Do I report a UK account on the FBAR if its balance was zero all year?

Yes, if you are required to file an FBAR for that year. The regulation at 31 CFR 1010.350 requires the account relationship to be reported, and the balance matters only for the $10,000 aggregate filing test. Once the aggregate maximum value of all your foreign accounts exceeds $10,000 at any time in the year, each account is listed, including one with a maximum value of zero.

What maximum account value do I enter for a UK current account that was overdrawn all year?

Enter zero. FinCEN's line item filing instructions for Form 114 state that if the value of the account results in a negative (minus) value, zero is entered in item 15, maximum account value. That applies only where the account never went into credit during the calendar year. If it was in credit on even one day, the maximum is that highest positive balance.

Can I net my UK overdraft against my savings to stay under the $10,000 FBAR threshold?

No, on the wording of the FinCEN instructions. Each account must be valued separately, a negative result is entered as zero, and the threshold is tested against the aggregate of those maximum account values. An overdraft therefore contributes zero to the total and does not reduce the credit balances in your other accounts. Netting is not a step the instructions provide for.

Is a UK credit card or mortgage account reportable on the FBAR?

A pure loan, mortgage or credit card account is generally regarded by preparers as outside the FBAR, because the listed account types are deposit, securities and similar holdings. We have not found a FinCEN statement excluding them in express words, so it is a reading, not a published rule. A linked savings or offset account is reportable separately at its full positive value.

Does HMRC need to know about my FBAR or my overdrawn account?

No. The FBAR is filed with FinCEN in the United States, not with HMRC, and it does not change UK tax. The UK-side issue is interest: GOV.UK confirms that banks and building societies tell HMRC about interest paid after 5 April each year, so accounts that were in credit earlier in the year should be reported consistently on both the UK and US returns.

How do I fix earlier FBARs that left off empty or overdrawn UK accounts?

File an amended FBAR for each affected year through FinCEN's BSA E-Filing System, listing every account. If no report was filed, file it late and select a reason for late filing. Where UK income was also omitted from US returns, the Streamlined Foreign Offshore Procedures require three years of returns, six years of FBARs and Form 14653, with no penalty for eligible non-residents.

Missed FBAR: Overdrawn and Zero-Balance UK Accounts

A Missed FBAR is very often not a missing form at all but a filed form with accounts left off it, and the accounts most often left off are the overdrawn current account, the zero-balance account and the legacy account with a few pounds in it. The rule is short. Once the aggregate maximum value of all your foreign financial accounts exceeds $10,000 at any time in the calendar year, every one of those accounts is reported on FinCEN Form 114, whatever its own balance. An account that was overdrawn all year is still listed, with a maximum value of zero. An account that held nothing is still listed, also at zero.

In the returns we prepare for Americans in the UK, the pattern is consistent. The private bank account, the investment portfolio and the main savings account are all on the FBAR. The joint household account that lives in its arranged overdraft, the sweep account that empties itself every night and the account opened at university and never closed are not, because the reader decided that nothing in it means nothing to report. That instinct is wrong. This article deals only with those accounts, overdrawn, nil and near-nil: what the regulations and FinCEN instructions say, where they are silent, and how to put right the years already filed without them.

Does a zero-balance or overdrawn UK account have to go on the FBAR?

Yes, if you are required to file at all. The FBAR is a report of relationships with foreign financial institutions, not a report of balances. The regulation at 31 CFR 1010.350(a), which you can read at https://www.ecfr.gov/current/title-31/section-1010.350, requires each United States person with a financial interest in, or signature or other authority over, a bank, securities or other financial account in a foreign country to report that relationship for each year in which it exists. Nothing in that sentence refers to the amount in the account. The amount matters at only one point: deciding whether a report is required for the year in the first place.

That filing trigger is an aggregate. FinCEN's electronic filing instructions say 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, and that no FBAR is required if the person did not have $10,000 of maximum value or aggregate maximum value at any time during the calendar year. Once the trigger is met, 31 CFR 1010.306(d), at https://www.ecfr.gov/current/title-31/section-1010.306, requires that all information called for in the form be furnished. The form calls for each account, and there is no de minimis exclusion for an individual account.

The IRS makes the same point with its own example in Publication 5569, the FBAR reference guide at https://www.irs.gov/pub/irs-pdf/p5569.pdf. A filer holds three foreign accounts with maximum values of $100, $12,000 and $3,000. All three are reported, including the $100 account. A nil account is treated no differently: it existed during the year, so it is listed.

How do you report maximum account value when the account was overdrawn all year?

You enter zero. This is one of the few points on which the FinCEN instructions are explicit, and it is the point most competitor guides skip. The line item filing instructions for FinCEN Form 114, published at https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf, carry a note under the heading on monetary amounts which reads: after determining the value of the account, if the value results in a negative (minus) value, enter zero (0) in item 15, maximum account value. FinCEN repeats it on its web page at https://www.fincen.gov/reporting-maximum-account-value.

Read the rule with care, because it is narrower than it first appears. The maximum value of an account is defined in the same instructions as a reasonable approximation of the greatest value of currency or non-monetary assets in the account during the calendar year. The greatest value of an account that is usually overdrawn is its best day, not its worst. If a current account sat at minus 4,000 pounds for most of the year but went into credit by 2,300 pounds for two days after a bonus was paid in, the maximum account value is 2,300 pounds, converted to dollars. Zero is the correct entry only where the account never once went into credit during the calendar year, so that its highest point was itself a negative number.

Three practical consequences follow from the wording.

The account is still reported. The instruction tells you what to put in item 15; it does not tell you to omit the account. An overdrawn account appears in Part II (or Part III if joint) with its account number, the institution's name and address, and a maximum value of 0.
The depth of the overdraft is irrelevant. The minimum value of an account is never reported.
Amount unknown is not a substitute. Item 15a exists for an account whose value cannot be determined. An overdrawn account has a determinable value, which is zero, so the box should not be ticked merely because the statements show negative figures.

Periodic statements may be relied on to establish the maximum, provided they fairly reflect the maximum account value during the year. For an overdrawn account we work from the full statements, not month-end balances, because a salary credit that briefly lifts the account into credit will not show in a month-end figure.

Does a negative balance reduce the aggregate for the $10,000 test?

No, on the wording of the instructions, and this is where an overdrawn account causes a Missed FBAR for the whole year rather than a missed line. The instructions say that where the filer had a financial interest in more than one account, each account must be valued separately. The threshold is then tested against the aggregate of the maximum account values of the accounts. An account whose value comes out negative has, for this purpose, a maximum account value of zero. Adding zero to the other accounts leaves the total unchanged. There is no step in the instructions at which a negative figure is carried into the sum and set against credit balances elsewhere.

We want to be precise about the limits of that statement. We have found no FinCEN sentence that says in terms that overdrafts may not be netted against credit balances. The conclusion comes from the mechanics the instructions prescribe: value each account separately, floor a negative result at zero, then add. The FBAR never sees a net position; it sees a list of accounts, each with its own high point.

Notice also what the aggregate is made of. It is the sum of each account's own maximum, and those maxima usually fall on different days. Money moved from one UK account to another during the year is counted in the maximum of both. The Internal Revenue Manual at https://www.irs.gov/irm/part4/irm_04-026-016 does subtract transfers between accounts, but only when an examiner calculates the highest aggregate balance used to cap penalties. That is an enforcement calculation, not a filing rule.

Is an arranged overdraft a reportable account, and what about loans and credit cards?

An arranged overdraft is not an account. It is a facility attached to a current account, and the current account is squarely within the definition. Under 31 CFR 1010.350(c) a bank account means a savings deposit, demand deposit, checking or any other account maintained with a person engaged in the business of banking. A UK current account is a checking account in US terms whether it is in credit or using its overdraft.

Standalone borrowing is a different question, and here we have to be straightforward about what the official material does and does not say. The types of account that FinCEN's instructions list by name are securities, brokerage, savings, demand, checking, deposit and time deposit accounts, plus certain insurance, annuity and pooled fund interests. Every one of them is an arrangement in which the institution holds something for the customer. A mortgage, a personal loan or a credit card runs the other way, and the general view among preparers is that a pure debt relationship of that kind is not a financial account for FBAR purposes. We have not, however, found a FinCEN or IRS statement that excludes loan or credit card accounts in express words, and the regulation's phrase about any other account maintained with a bank is broad. We therefore treat the exclusion as a well-supported reading, not a published rule.

The reading comes under strain in two situations. A card or loan account that has been overpaid and carries a material credit balance looks very like a deposit, and the cautious course is to report it. And where secured lending sits alongside a pledged cash or portfolio account, the pledged account is reportable in its own right at its full positive value; the loan does not reduce it.

How are offset and sweep accounts treated?

Both produce nil or near-nil accounts by design, and both are routinely omitted. The principle that each account is valued separately resolves most of the questions.

Offset mortgage savings pots. Where savings are held in a separate account whose balance reduces the interest charged on a mortgage, the savings account is a deposit account reported at its gross maximum. The mortgage debt does not reduce it. If the arrangement is instead a single current-account mortgage that is permanently overdrawn, the logic of the previous sections applies: it is one account, reported with a maximum value of zero unless it went into credit.
Zero-balancing sweep accounts. An account that sweeps to nil every evening is not a nil account for FBAR purposes. Its maximum value is its highest intraday or pre-sweep balance, so far as the statements fairly reflect it, and that can be large. The account receiving the sweep is reported as well.
Feeder and collection accounts. Accounts used only to receive rent, dividends or a single annual payment and then emptied are reported at the value of the largest sum that passed through them.

The common thread is that a year-end balance of nil says nothing about the maximum. The question is always the highest point the account reached at any time between 1 January and 31 December.

What about accounts opened or closed mid-year with nothing in them at year end?

They are reported for the year in which they existed, at their maximum value during the part of the year they were open. Closed and dormant accounts are covered in separate articles; the point here is specific to nil balances. An account opened in December with no funds paid in until January has a maximum value of zero for the year of opening and is still a relationship that existed in that year. An account opened, never funded and closed within the same year is still a relationship the regulation asks for, and we list it at zero.

How do you convert a small or nil maximum value into dollars?

Zero converts to zero, and that is the whole of the exercise for a nil or overdrawn account. For a near-nil account the method is the same as for any other. Step 1 is to find the maximum in the currency of the account. Step 2 is to convert it using the Treasury Reporting Rates of Exchange for the last day of the calendar year, published at https://fiscaldata.treasury.gov/datasets/treasury-reporting-rates-exchange/treasury-reporting-rates-of-exchange, whatever date the maximum actually fell on. Amounts are recorded in US dollars rounded up to the next whole dollar, so a legacy account with a maximum of 40 pence is entered as 1 dollar, not 0.

Worked illustration: five UK accounts, three of them empty

The following is an illustration only. The figures are invented, and the exchange rate is an assumption chosen to make the arithmetic easy: we assume a year-end Treasury rate of 0.80 pounds to the dollar, so that each sterling figure is divided by 0.80. The real rate for any year must be taken from the Treasury table.

An unmarried US citizen working in investment banking in London held five UK accounts during the calendar year. Her previous preparer listed two of them.

Private bank current account: maximum 480,000 pounds, reported at $600,000. This was on the FBAR.
Reserve account fed by a nightly sweep: nil at every month end, but with a pre-sweep maximum of 36,000 pounds, reported at $45,000. This was on the FBAR at an understated figure taken from the year-end balance.
Joint household account with an arranged overdraft: never in credit during the year, closest point to zero minus 150 pounds, deepest point minus 4,000 pounds. Maximum account value: 0. Omitted.
Legacy current account opened years earlier: balance of nil throughout the year. Maximum account value: 0. Omitted.
Bridging deposit account opened in March and closed in November: maximum 120,000 pounds, reported at $150,000, year-end balance nil. Omitted because it did not exist on 31 December.

The aggregate of the maximum account values is $600,000 plus $45,000 plus 0 plus 0 plus $150,000, a total of $795,000. All five accounts belong on the FBAR. The overdraft of 4,000 pounds, which would be $5,000 at the assumed rate, is not deducted from anything. The joint account is reported in Part III with the full value, here zero, and her partner's details as joint owner.

The netting error matters most at the margin, so consider a second, smaller illustration at the same assumed rate. Her adult son, also a US citizen, has a current account with a maximum of 6,200 pounds ($7,750), a savings account with a maximum of 3,900 pounds ($4,875) and a student account that was overdrawn all year by up to 4,000 pounds. Valued separately, the aggregate is $7,750 plus $4,875 plus 0, which is $12,625, and an FBAR listing all three accounts is required. Had he netted the $5,000 overdraft against the credit balances he would have arrived at $7,625 and wrongly concluded that he had nothing to file.

How does Form 8938 treat the same accounts?

Form 8938 reaches a similar answer on negative values by its own route, and differs on almost everything else. The instructions at https://www.irs.gov/instructions/i8938 say, under the heading on assets with no positive value, that if the maximum value of a specified foreign financial asset is less than zero, a value of zero is used. So an overdrawn account does not reduce the total used to test the Form 8938 thresholds either.

The differences lie in the thresholds and the measurement. The IRS comparison at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements gives the thresholds for individuals living outside the United States as total assets of more than $200,000 on the last day of the tax year or more than $300,000 at any time for an unmarried filer, and more than $400,000 or $600,000 for a married couple filing jointly. The FBAR threshold is $10,000 in aggregate. A filer can be well under the Form 8938 thresholds and still have an FBAR obligation that reaches every nil account.

How do you fix a Missed FBAR or an FBAR that left accounts off?

The remedy depends on whether a report was filed for the year and on why the accounts were missed. The 2025 report is a useful place to start, because its automatically extended due date is 15 October 2026 and an FBAR filed by then is simply on time. The IRS confirms at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar that the report is due on 15 April with an automatic extension to 15 October, with no request needed.

For earlier years there are two routes.

Late or amended FBARs through the BSA E-Filing System at https://bsaefiling.fincen.gov. Where no report was filed, a late report is submitted on the current electronic form, and the filer selects a reason for late filing from the drop-down list or chooses other and gives a written explanation. Where a report was filed but omitted accounts, an amended report is filed for that year listing every account, including the nil and overdrawn ones. The IRS says that a person who has not been contacted about a late FBAR and is not under civil or criminal investigation should file late FBARs as soon as possible.
The Streamlined Filing Compliance Procedures. Where the missed FBARs sit alongside unreported income, typically UK interest or investment income left off the US return, the Streamlined Foreign Offshore Procedures described at https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-states require three years of delinquent or amended returns, six years of FBARs and a signed Form 14653 certifying non-wilful conduct. For those who meet the non-residency test, the foreign offshore procedures carry no penalty. The 5 per cent miscellaneous offshore penalty belongs to the separate domestic version for US residents.

The Internal Revenue Manual states that a penalty will not be asserted for an account where the failure was not wilful, was due to reasonable cause and the account was properly reported on the late FBAR.

When we rebuild an account list, we do not start from the accounts the client remembers. We ask each institution for a schedule of every account held during the period, open or closed. Nil accounts surface that way and almost never from memory. Records supporting the FBAR must generally be kept for five years from its due date, which for an overdrawn account means keeping the statements that prove it never went into credit.

What are the penalties for leaving off an account with nothing in it?

The civil penalty framework does not scale neatly with the size of the omitted account, which is why a nil account is not a trivial omission. For a non-wilful violation the statute sets a maximum of $10,000, adjusted for inflation. The adjusted figures are published in the table at 31 CFR 1010.821, at https://www.ecfr.gov/current/title-31/section-1010.821. When we checked that table in October 2026 it showed, for penalties assessed on or after 17 January 2025, a non-wilful maximum of $16,536. The amounts are adjusted periodically, so the current table should be checked before relying on any figure.

After Bittner v. United States, decided by the Supreme Court on 28 February 2023 and available at https://www.supremecourt.gov/opinions/22pdf/21-1195_h3ci.pdf, the non-wilful maximum accrues per report and not per account. For a filer with many small UK accounts that is a significant protection: omitting three empty accounts from one year's FBAR is one deficient report, not three violations. It is not a reason to leave the report deficient: the reasonable cause exception depends on an accurate late or amended report having been filed.

Wilful violations are measured differently, and here the nil account produces a counter-intuitive result. The same table showed a wilful maximum of the greater of $165,353 or 50 per cent of the balance in the account at the time of the violation. Because the fixed amount is the alternative to the percentage, an empty account does not produce an empty penalty. The Internal Revenue Manual says so directly: for an account that had a zero balance on the violation date, each account holder can be liable for the fixed amount prescribed in the regulation, subject to an overall cap by reference to the highest aggregate balance of the accounts involved. Wilfulness is well outside the ordinary case of an overlooked overdraft, but it explains why we treat no account as too small to list.

What does this mean for UK tax and HMRC?

Nothing in the FBAR changes a UK tax liability. It is a US Treasury information report, it is not filed with HMRC, and it creates no tax in either country.

The UK-side point is consistency. Accounts that are nil at the year end were often in credit earlier in the year, and credit balances earn interest. GOV.UK explains at https://www.gov.uk/apply-tax-free-interest-on-savings that after 5 April each year banks and building societies tell HMRC about the interest they paid, and that interest on a joint account is split equally between the holders unless HMRC is told otherwise. The same interest belongs on the US return, where Schedule B to Form 1040 asks whether the taxpayer had a financial interest in or signature authority over a foreign account (the form and its instructions are at https://www.irs.gov/forms-pubs/about-schedule-b-form-1040). An FBAR that lists five accounts, a US return that shows interest from three and a UK return that shows interest from four invites questions that a complete account list would have avoided. The UK tax year and the FBAR calendar year do not match, so the reconciliation has to be done on actual dates.