Can UK civil partners file a joint US tax return under the Streamlined Foreign Offshore Procedures?

No. Revenue Ruling 2013-17 holds that a civil union or similar formal relationship not denominated as a marriage is not a marriage for federal tax purposes, and the IRS confirms such partners cannot use a married filing jointly or married filing separately status. Each US civil partner files as single or head of household and makes a separate streamlined submission with their own Form 14653.

Does a US citizen report the whole of a joint UK bank account held with a non-US partner?

Yes, for disclosure purposes. FinCEN's FBAR instructions require each joint owner to report the entire value of the account, and the Form 8938 instructions require the entire value of an asset jointly owned with a non-spouse to be counted towards the threshold. The income tax return is different: only the US partner's beneficially owned share of the interest is reported as their income.

Can I claim head of household if I live with my unmarried partner in the UK?

Only if you have a qualifying person other than your partner. The IRS states a partner is never a qualifying person for head of household, and someone who is a qualifying relative only by living in your household does not count either. You must also personally pay more than half the cost of keeping up the home. Your own US citizen child living with you is the usual qualifying route.

How does HMRC tax joint account interest for unmarried couples compared with civil partners?

HMRC's guidance at SAIM2420 says spouses and civil partners living together are normally each taxed on half of joint account interest under section 836 of the Income Tax Act 2007, unless they declare unequal shares. Other joint holders, including cohabiting couples, are taxed on the interest to which each is actually entitled, which follows beneficial ownership and, where intention is unclear, their respective contributions.

If we convert our civil partnership to a marriage, does our US filing status change?

Yes. A converted civil partnership is a marriage, so the couple are spouses for US federal tax purposes and must use a married filing status going forward. GOV.UK notes that the marriage certificate is dated when the civil partnership was formed. We have not found IRS guidance on whether that affects earlier US tax years, so the status for each year in a catch-up submission should be analysed individually.

Is there a penalty under the Streamlined Foreign Offshore Procedures for unmarried partners?

No. A taxpayer who meets the non-residency requirement, certifies non-wilful conduct on Form 14653 and files three years of returns and six years of FBARs pays the tax due and statutory interest only. The IRS states that failure-to-file, failure-to-pay, accuracy-related, information return and FBAR penalties will not apply, unless a later examination finds fraud or a wilful FBAR violation. Each unmarried US partner qualifies separately.

Streamlined Foreign Offshore: Unmarried & Civil Partners

The IRS Streamlined Foreign Offshore Procedure (SFOP) is open to a US citizen living in the UK with a partner they have not married, but the Streamlined Foreign Offshore submission is always made by the individual, never by the couple. A cohabiting partner or a UK registered civil partner is not a spouse for US federal tax purposes, so there is no joint return, no joint certification and no election to bring a non-US partner into the US system. Each US partner files three years of returns as single or, where the conditions are met, head of household, files six years of FBARs, signs their own Form 14653 and pays the tax and interest due, with no penalty.

That short answer hides most of the work. The household's finances are held jointly while the US filing obligation is held individually, and the UK and the US disagree about what the relationship is. This guide sets out how the procedure applies to cohabiting couples and civil partners, how joint UK accounts and jointly owned rental property are reported, and where the two countries' rules pull apart.

What is the IRS Streamlined Foreign Offshore Procedure (SFOP)?

The Streamlined Foreign Offshore Procedures are the IRS route for US taxpayers living outside the United States who have failed to file returns, report income from foreign financial assets or file FBARs, and whose failure was non-wilful. The IRS sets the terms out at https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-states. Non-wilful conduct is defined there as conduct due to negligence, inadvertence or mistake, or conduct that is the result of a good faith misunderstanding of the requirements of the law. A complete submission contains the following.

Delinquent or amended US income tax returns, with all required information returns such as Form 8938 and Form 5471, for the most recent three years for which the due date has passed.
Delinquent FBARs for the most recent six years for which the due date has passed, filed electronically through FinCEN's BSA E-Filing System.
Form 14653, the signed certification that the taxpayer meets the non-residency requirement and that the failures resulted from non-wilful conduct, including a narrative of the specific facts.
Payment of all tax shown on the returns together with statutory interest.
The words Streamlined Foreign Offshore written in red at the top of the first page of each return, and a valid taxpayer identification number.

In return, the IRS states that a taxpayer who complies with the procedure will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties or FBAR penalties. The foreign procedure carries no offshore penalty at all. The five per cent miscellaneous offshore penalty that readers sometimes see quoted belongs to the separate Streamlined Domestic Offshore Procedures for US residents. The protection is not unconditional: returns can still be selected for examination, and penalties can follow if the original non-compliance is found to be fraudulent or the FBAR violation wilful.

The non-residency requirement for a US citizen or green card holder is that, in at least one of the most recent three years for which the return due date has passed, the individual did not have a US abode and was physically outside the United States for at least 330 full days. The IRS adds one sentence that matters for this article: for joint return filers, both spouses must meet the applicable non-residency requirement. An unmarried couple is not a joint return filer, so the test is applied to each US partner alone.

Does the IRS treat a UK civil partnership as a marriage?

No. For federal tax purposes a registered civil partnership that is not called a marriage under the law of the place where it was formed is not a marriage, and the partners are not spouses. This is the single most important point for civil partners, because it runs against everything they experience in the UK.

The source is Revenue Ruling 2013-17, published at https://www.irs.gov/pub/irs-drop/rr-13-17.pdf. Its third holding states that the terms spouse, husband and wife do not include individuals, whether of the opposite sex or the same sex, who have entered into a registered domestic partnership, civil union or other similar formal relationship recognised under state law that is not denominated as a marriage under the laws of that state, and that the term marriage does not include such relationships. The ruling defines state, for its purposes, as any domestic or foreign jurisdiction having the legal authority to sanction marriages, which is why the holding reaches a civil partnership registered in England, Wales, Scotland or Northern Ireland.

The IRS repeats the position in plain terms on its page of answers for registered domestic partners and individuals in civil unions at https://www.irs.gov/newsroom/answers-to-frequently-asked-questions-for-registered-domestic-partners-and-individuals-in-civil-unions. That page says such partners are not married for federal tax purposes and may not file a federal return using a married filing jointly or married filing separately status. Publication 501 at https://www.irs.gov/publications/p501 carries the same statement in its discussion of marital status.

What if the civil partnership has been converted into a marriage?

A civil partnership that has been converted into a marriage is a marriage, and from that point the couple are spouses for US federal tax purposes. GOV.UK explains the conversion process at https://www.gov.uk/convert-civil-partnership. In England and Wales a same-sex civil partnership can be converted, an opposite-sex civil partnership cannot, and no civil partnership can be converted in Northern Ireland; Scotland has its own rules. The same page notes that the couple receive a marriage certificate dated when the civil partnership was formed.

That backdated certificate raises a question we are asked regularly in catch-up work: does the conversion change the US filing status for the earlier years being filed under the procedure? We have not found IRS guidance that addresses a UK conversion directly, and we do not assume the answer. In a Streamlined Foreign Offshore submission the filing status on each of the three returns has to be defensible on its own facts, so a converted couple should have the point analysed and documented before any return is prepared. Once the couple are married going forward, the questions change to joint or separate returns and the treatment of a non-US spouse, which we cover in our separate guides for married couples.

Which filing status does each partner use: single or head of household?

Each US partner files as single unless they personally qualify as head of household. Married filing jointly and married filing separately are both unavailable. Two consequences follow straight away. First, the election that lets a US citizen treat a non-US spouse as a US resident and file a joint return is an election for married couples, so it is not available to cohabitants or civil partners. Second, the non-US partner has no US return, no ITIN requirement arising from the relationship, and no place on the US partner's Form 1040.

Head of household is where we see the most errors. Publication 501 sets three conditions: the taxpayer is unmarried or considered unmarried on the last day of the year, the taxpayer paid more than half the cost of keeping up a home for the year, and a qualifying person lived with the taxpayer in the home for more than half the year. For an unmarried couple with children, the points to test are these.

The partner is never the qualifying person. The IRS states that a registered domestic partner is not one of the specified related individuals who can qualify a taxpayer for head of household status, even if the partner is the taxpayer's dependent.
A person who is a qualifying relative only because they lived with the taxpayer all year as a member of the household is not a qualifying person. A partner's child from an earlier relationship is not a stepchild of the US partner without a marriage, and usually falls into this category.
A dependant must be a US citizen, US resident alien or US national, or a resident of Canada or Mexico. A UK-resident partner or child who is not a US citizen generally fails this test, which removes both the dependency claim and the head of household route built on it.
The US partner must personally pay more than half of the cost of keeping up the home. In a household where two high earners split the mortgage and bills evenly, neither meets the test, and where the non-US partner pays most of them the US partner does not.
The publication's rule that a taxpayer with a nonresident alien spouse can be considered unmarried is a rule for married people. It has no role for civil partners, who are already unmarried for US purposes.

In practice the US partner's own US citizen child living in the home is the usual route to head of household, provided the cost test is met with evidence. Where two US citizen partners share a home and a child, only one of them can claim the child as a qualifying person for a given year.

How do two US partners make a Streamlined Foreign Offshore submission?

Where both partners are US citizens or green card holders, there are two submissions, not one. Married couples filing jointly can sign a single joint certification; unmarried partners cannot. Each partner needs the following in their own right.

Their own three years of Forms 1040 or 1040-X, each marked in red and each reporting their own share of the household's income.
Their own Form 14653, with a narrative written from their own facts. Two people who share a home do not necessarily share a history: one may have left the United States as a child and the other at thirty after years of filing.
Their own non-residency test. One partner travelling to New York for work can fail the 330-day test in a year in which the other passes, so each partner must have at least one qualifying year of their own.
Their own six years of FBARs, and their own Form 8938 where the threshold is met.
Their own payment of tax and interest, computed on their own return.

The two submissions must still agree with each other. If one partner reports half of the rent from a jointly owned flat and the other reports a third, the IRS is looking at two certified returns that cannot both be right. We prepare both sets of returns from a single reconciliation of the joint accounts and jointly owned assets. If only one partner is non-wilful, or only one meets the non-residency test, the other needs a different route, and that should be established before either submission is posted.

How is a joint UK account with a non-US partner reported on the FBAR and Form 8938?

The US partner reports the whole account, not half of it. This is the point most often misunderstood by couples who hold everything jointly, and it is the reason a partner with modest savings of their own can still be well over the reporting thresholds.

An FBAR is required where a US person has a financial interest in or signature authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time in the calendar year, as the IRS explains at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar. FinCEN's line item filing instructions for the form, available from https://www.fincen.gov, state that each joint owner must report the entire value of the account, and ask for the number of joint owners and the identifying details of the principal joint owner. A non-US partner's name and address therefore appear on the US partner's FBAR, with the taxpayer identification number left blank where there is none. The non-US partner has no FBAR obligation of their own.

The exception that lets one spouse file a single FBAR covering accounts jointly owned with the other, supported by a signed Form 114a, is written for spouses. Two unmarried US partners with a joint account each file their own FBAR, and each reports the full maximum value. Late FBARs within a streamlined submission are filed electronically through the BSA E-Filing System at https://bsaefiling.fincen.gov.

Form 8938 works the same way for this purpose. The instructions at https://www.irs.gov/instructions/i8938 set the threshold for an unmarried specified individual living abroad at specified foreign financial assets of more than $200,000 on the last day of the tax year or more than $300,000 at any time during it. Where an asset is owned jointly with someone other than a spouse, or with a spouse who is not a specified individual, each joint owner includes the entire value of the asset in working out whether the threshold is met. A US partner whose only substantial asset is a joint savings account funded largely by a non-US partner can therefore have a Form 8938 requirement, and its omission is one of the information return failures the procedure is designed to cure.

How is joint interest and rental income split between unmarried partners?

Reporting the full balance of an account is not the same as being taxed on all of its income. The asset reports are about disclosure; the income tax return is about whose income it is. For unmarried partners the starting point in both countries is ownership, and that is where the UK draws a sharp line between cohabitants and civil partners.

For UK income tax, HMRC's Savings and Investment Manual at https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2420 explains that spouses and civil partners who live together are normally each taxable on half of the interest on a joint account under section 836 of the Income Tax Act 2007, unless they elect to be taxed on their actual unequal entitlements, which is done with a Form 17 declaration. Other joint holders are taxed on the interest to which they are actually entitled. HMRC notes that this is usually an equal split because most joint accounts are intended to be jointly owned, but that where there is not enough evidence of that intention the parties are taxed according to the funds each has contributed.

So a cohabiting couple have no automatic fifty-fifty rule and no Form 17. Their split follows beneficial ownership, and the same principle governs jointly owned rental property: the person beneficially entitled to the property is entitled to the income from it. If one partner provided seventy per cent of the purchase price of a buy-to-let flat and the couple hold it in those shares, the rent follows those shares. Civil partners, by contrast, are inside the spousal rule and start from equal shares whatever they each contributed.

The US return also taxes income to the person who owns it, and has no rule deeming an equal split between unmarried co-owners. In a catch-up submission we therefore establish the beneficial shares once, from the conveyance, any declaration of ownership, the account mandates and the history of contributions, and use the same shares on the US returns, the UK returns and the foreign tax credit computations. A mismatch causes real cost: if the UK has taxed a civil partner on half of the income while the US return reports a different share, the UK tax paid and the US income no longer line up, and credit relief can be lost. Transfers of money or assets between unmarried partners also fall outside the rules that apply between spouses in both countries, so any rebalancing of ownership should be reviewed before it is carried out.

How does HMRC treat cohabiting couples and civil partners?

HMRC treats civil partners exactly as it treats spouses, and treats cohabitants as two unconnected individuals. This is the status mismatch at the centre of this article. A civil partner is a spouse-equivalent in every UK tax computation and a single person on every US one. A cohabitant is a single person in both.

Marriage Allowance is the clearest illustration. GOV.UK at https://www.gov.uk/marriage-allowance explains that a person with income below their Personal Allowance can transfer £1,260 of it to a spouse or civil partner who pays tax at the basic rate, reducing that partner's tax by up to £252 in the tax year, and states that the allowance cannot be claimed by people who are living together but are not married or in a civil partnership. For wealthy households the allowance itself is rarely in point, but the principle carries across: cohabitants have no transferable allowances and no deemed equal split. A civil partner's UK returns, by contrast, will show spousal treatment that the US returns cannot mirror, and we reconcile the two in the working papers behind every return.

Worked scenario: a US civil partner in London

The following is an illustration only. The people and figures are invented, and the exchange rate of $1.25 to £1 is an assumption, not a rate published for any year.

Amelia is a US citizen and a managing director at a bank in London. She has lived in the UK for eleven years, has no home in the United States and has never spent more than three weeks a year there. She has never filed a US return or an FBAR because she believed UK tax covered her. Five years ago she registered an opposite-sex civil partnership with Daniel, a British citizen with no US status. They hold a joint savings account whose highest balance last year was £600,000, earning £24,000 of interest, and a rental flat owned in equal beneficial shares producing £30,000 of net rent. Amelia also has accounts and an employer share plan in her sole name.

On the US side, Amelia is unmarried. Her civil partnership is not denominated as a marriage, and as an opposite-sex partnership it cannot be converted in England and Wales. She files as single: Daniel cannot be a qualifying person, and the couple have no children. She makes one Streamlined Foreign Offshore submission in her own name, with three years of Forms 1040, six years of FBARs and her own Form 14653. Daniel files nothing in the United States.

On her FBAR, Amelia reports the joint savings account at its entire maximum value, £600,000, which is $750,000 at the assumed rate, with one joint owner and Daniel's name and address. The same full value counts towards her Form 8938 threshold, which she exceeds comfortably. On her Forms 1040 she reports her half of the interest, £12,000 or $15,000 at the assumed rate, and her half of the net rent as computed under US rules, alongside her employment income. UK tax paid on that income is brought into her foreign tax credit computation.

On the UK side nothing changes: HMRC has treated Amelia and Daniel as spouses throughout, and the equal split under section 836 happens to match their actual equal ownership. Had they been cohabitants who bought the flat seventy per cent with Daniel's funds and held it in those shares, the UK would tax the rent seventy-thirty from the outset, and Amelia's US return would report her thirty per cent.

What mistakes do we see most often in these submissions?

The recurring failures are consistent enough to list. Most are exactly the kind of good faith misunderstanding the procedure exists for, but a submission is a certified statement that the IRS can examine, so each needs correcting before it is signed.

Civil partners filing as married filing jointly or married filing separately because that is how every UK form treats them. Returns already filed on that basis need to be corrected with amended returns inside the submission.
Claiming head of household with the partner, or the partner's child, as the qualifying person.
Reporting half of a joint account's balance on the FBAR and Form 8938 instead of the entire value.
Reporting all of the joint income on the US partner's return, or none of it, instead of the beneficially owned share.
Two US partners sharing one narrative on Form 14653, or assuming that one partner's 330 days cover both.
Leaving the UK and US income splits unreconciled, so that foreign tax credits are claimed on tax the other partner paid.

Preparing the submission

For unmarried couples and civil partners, the order of work matters. We settle US marital status first, including any conversion to marriage and its date. We then fix beneficial ownership of every joint account and jointly owned asset, test each US partner's non-residency and non-wilfulness separately, and only then prepare returns, FBARs and certifications. Our work is tax preparation and compliance: accurate returns, complete disclosure and a certification each partner can sign with confidence.