rest of the file: if other UK accounts were reported on earlier FBARs, the narrative should explain why this one was missed, not claim ignorance of the FBAR rules. Evidence that the account was never used, such as a flat balance history with only interest credits, supports the explanation.

What does not help is delay after discovery. Once an account has been found, continuing to omit it from the next FBAR is much harder to present as non-willful. The practical sequence is to trace, value, correct the history, and make sure the account is either closed, consolidated into an active account, or reported every year from now on.

The practical order of work

For a US person in the UK who has just discovered one or more forgotten accounts, the order that avoids rework is: complete the sweep of every possible institution first, obtain year-by-year balances for every account found, rebuild the aggregate test for every year in the look-back period, identify which years now require an FBAR and which filed FBARs are incomplete, quantify the omitted interest for the US returns and the UK position, and only then choose between a late FBAR with a reason for late filing and a Streamlined Foreign Offshore submission. Choosing the route before the sweep is finished is the failure mode we see most often, because a second forgotten account discovered halfway through can change which years are affected and which route fits.

Our FBAR and streamlined preparation work for UK-based US citizens and dual nationals covers the full sweep, the maximum value reconstruction, the amended returns and the non-willful narrative, so that a small forgotten account does not become a large compliance problem.