Is my Help to Buy ISA still reportable now that the scheme has closed?

Yes. The Help to Buy ISA closed to new savers in 2019, but GOV.UK confirms existing holders can keep saving until November 2029 and claim the bonus by 1 December 2030. While the account exists and your aggregate foreign balances exceed $10,000, it belongs on the FBAR. It must also be reported for the calendar year in which you close it or transfer it into a Lifetime ISA.

Is the Lifetime ISA government bonus taxable in the United States?

The IRS has not published guidance that specifically addresses the US tax treatment of the Lifetime ISA or Help to Buy ISA bonus. Interest, dividends and gains inside the ISA are taxable in the US, because the UK wrapper gives no US shelter. For the bonus itself, we take a conservative approach and discuss reporting it as income when credited rather than assuming it is tax-free.

What is the 25% Lifetime ISA withdrawal charge and does it affect US reporting?

GOV.UK states that an unauthorised Lifetime ISA withdrawal carries a 25% charge, which recovers the government bonus and can cost part of your own savings. Withdrawals for a first home costing £450,000 or less, from age 60 or for terminal illness avoid it. The charge does not change FBAR reporting; you still report the account's maximum value for every year it was open.

Can I keep my Lifetime ISA if I leave the UK, and do I still file an FBAR?

GOV.UK confirms you can keep an ISA open after moving abroad and retain UK tax relief, but you generally cannot pay in while non-resident unless you are a Crown employee or their spouse or civil partner. For US purposes, the account remains a foreign financial account, so it stays on your FBAR each year your aggregate foreign balances exceed $10,000.

How do I fix years of missed FBARs on my ISA accounts?

If your US returns already reported all ISA income, file the delinquent FBARs through FinCEN's BSA E-Filing System with an explanation for filing late. If your returns also omitted ISA income and you live outside the US, the Streamlined Foreign Offshore Procedures usually apply: three years of returns, six years of FBARs and a Form 14653 non-willful certification, with penalties removed for eligible taxpayers.

Missed FBAR on a UK Lifetime ISA or Help to Buy ISA

Q: Do I need to report my UK Lifetime ISA on the FBAR?

Yes, if you are a US person and the combined maximum value of all your foreign financial accounts exceeded $10,000 at any time during the calendar year. A Lifetime ISA held with a UK bank, building society or investment platform is a foreign financial account, whether it holds cash or stocks and shares. ISA status is a UK concept only and gives no exemption from FinCEN Form 114 reporting.

A Missed FBAR UK Lifetime ISA problem arises when a US citizen or green card holder living in Britain saves into a Lifetime ISA or a legacy Help to Buy ISA and never lists that account on FinCEN Form 114. The direct answer is simple: both accounts are foreign financial accounts for FBAR purposes, the UK tax-free wrapper gives no US tax shelter, and a missed filing is usually fixable by filing late through FinCEN's BSA E-Filing System with a reason, or through the Streamlined Foreign Offshore Procedures if US tax returns also left out income.

In the returns we prepare for American professionals in London, the Lifetime ISA is one of the most frequently overlooked accounts. It feels like a government savings scheme rather than a bank account, the balance is modest compared with a bonus or a brokerage portfolio, and UK colleagues never think of it as anything that needs reporting. Yet it is often the account that tips a young investment banker's aggregate foreign balances over the FBAR threshold in the first year they arrive, and it stays on the reporting list every year afterwards. This guide explains exactly how the UK rules and the US rules interact, what a correct FBAR entry looks like, and how to repair missed years without overreacting.

What is a Lifetime ISA and how does the UK scheme work?

A Lifetime ISA is a UK individual savings account designed to help people buy a first home or save for later life, with a government bonus added to contributions. According to GOV.UK at https://www.gov.uk/lifetime-isa, you must be 18 or over but under 40 to open one, and you can keep paying in until you turn 50. The key verified figures are:

Contributions of up to £4,000 per tax year, which count toward the overall ISA allowance of £20,000 for the 2026 to 2027 tax year.
A government bonus of 25% of what you pay in, up to a maximum of £1,000 per year.
The account can hold cash, stocks and shares, or a combination of both.
An unauthorised withdrawal triggers a 25% withdrawal charge, which GOV.UK describes as recovering the government bonus.
Penalty-free withdrawals are available to buy a first home costing £450,000 or less, from age 60, or if terminally ill with less than 12 months to live.
For a home purchase, the account must have been open for at least 12 months after the first payment, you must use a conveyancer or solicitor, and you must be buying with a mortgage.

The withdrawal charge deserves a closer look because it is harsher than it sounds. If you pay in £4,000 and receive a £1,000 bonus, the account holds £5,000. A 25% charge on £5,000 is £1,250, so you lose the whole bonus and £250 of your own money. For high earners buying in prime London, the £450,000 property cap is the constraint we see bite most often: a first flat in Zones 1 and 2 frequently costs more, and using the LISA money on that purchase means the charge applies. That UK consequence does not change the US reporting position at all, but it often changes when and how the account is closed, which affects the FBAR maximum value in the year of purchase.

What happened to the Help to Buy ISA?

The Help to Buy ISA is a closed UK first-home savings scheme. GOV.UK at https://www.gov.uk/help-to-buy-isa confirms that you can no longer open one; the scheme closed to new savers at the end of November 2019. People who opened an account before then can continue to save until November 2029 and must claim the bonus by 1 December 2030. The published rules are a 25% bonus with a maximum bonus of £3,000, reached on savings of £12,000, monthly payments of up to £200, and property price caps of £250,000 outside London and £450,000 in London.

GOV.UK's Lifetime ISA guidance also states that you can transfer money from a Help to Buy ISA into a Lifetime ISA, but moving money the other way triggers the 25% withdrawal charge. That transfer route matters for FBAR purposes because a year in which money moves from a Help to Buy ISA into a Lifetime ISA is a year with two separate reportable accounts, even if one of them was closed a few weeks after the transfer. Help to Buy ISAs were cash accounts, so they do not raise the fund reporting issues discussed below for stocks-and-shares Lifetime ISAs.

Is a Missed FBAR UK Lifetime ISA filing a real compliance issue?

Yes. The FBAR, formally FinCEN Form 114, is an annual report of foreign financial accounts that a US person must file when the aggregate value of all their foreign financial accounts exceeded $10,000 at any time during the calendar year. The IRS summarises the rule at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar. The threshold is an aggregate test, not a per-account test, so a Lifetime ISA holding a few thousand pounds counts fully once your UK current account, easy access savings and any workplace share plan account are added together.

A Lifetime ISA held with a UK bank, building society or investment platform is a foreign financial account from a US perspective. Whether it is a cash LISA or a stocks-and-shares LISA, it is maintained by a financial institution outside the United States and is reportable. The same applies to a Help to Buy ISA. The ISA label is a UK tax concept only. The United States does not recognise ISA status, so there is no exemption from FBAR reporting and no US tax shelter for the income inside the wrapper.

The FBAR is due on April 15 following the calendar year, with an automatic extension to October 15 that does not need to be requested. It is filed electronically through FinCEN's BSA E-Filing System at https://bsaefiling.fincen.gov, separately from the federal income tax return. Filers must keep records of each account, including the account number, the institution name and address, the account type and the maximum value during the year, for five years from the FBAR due date. Penalties for non-filing are adjusted annually for inflation and the IRS points readers to Publication 5569 rather than a single fixed figure, so we do not quote a number here.

Why US persons in the UK miss the Lifetime ISA on the FBAR

The failure mode we see most often is not deliberate concealment. It is a combination of small, understandable assumptions made by capable people who are busy building a career in London. The recurring patterns are:

Treating the LISA as a government scheme rather than a bank or platform account, so it never appears on the list sent to a US preparer.
Assuming that because the balance is under $10,000, it does not need reporting, without realising the threshold is an aggregate across all foreign accounts.
Believing the 25% bonus and ISA tax-free status carry over to the US return.
Opening a LISA on a phone app and forgetting it exists after the first contribution.
Closing a Help to Buy ISA or LISA on completion of a flat purchase and assuming a closed account is not reportable for that year.
Leaving the UK for New York or Hong Kong and assuming a dormant ISA falls off the reporting list.

On that last point, GOV.UK at https://www.gov.uk/individual-savings-accounts/if-you-move-abroad confirms that you can keep an ISA open after moving abroad and you keep UK tax relief on it, but you generally cannot pay in while non-resident unless you are a Crown employee working overseas or their spouse or civil partner. You must tell your provider when you stop being UK resident. From a US perspective, an ISA you keep open after leaving Britain remains a foreign financial account and stays on the FBAR every year it exists and your aggregate balances exceed the threshold.

How is a Lifetime ISA taxed on a US return?

The FBAR is an information report and carries no tax by itself, but a missed FBAR usually travels with a second problem: income inside the ISA that never reached Form 1040. For US purposes, interest earned in a cash LISA or Help to Buy ISA is ordinary interest income in the year it is credited, reported in US dollars. Dividends and gains inside a stocks-and-shares LISA are also taxable, subject to the fund rules below. The ISA wrapper removes UK tax, which means there is no UK tax paid to generate a foreign tax credit against the US liability on that income.

The government bonus is the grey area. The IRS has not issued guidance that specifically addresses the US income tax treatment of the Lifetime ISA or Help to Buy ISA bonus. In the returns we prepare, we take a conservative approach and discuss with each client whether the bonus should be reported as income when it is credited, rather than assuming it is a non-taxable gift or a reduction in purchase price. We do not treat the absence of guidance as confirmation that the bonus is tax-free, and anyone relying on a more aggressive position should document why.

Do stocks-and-shares Lifetime ISAs create PFIC reporting?

Often, yes. A passive foreign investment company, or PFIC, is a non-US corporation whose income or assets are predominantly passive, a definition that typically catches UK-domiciled open-ended funds, unit trusts and ETFs. A stocks-and-shares LISA invested in UK or Irish funds may therefore hold PFICs, which can require Form 8621 for each fund and default to a punitive excess distribution regime unless an election applies. The IRS form page is at https://www.irs.gov/forms-pubs/about-form-8621. Cash LISAs and Help to Buy ISAs do not raise this issue. PFIC analysis is a subject in its own right, so the practical point for this article is that a stocks-and-shares LISA should never be remediated as though it were a simple savings account.

How do the FBAR and Form 8938 overlap for ISA accounts?

Form 8938 is a separate IRS form, attached to the income tax return, that reports specified foreign financial assets once higher thresholds are crossed. The IRS comparison at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements sets the thresholds for taxpayers living abroad at more than $200,000 at year end or $300,000 at any time for unmarried filers and married filing separately, and more than $400,000 at year end or $600,000 at any time for married filing jointly. A Lifetime ISA or Help to Buy ISA is a foreign financial account for both regimes, so a US person above both thresholds reports the same ISA on the FBAR and on Form 8938. Filing one does not satisfy the other.

The penalty structures also differ. The IRS comparison page states that failing to file Form 8938 can carry a penalty of up to $10,000, plus an additional $10,000 for each 30 days of non-filing after IRS notice, up to a potential maximum of $60,000, and criminal penalties may also apply. For many younger savers the ISA balance alone is far below the Form 8938 thresholds, but high-net-worth US persons with family money, carried interest or deferred compensation often cross them, which is why we check both forms whenever a missed ISA is discovered.

How do you calculate the maximum value of a LISA for the FBAR?

The FBAR asks for the maximum value of each account during the calendar year, which is a reasonable approximation of the highest balance at any point, not the year-end figure. Values are converted from pounds to US dollars using the Treasury Reporting Rates of Exchange for the last day of the calendar year, published at https://fiscaldata.treasury.gov, even if the peak occurred earlier in the year. For ISAs, three situations need care:

The bonus month. LISA bonuses are credited after contributions, so the peak is often after the bonus lands rather than at the tax year end in April.
The purchase year. Balances usually peak just before the money is released to the conveyancer. The account may then be closed, but it is still reported for that calendar year using the pre-completion peak.
The transfer year. When a Help to Buy ISA is transferred into a Lifetime ISA, both accounts are reported, each with its own maximum value, even though the same money passed through both.

UK providers do not issue a US-style year-end statement showing a maximum balance, so we rebuild the figure from monthly statements or the app transaction history. Where statements for older years are no longer available online, providers can usually supply historical statements on request, and a documented reasonable estimate is better than leaving the account off entirely.

How do you fix a missed FBAR on a Lifetime ISA or Help to Buy ISA?

The right route depends on one question: were your US income tax returns complete? If every dollar of ISA interest, dividends and gains was already reported on Form 1040 and the only failure was the FBAR itself, the usual fix is to file the delinquent FBARs late through the BSA E-Filing System and select or explain a reason for filing late. The IRS FBAR page tells late filers to follow FinCEN's late filing instructions and explain the delay. Note that the IRS withdrew its former Delinquent FBAR Submission Procedures page around 1 July 2026, so late FBARs should be filed directly through BSA E-Filing with an explanation, not described as a named IRS programme.

If the returns also omitted ISA income, filing late FBARs alone leaves the tax problem untouched. For US persons living in the UK, the Streamlined Foreign Offshore Procedures are the standard route where the failures were non-willful. The IRS page at https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states sets out the key requirements:

Meet the non-residency test: for US citizens and green card holders, no US abode and physically outside the United States for at least 330 full days in any one of the most recent three years for which the US return due date has passed.
File three years of delinquent or amended federal income tax returns, using Form 1040 for returns not previously filed or Form 1040X for returns that need amending.
File six years of delinquent FBARs electronically through BSA E-Filing, entering Streamlined Filing Compliance Procedures as the reason for late filing.
Sign Form 14653, certifying that the failures resulted from non-willful conduct, meaning negligence, inadvertence, mistake or a good faith misunderstanding of the law.
Pay any tax and interest due, and send the paper submission to the IRS address in Austin, Texas, because electronic submissions are not accepted under the procedure.

For eligible taxpayers, the IRS states that the procedure removes failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties and FBAR penalties. The non-willful certification is the heart of the submission. It must tell a specific, truthful story about why the ISA was missed. Generic language copied from a template is a weakness; a clear explanation that the client believed ISA status applied in the US and did not know the threshold was aggregate is far stronger when it matches the facts.

Worked scenario: a London analyst with a LISA and a Help to Buy ISA

This is an illustration only, with figures invented for explanation and an assumed exchange rate of £1 = $1.30 used throughout for simplicity; a real filing uses the Treasury year-end rate for each year. Hannah is a US citizen who moved to London for a graduate role at an investment bank. She opened a Help to Buy ISA in 2019 before the scheme closed, then opened a cash Lifetime ISA at 26 and paid in the maximum each year. She also holds a UK current account and an easy access savings account. Her US returns reported her salary and claimed foreign tax credits, but her preparer never asked about ISAs, and she filed no FBARs.

In the illustrative year, her current account peaked at £9,000 around bonus time, her easy access savings at £6,000, her Help to Buy ISA at £7,000 and her LISA at £12,000 after the bonus was credited. The aggregate of the maximums is £34,000, or about $44,200 at the assumed rate, well over the $10,000 FBAR threshold, and she was over it in each earlier year too. Her balances are far below the Form 8938 thresholds for a single filer living abroad. The cash ISAs earned interest that never appeared on her Form 1040, and the bonuses raise the unresolved question discussed above.

Because her returns omitted income, a late FBAR filing alone would not fix her position. She meets the 330-day non-residency test easily, has no US abode, and her failure was a genuine misunderstanding. Her remediation therefore runs through the Streamlined Foreign Offshore Procedures: three years of amended returns adding ISA interest, with the bonus treatment agreed conservatively; six years of FBARs listing all four accounts, with each account's maximum value; a Form 14653 explaining her belief that ISA status applied in the US; and payment of the resulting tax and interest. In the year she later transfers her Help to Buy ISA into the LISA and buys a flat, both ISAs appear on that year's FBAR with their pre-transfer and pre-completion peaks.

What should you do next if you have a missed ISA filing?

Start by listing every UK account you have held since you became a US person or arrived in the UK, including closed ISAs, old Help to Buy accounts and investment platform wrappers. Gather monthly statements so maximum values can be rebuilt. Check whether your US returns included ISA interest, dividends and gains. That single answer decides whether you need late FBARs through BSA E-Filing or a full Streamlined Foreign Offshore submission. If a stocks-and-shares LISA holds funds, flag it early so the Form 8621 work is scoped before any deadline pressure. Once you are compliant, keep the ISA on your annual checklist for as long as the account exists, including after you leave Britain, and remember that FinCEN's guidance is available at https://www.fincen.gov for the underlying Bank Secrecy Act reporting rules.

The good news for most savers is that a Lifetime ISA or Help to Buy ISA that was missed through misunderstanding is exactly the kind of issue the non-willful routes exist to resolve. The mistakes that make it worse are waiting until the IRS writes first, filing only some of the years, reporting year-end balances instead of maximum values, or amending returns without the matching FBARs. A complete, consistent submission prepared once is far cheaper than a partial fix that has to be revisited.