For a US person living in the UK, the cautious answer is yes. An app-based multi-currency account held with an entity outside the United States is treated as a foreign financial account and reported on the FBAR, the report filed with FinCEN and not with the IRS. We have found no FinCEN statement that names e-money institutions, so this is a reading of the definition and not a published ruling.
This post is for US citizens and green card holders in the UK who keep balances in an account of this kind. Wise and Revolut appear in the title because those are the names people search for, and the reasoning applies to any similar account. It extends our guide to FBAR and FATCA for UK residents: the definition, the entity that holds the account, dollar balances, multi-currency valuation, Form 8938, and interest, funds and crypto.
Are Wise and Revolut accounts reportable on the FBAR?
Generally yes, where the account is held with an entity outside the United States and your foreign accounts together cross the threshold. We then report it on FinCEN Form 114 with your bank accounts. Where a US entity maintains the account in the United States, it is not a foreign account and is left off.
We make no statement here about how any provider is organised or which of its entities holds a particular customer's money. That differs between customers and can change, and your own statements and terms are the evidence. The answer for any account comes from the questions below.
The report itself is electronic, goes through FinCEN's BSA E-Filing System and is not attached to the tax return. It is due 15 April, extended automatically to 15 October. FinCEN's page on reporting foreign bank and financial accounts (opens the official FinCEN page in a new tab) links to the filing system and the line-by-line instructions.
- Whether the arrangement is a financial account within the FBAR definition
- Whether the account is located outside the United States, which follows the entity or branch that maintains it
- Whether you own it or can operate it, alone or with someone else
- Whether the highest values of all your foreign accounts, added together, exceeded the threshold at any time in the calendar year
Is an e-money account a financial account for FBAR purposes?
On a cautious reading, yes. The FBAR regulation covers bank accounts, securities accounts and other financial accounts, and the last group includes an account with a person in the business of accepting deposits as a financial agency. FinCEN's instructions add any account maintained with a financial institution or with another person performing the services of a financial institution.
That wording is wide. Some app-based accounts are with banks, and a bank account is plainly covered. Others are with e-money institutions. There the question is whether a firm that holds a balance for you, pays it away on your instruction and receives payments in your name falls within the wider limbs.
We have looked for a statement on the point in the regulation, the form instructions and the IRS FBAR guidance (opens the official IRS page in a new tab) and reference guide, and found none that mentions e-money. Our practice is to report. The instructions describe the definition as not limited to the listed account types, and listing an account that turns out to be outside the rule costs nothing, because no tax is calculated on the report. Leaving off an account that is within the rule is a reporting failure.
Does a US dollar balance or US account details make it a US account?
No. A foreign financial account is one located outside the United States, and the location is that of the institution or branch that maintains it. The currency of the balance, the nationality of the holder and the home country of the provider's parent company do not decide the question.
FinCEN's instructions give the examples. An account with a branch of a US bank that is physically outside the United States is foreign, and an account with a US branch of a foreign bank is not. So a dollar balance inside an account maintained in the UK is part of a foreign account, and a sterling or euro balance inside an account maintained by a US entity in the United States is not. Receiving details for another country show how money can be paid in. They do not, by themselves, show who maintains your account.
International providers commonly deal with customers through different legal entities in different countries. A UK resident's account is typically with a UK or European entity and a US resident's with a US one, but do not assume it. Someone who has moved country may still be with the entity they first joined. These are the places to look.
- The legal entity named on your statements and in the terms you accepted
- The address given for that entity
- The regulator the terms say supervises it
- Any notice telling you that your account has moved to a different entity
How do you report a multi-currency account on the FBAR?
Each account is reported at its maximum value for the calendar year, found in the currency of the account and converted to dollars at the Treasury rate for the last day of that year. The instructions do not say how to treat several currency balances inside a single account, so a cautious method is needed.
Ours is to treat the arrangement as one account where the provider gives you one customer relationship under one agreement. We value each currency balance at its own year-end rate from the Treasury Reporting Rates of Exchange (opens the official US Treasury page in a new tab) and take the highest combined figure the statements show. Where the combined peak cannot be identified, adding together each currency's own highest balance overstates the value, and an overstatement has no cost. Dollar balances need no conversion. What matters is that no balance is left out. Our post on the FBAR maximum value and exchange rate covers rounding and the rate tables.
The form asks for the name and address of the financial institution, which we take to be the entity that holds the account and not the brand name alone, and for the account number or other designation. The account type is bank, securities or other with a short description. For an account with an e-money institution that is not a bank, we select other and describe it.
Take a US citizen employed in Bristol who keeps small sterling and euro balances in an app-based account for travel. She moves her US savings across for a house deposit, and the dollars sit in the account for a week before she converts them and pays her solicitor. The maximum value is the combined balance on the highest day of that week. It takes her over the threshold, so she files and lists this account, her current account and her cash ISA.
Do money passing through and closed accounts count?
Yes to both. The threshold is an aggregate: the highest values of every foreign account are added together, and an FBAR is due if the total exceeded $10,000 at any time in the calendar year. Money that rested in an account for a day counts, and an account closed during the year is still reported for that year.
App-based accounts are often used to convert large sums: a house deposit, sale proceeds or an inheritance. The maximum value is the highest figure, not the year-end balance and not an average. Each account is valued separately, so the same money is counted again in the bank account it lands in next. Nothing is taxed on the total.
The duty to report exists for each year in which you hold the account. An account closed part-way through is reported at its highest value while it was open, converted at the year-end rate. Download the statements before closing, because access may end with the account. Once the threshold is crossed, every foreign account is listed, including those with small balances.
Where earlier years were missed, non-wilful penalties apply per report and not per account, following Bittner v. United States, and whether any penalty is charged depends on the facts. Our post on late FBARs explains how missed reports are filed.
Do e-money accounts go on Form 8938 as well?
Only at higher values. Form 8938 covers financial accounts maintained by a foreign financial institution, and a person living abroad and not filing jointly files it when specified foreign financial assets exceed $200,000 at year end or $300,000 at any time. On the cautious reading, an e-money account with a non-US entity counts towards that total.
The IRS comparison of Form 8938 and FBAR requirements (opens the official IRS page in a new tab) lists deposit and custodial accounts at foreign financial institutions as reportable on both. The Form 8938 instructions describe a foreign financial institution, in most cases, as a financial institution that is not a US entity and that, among other things, accepts deposits in the ordinary course of a banking or similar business. E-money is not mentioned there either, and we include these accounts. Joint filers abroad file above $400,000 at year end or $600,000 at any time.
Two limits apply. The IRS page Do I need to file Form 8938 (opens the official IRS page in a new tab) says the form is not required in a year when no income tax return is required, and that accounts maintained by a US payer, such as a US financial institution, are not reported on it. Form 8938 travels with the tax return and the FBAR does not, and filing one never satisfies the other, as our article on the FBAR or Form 8938 explains.
What about interest, savings features and crypto in the app?
Reporting an account and taxing what it earns are separate matters. Interest credited to a balance is income on Form 1040 whichever country the account is in. A savings feature that places money in a fund, or a crypto holding in the same app, raises its own questions.
For a savings or money market feature, check the product documents for whether your money is on deposit or in a fund. Funds organised outside the US are commonly PFICs, which can bring Form 8621 and the regime described in the Form 8621 instructions (opens the official IRS page in a new tab). Shares in a non-US fund open to the public can also be a reportable account in their own right. Our PFIC reporting service deals with holdings of this kind.
On crypto, FinCEN Notice 2020-2 says a foreign account holding only virtual currency is not currently reportable on the FBAR, and that FinCEN intends to propose a change. The regulation as published today has not been amended. An account that also holds cash is reportable because of the cash. Gains are taxable whatever the FBAR position, as the IRS digital assets page (opens the official IRS page in a new tab) sets out, and our crypto tax service covers them.
None of this changes whether the account itself is listed. Our foreign income and FBAR reporting service prepares the report with the tax return from one schedule of accounts, and the guide to FBAR and FATCA for UK residents covers bank accounts, ISAs and pensions.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
