Who counts as a US person for the FBAR

What does FinCEN mean by a United States person

FinCEN's filing instructions list four groups: US citizens, including minor children; US residents; entities such as corporations, partnerships and limited liability companies created or organised in the United States or under its laws; and trusts or estates formed under US law. Anyone in one of those groups can owe an FBAR.

The definition is not a tax test, even though it borrows from tax law. The IRS Internal Revenue Manual on the FBAR (opens the official IRS page in a new tab) says the federal tax treatment of a person does not decide whether that person must file. Someone who owes no US tax, files no return, or is treated as a non-resident for some income tax purpose can still be a US person here. The FBAR comes from the Bank Secrecy Act, and it draws its own boundaries.

For this purpose the United States includes the states, the District of Columbia, the US territories and possessions, such as Puerto Rico and Guam, and certain Indian lands. A company formed under the law of any of those places is a US entity. Our page on FinCEN Form 114 covers the report itself once you know you are inside the definition.

• US citizens, wherever they live and whatever other passports they hold
• US residents under the green card test or the substantial presence test
• Corporations, partnerships and LLCs created or organised under US law
• Trusts and estates formed under US law

Are dual nationals and Americans born abroad US persons

Yes, if they are US citizens. Citizenship does not depend on where you live, how long you have been away, or whether you have ever held a US passport. A dual British and American national living in Bristol is a US person for the FBAR in exactly the way a recent arrival from Chicago is.

The IRS manual makes the point directly: citizenship is not defined by residence, and a citizen can live abroad all their life. Never having filed does not change that.

A child born outside the United States to an American parent can be a US citizen from birth, but not automatically in every case. Whether citizenship passed at birth depends on the rules in force at the date of birth, including how long the American parent had been physically present in the US beforehand. That is a question of nationality law, and it needs an answer before the FBAR question can be settled. People born in the US and raised entirely in Britain are covered in our post on accidental Americans in the UK.

When does a green card holder in the UK stop being a US person

Not when they leave the US, and not when the card expires. A lawful permanent resident is a US resident under the green card test, and therefore a US person for the FBAR, until the status is formally given up in writing or terminated by the immigration authorities or a federal court.

The IRS page on the green card test (opens the official IRS page in a new tab) lists three ways the status ends: you voluntarily renounce and abandon it in writing to USCIS, USCIS terminates it administratively, or a federal court terminates it judicially. The IRS manual adds that the green card test can make someone a US resident for FBAR purposes while they live outside the United States. An expired card in a drawer in Leeds has ended nothing.

The year the status ends needs care. The manual says the special first-year and last-year rules in the residence provisions of the tax code apply to the FBAR, so residence can stop part way through a year. Whether that removes the FBAR for the final year depends on the dates and the facts, and we review it before deciding not to file. Our post on a green card that expired while living in the UK explains the abandonment process, and our expatriation service covers the exit filings that can follow.

Can a British person become a US person by spending time there

Yes. A British national with no green card is a US resident for any year in which they meet the substantial presence test: at least 31 days in the US in the current year and 183 days on the weighted three-year count. Meeting the test makes them a US person for that year's FBAR.

The FinCEN instructions tell filers to apply the residency tests in section 7701(b) of the tax code, using the FBAR's own definition of the United States. The substantial presence test (opens the official IRS page in a new tab) has carve-outs that matter here. Days in transit for under 24 hours between two places outside the US are excluded, as are days as an exempt individual, such as certain students, teachers and diplomats, and days a medical condition prevented departure. The closer connection exception is a separate route out of resident status, and whether it applies turns on the facts.

Take a British engineer employed in Manchester who spends long stretches on a project in Texas. If her days in one calendar year meet the test, she is a US resident for that year. Her UK current account, savings, ISA and workplace pension are then foreign accounts, and if their combined highest values pass the threshold she files an FBAR for that year. The IRS manual (opens the official IRS page in a new tab) adds that an election to be treated as a resident in order to file jointly with a US spouse is ignored for the FBAR, so that election alone does not create the obligation. Our page on the substantial presence test walks through the count.

Does a treaty tie-breaker claim remove the FBAR

No. The IRS manual states that tax treaty provisions do not change residence for FBAR purposes where one of the tax-code tests is met. A green card holder or a substantial presence resident who claims to be a UK resident under the treaty for income tax still counts as a US person for the FBAR.

The tie-breaker in the US-UK treaty decides which country may tax someone as a resident when both domestic laws claim them. Publication 519 (opens the official IRS page in a new tab) says a dual-resident taxpayer who claims treaty benefits files Form 1040-NR with Form 8833 (opens the official IRS page in a new tab) attached, and our page on Form 8833 explains the disclosure. None of that reaches the FBAR, because the FBAR is not an income tax rule and the treaty does not govern it.

This is a common point of confusion for long-stay visitors and for green card holders who settled back in Britain. The income tax return may show non-resident status, while the FBAR is still due in full for the same year. The treaty claim has wider consequences too. Publication 519 warns that being treated as a non-resident under a tie-breaker rule can trigger the expatriation tax for a long-term green card holder, which is a separate question to take advice on before the claim is made.

Do children and US companies owned by Britons file

Both can. A child who is a US citizen is a US person from birth, with an FBAR of their own if their accounts pass the threshold. A company formed under US law is a US person even when every owner is British, and it files an FBAR if its own foreign accounts pass the threshold.

FinCEN's instructions say a child is generally responsible for their own FBAR, and where the child cannot file, for example because of age, a parent, guardian or other legally responsible person files it for them. The parent signs and enters Parent/Guardian filing for child as the filer title. A parent who can operate those accounts may also need to list them on their own FBAR on the basis of signature authority.

A US limited liability company owned by a British resident is a US entity, whatever its tax treatment. The IRS describes a single-member LLC (opens the official IRS page in a new tab) as disregarded from its owner by default, but FinCEN's instructions say an entity disregarded for tax purposes must still file an FBAR if otherwise required. If the LLC holds a UK bank account, that account is foreign to it. The British owner, if not a US person, has no FBAR of their own. Our post on the British owner of a Delaware LLC covers the other US filings such a company brings.

• US citizen child with UK accounts: the child's own FBAR, filed and signed by a parent
• US parent able to operate a child's account: possibly listed on the parent's FBAR too
• US LLC with a UK bank account: the LLC files, even if disregarded for tax
• British owner of that LLC who is not a US person: no personal FBAR
• Trust or estate formed under US law with UK accounts: a US person in its own right

What should you do if you are unsure

Settle the status question first, then the accounts. Work out whether you are a citizen, whether a green card is still in force, and how many days you spent in the US in each calendar year. Once you know you are a US person for a year, the accounts test follows.

For a person who is a US person, the next steps are those set out in our guide: add the highest value of each foreign account for the calendar year, compare the total with $10,000, and file by 15 April, extended automatically to 15 October through FinCEN's system if the total is over. The IRS FBAR page (opens the official IRS page in a new tab) confirms that citizens, residents, corporations, partnerships, LLCs, trusts and estates are all covered. Our foreign income and FBAR reporting service prepares the report, and our individual tax return preparation keeps it consistent with the Form 1040.

Where status was misunderstood for several years, the missed FBARs and any missed returns are corrected together, and the route depends on the facts and on whether the failure was non-wilful. Our guide to FBAR and FATCA for UK residents sets out those routes.