Do I need to report a French, Spanish or Portuguese bank account on an FBAR if I live in the UK?

Yes, if you are a US citizen or other US person and the aggregate value of all your foreign financial accounts exceeded 10,000 dollars at any time in the calendar year. Your UK accounts count as foreign accounts too, so for most UK-resident Americans the threshold is already met and every continental account must be listed, however small its balance.

Is my second home in France, Spain or Portugal reportable on an FBAR?

No. Foreign real estate held directly is not a financial account, and the IRS comparison of Form 8938 and FBAR requirements confirms it is not reportable on either form. The mortgage is a debt and is not listed. The local bank account that pays the mortgage, utilities and property taxes is a foreign financial account and is reportable.

Which exchange rate do I use to convert a euro balance for the FBAR?

Find the highest balance during the year in euros, then convert it using the Treasury rate for the last day of that calendar year, published by the Bureau of the Fiscal Service as the Treasury Reporting Rates of Exchange. Do not use the rate on the day of the peak or an annual average. If no Treasury rate exists, use another verifiable rate and state the source.

My euro account is joint with my British spouse. Do I report half?

No. FinCEN's instructions require each joint owner to report the entire value of the account, and balances are not prorated by ownership share. You report the full maximum value, state the number of other joint owners and give your spouse's details as principal joint owner. A spouse who is not a US person has no FBAR filing requirement of their own.

How do I file a late FBAR for an account I forgot about?

File electronically through FinCEN's BSA E-Filing System and select a reason for late filing on the cover page, or select other and explain. If an FBAR was filed but omitted the account, file an amendment instead. If your US returns also need correcting, the FBARs are normally filed as part of a Streamlined Filing Compliance Procedures submission, citing that procedure as the reason.

Do I also have to tell HMRC about the overseas account?

There is no UK report equivalent to the FBAR for a personal overseas bank account, but UK residents normally pay UK tax on foreign income. GOV.UK lists rental income on overseas property and foreign savings interest as foreign income, usually reported through Self Assessment. Relief may be claimed where the same income is taxed in more than one country.

Missed FBAR on French, Spanish and Portuguese Bank Accounts

Missed FBAR filings on a French, Spanish or Portuguese bank account are one of the most common gaps we find when we prepare US returns for UK-resident Americans and dual nationals who own a second home on the continent. The direct answer is this: the local euro account that pays the mortgage, utilities, local property taxes and the managing agent is a foreign financial account, it is added to your UK accounts when you test the 10,000 dollar aggregate threshold, and it belongs on FinCEN Form 114 for every year the aggregate was exceeded. The property itself is not reportable on an FBAR. The repair is to file late or amended FBARs through FinCEN's BSA E-Filing System with a reason for late filing, or inside a Streamlined submission where the US income tax returns also need correcting. We prepare and file these reports; nothing here replaces a review of your own facts.

Does a euro account for a second home count toward the FBAR threshold?

Yes. An FBAR is the annual Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114 by a United States person who has a financial interest in, or signature authority over, foreign financial accounts whose aggregate value exceeded 10,000 dollars at any time during the calendar year. The IRS states the test in those terms at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar. Two words in that definition do the damage for second-home owners: aggregate and foreign.

Aggregate means every foreign account is added together. For an American living in London, UK current, savings and investment accounts are all foreign financial accounts, so most of our clients are over the threshold on UK banking alone. Once that is true, every other foreign account must be listed, however small. A French current account that never holds more than a few hundred euros is still reportable.

Foreign means located outside the United States, wherever you live. FinCEN's filing instructions define a financial account to include savings, demand, checking, deposit and time deposit accounts, as well as securities and brokerage accounts. An everyday current account at a branch in Provence, on the Costa del Sol or in the Algarve sits squarely inside that definition. The instructions are published at https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf.

Why is a Missed FBAR so common on French, Spanish and Portuguese accounts?

In the returns we prepare, the continental account is rarely hidden. It is forgotten. The owner thinks of it as part of the house rather than as a bank account. The failure modes we see most often are these:

The account was opened to complete the purchase, because the lender or the notary required a local account, and nobody thought about it again once the keys were handed over.
The account exists only to service direct debits for the mortgage, utilities, insurance, building charges and local property taxes, so the owner regards it as a utility rather than an asset.
The account is in joint names with a non-US spouse who looks after the property, and the American spouse assumes it belongs to the other person.
The FBAR was filed each year but listed only the UK accounts, because the questionnaire asked about UK banking.
The property was sold and the account closed weeks later, so the year of sale, usually the year with the largest balance, was never reported.

Is the property itself, or the mortgage, reportable on an FBAR?

No. Foreign real estate that you hold directly is not a financial account and is not reported on an FBAR. The IRS comparison table at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements answers the question for foreign real estate held directly with a plain no for both the FBAR and Form 8938, and the Internal Revenue Manual at https://www.irs.gov/irm/part4/irm_04-026-016 excludes real estate from the meaning of a financial account. A villa in Mallorca or an apartment in Lisbon is not an FBAR item.

The mortgage needs a little more care. A foreign mortgage is a debt you owe to the lender, not an account in which you hold money or securities, and it does not appear in FinCEN's list of financial account types. We therefore do not list the loan itself. What we do list is everything attached to it: the current account from which repayments are collected and any deposit or pledged savings account the lender required. The property is outside the FBAR; the bank account that keeps the property running is inside it.

How do you value a euro account and convert it to dollars?

The maximum account value is a reasonable approximation of the greatest value of currency or non-monetary assets in the account during the calendar year. That is FinCEN's own definition, and the valuation is a two-step exercise. First, find the highest balance during the year in the currency of the account, which here is euros. FinCEN's instructions say that periodic account statements may be relied on, provided they fairly reflect the maximum value during the year. Second, convert that euro figure into US dollars using the Treasury rate for the last day of the calendar year.

The second step is where owners go wrong. The conversion does not use the rate on the day the balance peaked, the rate your bank applied to a transfer, or an annual average. FinCEN's instructions direct filers to use the Treasury's Financial Management Service rate for the last day of the calendar year and, if none is available, another verifiable exchange rate with its source stated. That service is now the Bureau of the Fiscal Service, and its Treasury Reporting Rates of Exchange are published quarterly at https://fiscaldata.treasury.gov/datasets/treasury-reporting-rates-exchange/treasury-reporting-rates-of-exchange. Use the euro entry as at 31 December of the reporting year, and check which way the rate is expressed before you multiply or divide.

What if the account is joint with a non-US spouse?

You report the whole account, not half of it. FinCEN's instructions state that each joint owner must report the entire value of the account, and the Internal Revenue Manual confirms that accounts are not prorated for a person's percentage of ownership. If the Portuguese account is held jointly with your British husband or wife and peaked at 30,000 euros, the full 30,000 euros is converted and reported on your FBAR, even if every euro in it came from your spouse's earnings.

The form asks for the number of joint owners, excluding the filer, and for details of the principal joint owner. A non-US spouse normally has no US taxpayer identification number, and the instructions ask for it only if known.

A spousal exception lets one spouse file for both where all of the non-filing spouse's reportable accounts are jointly owned with the filing spouse and both have signed FinCEN Form 114a. It is designed for couples where both have a filing requirement. A spouse who is not a US person has none, so the exception does not reduce what the American spouse reports.

The reverse case catches people as well. If the account is in the sole name of the non-US spouse but the American spouse can instruct the bank, the FBAR also covers signature authority, which the IRS comparison page describes as authority to control the disposition of the assets in the account. A power to pay the plumber from your spouse's Spanish account brings that account onto your report.

Are accounts held by a letting agent or notary reportable?

They can be. FinCEN's instructions say a United States person has a financial interest in an account where the owner of record or holder of legal title is an agent, nominee, attorney, or a person acting in some other capacity on behalf of the United States person with respect to the account. The legal title being in someone else's name does not, by itself, take the account off your FBAR.

In practice we separate three situations. A dedicated account that a managing or letting agent runs in its own name solely for your property falls within the agent and nominee wording and we report it. A pooled client account in which an agent or notary mixes your money with that of other clients turns on the facts, including how long the funds are held and what records identify your share; where the position is uncertain, the cautious course is to disclose. An account in your own name over which the agent has a mandate is simply your account.

What about accounts opened only for the purchase, or closed after a sale?

These are the two gaps that competing guides rarely address, and the two years in which the continental account usually holds the most money. The FBAR test is whether the aggregate exceeded 10,000 dollars at any time during the calendar year, not a year-end snapshot. An account that existed for only part of the year is still reported for that year.

Take the purchase year first. To complete, you will usually transfer the price, or the equity above the mortgage, into a local account shortly before completion. For a few days that account holds a very large balance, and that is the maximum account value for the year even though the account ends the year almost empty. If the account was then left dormant, it remains reportable in every later year in which your aggregate exceeds the threshold, which for most UK residents is every year.

Now the sale year. Proceeds land in the local account, sit there while local taxes and the mortgage redemption are settled, and are then sent to the UK. The account is often closed within weeks, so it appears on nobody's year-end list. It should be reported for the year of closure, with the peak balance converted at the Treasury rate for the last day of that calendar year, even though the account no longer existed on that date.

How does Form 8938 interact with the FBAR?

Form 8938, the Statement of Specified Foreign Financial Assets, is a separate report attached to the US income tax return, and filing one does not replace the other. The thresholds are far higher than the FBAR's. For a taxpayer living abroad who is unmarried or married filing separately, the IRS states the test as total specified foreign financial assets of more than 200,000 dollars on the last day of the tax year, or more than 300,000 dollars at any time during the year. For married taxpayers living abroad and filing jointly the figures are 400,000 and 600,000 dollars.

Three consequences follow. The property is not reported on Form 8938 either, provided you hold it directly. The euro account counts toward the Form 8938 total alongside your UK accounts and investments. And a purchase or sale year can push a client who is normally under the threshold over the any-time test, because the funds pass through a foreign account. An omitted Form 8938 is corrected on the income tax return.

How do you get old statements from a continental bank?

You need, for each account and each year, the name and address of the institution, the account number, the type of account and the maximum value during the year. The IRS says those records must generally be kept for five years from the due date of the FBAR. Rebuilding them takes longer than clients expect, so we start the document request first:

Download everything the online banking portal will give you. Many portals hold only a limited run of statements.
Write to the branch asking for duplicate statements or a transaction history for each calendar year. Expect a fee and a request for identification.
Ask for a list of every account held in your name or jointly, including linked savings and deposit accounts, with opening and closing dates. This is how forgotten sub-accounts surface.
For a closed account, ask for a closure confirmation showing the closing date and final balance.
Where early records cannot be obtained, reconstruct the peak balance from the completion statement, mortgage statements and transfer confirmations from your UK bank, and keep a note of the method.

How are late FBARs filed today?

The FBAR is due on 15 April following the calendar year reported, with an automatic extension to 15 October that does not have to be requested. A report filed after 15 October is late. There are two filing mechanics for a late report, and one additional mechanic for a report that was filed on time but left the continental account off.

Late FBAR filed directly. Where no FBAR was filed for a year, the report is filed electronically through FinCEN's BSA E-Filing System. The cover page asks filers of a late report to select a reason from a drop-down list and, if none fits, to select other and give a written explanation. The IRS guidance for people who have not been contacted about a late FBAR and are not under investigation is to file late FBARs as soon as possible to keep potential penalties to a minimum. The separate IRS page that once described a named procedure for delinquent FBARs has been withdrawn.

Amended FBAR. Where an FBAR was filed for the year but omitted the French, Spanish or Portuguese account, the correction is an amendment rather than a new late report. The e-filing system has an amendment submission type and asks for the identifier of the prior report. This is the most frequent case among our UK-resident clients, because they were already filing for their UK accounts.

FBARs inside a Streamlined submission. Where the US income tax returns are also wrong or missing, for example because rental income, interest or a gain on sale was never reported, the Streamlined Filing Compliance Procedures are usually the framework we examine. For taxpayers living abroad, the Streamlined Foreign Offshore Procedures are described at https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-states. They require the most recent three years of delinquent or amended returns, the most recent six years of FBARs for which the due date has passed, and a signed certification on Form 14653 that the failures resulted from non-willful conduct. The IRS defines non-willful conduct there as conduct that is due to negligence, inadvertence, or mistake. US citizens meet the non-residency requirement if, in at least one of the most recent three years, they had no US abode and were physically outside the United States for at least 330 full days.

Under the foreign offshore procedures a taxpayer who complies with all the instructions is not subject to failure-to-file, failure-to-pay, accuracy-related, information return or FBAR penalties, unless a later examination finds the non-compliance was fraudulent or the FBAR violation was willful. There is no offshore penalty under the foreign procedures. The FBARs are still filed through BSA E-Filing, selecting other as the reason and entering Streamlined Filing Compliance Procedures in the explanation box. If your returns were complete and only the FBAR was wrong, the direct late or amended filing is normally the better fit.

What penalties apply to a Missed FBAR after Bittner?

The civil penalty framework has two tiers. A non-willful violation carries a statutory maximum of 10,000 dollars, and a willful violation a maximum of the greater of 100,000 dollars or 50 percent of the balance in the account at the time of the violation. Both base amounts are adjusted annually for inflation in the penalty table at 31 CFR 1010.821. We have not quoted the adjusted amounts because they change each year.

Bittner v. United States, decided by the Supreme Court on 28 February 2023, settled how the non-willful penalty is counted. The Court held that the 10,000 dollar maximum for a non-willful failure to file a compliant report accrues on a per-report basis, not a per-account basis. The opinion is at https://www.supremecourt.gov/opinions/22pdf/21-1195_h3ci.pdf. For a second-home owner this is significant. One year's FBAR that omitted a French current account, a linked French savings account and a Portuguese account is one non-willful violation for that year, not three. Several years of deficient reports can still mean several penalties, one for each year.

The willful tier was not changed by Bittner, and the Internal Revenue Manual treats willful reporting penalties as applying per account. The manual describes willfulness as covering a person who knowingly or recklessly violated a legal duty, and a person who acted with willful blindness by making a conscious effort to avoid learning about it. The burden of establishing willfulness is on the IRS, which is why the factual history of the omission matters so much.

The manual also states that a non-willful penalty should not be imposed where the violation was due to reasonable cause and accurate delinquent or amended FBARs are filed. That is not a guarantee, which is why we settle the willfulness analysis before choosing a route.

Worked scenario: a London-based dual national with a house in the Algarve

The following is an illustration only. The figures are invented and the exchange rate is an assumption, not a published Treasury rate. Claire is a US and UK dual national living in London. She and her British husband bought a house in the Algarve and opened a joint euro current account to pay the mortgage, utilities, municipal property tax and a property manager. Claire has filed a US return and an FBAR every year, listing her UK accounts. The Portuguese account has never appeared.

For the year in question the euro account peaked at 27,000 euros in the spring, after a transfer to fund a new roof, and held 1,400 euros on 31 December. Assume for illustration that the Treasury year-end rate was 0.90 euros to one US dollar. The maximum account value is the peak converted at the year-end rate: 27,000 divided by 0.90 gives 30,000 dollars. The closing balance and the rate on the day of the transfer are irrelevant.

Because the account is joint, Claire reports the full 30,000 dollars, enters one joint owner and gives her husband's details, leaving the US taxpayer identification number blank. Her husband files nothing. Because her UK accounts already exceeded 10,000 dollars in aggregate, the Portuguese account was reportable in every year since it was opened.

The account pays no interest, the house is not let, and Claire's US returns reported all her income. Only the FBARs are deficient. We would prepare amended FBARs for the open years, each adding the Portuguese account at the correct Treasury year-end rate, and submit them through BSA E-Filing with a short factual explanation. Had the house been let and the rent left off her US returns, the analysis would move to amended returns and a Streamlined Foreign Offshore submission with Form 14653.

What does the UK side look like for the same property?

The UK has no direct equivalent of the FBAR for a personal overseas bank account, but a UK resident is normally taxed on foreign income. GOV.UK lists rental income on overseas property and foreign investment income such as savings interest among the examples at https://www.gov.uk/tax-foreign-income, and says foreign income is usually reported in a Self Assessment tax return. Rent from letting the continental home, and any interest on the euro account, therefore belong on the UK return as well as the US one.

Where the same income is taxed in the country where the property stands, in the UK and in the United States, relief is claimed rather than assumed. GOV.UK explains that you may be able to claim tax relief if you are taxed in more than one country at https://www.gov.uk/tax-foreign-income/taxed-twice. We prepare the two returns together so that the same rent, expenses and foreign tax appear consistently on each.

What should you do now if the account has never been reported?

Start with the bank records, establish for each of the last six years whether an FBAR was filed, check the US returns for unreported interest, rent or gains, write down plainly how the account came to be left off, and file before any contact from the IRS. A forgotten euro account behind a second home is one of the more fixable problems in US and UK cross-border compliance, provided it is dealt with completely: every account, every open year, the right exchange rate, and a correction route that matches the state of the income tax returns. We prepare the late and amended FBARs, any amended US returns and Form 8938, and the matching UK Self Assessment entries as a single piece of work.