FBAR

FBAR applies if at any one point in time your UK financial assets cross the $10,000 mark. So if my in-country bank balance never hits the equivalent of $10K on any one day, I do not need to file to comply with FBAR.  (That is, it's any one day vs the accumulated aggregate in a calendar year.) Correct?

FBAR applies if at any one point in time your UK financial assets cross the $10,000 mark. So if my in-country bank balance never hits the equivalent of $10K on any one day, I do not need to file to comply with FBAR.  (That is, it's any one day vs the accumulated aggregate in a calendar year.) Correct?

Take all your non US accounts. Find out the highest balance that each of them reached at any point during the year. Write those numbers down and then add them up.
If the total is over $10,000 then you need to file an FBAR.

Could you be cheeky and have any money of that value in your partner's account as long as it's not a joint account?

Not that I anticipate ever having that level of money in my account at any time in the foreseeable future, but just wondering if that is technically wrong or fine.

Take all your non US accounts. Find out the highest balance that each of them reached at any point during the year. Write those numbers down and then add them up.
If the total is over $10,000 then you need to file an FBAR.

Is that correct?  So... hypothetically, if I have the equivalent balance of $5,950 at HSBC and $50 at Lloyd's from January 1 to June 30, then on July 1, I close my HSBC account and move that balance to Lloyd's, then the highest balance I'd have had at HSBC for the year was $5950, and the highest balance I'd have at Lloyd's for the year was $6000, for an apparent total of $11,950.  But at no time did I ever actually have more than $6000 to my name.  Is that how it's done?

I have always thought it was the highest aggregate value on a day.  So each day, you would add up the balances of all your foreign accounts, and if their combined value on any one day was $10,000+, then you trigger FBAR.

For me, this has historically been a non-issue, as the only time I have had to worry about it before now was when I transferred my US savings to the UK last year for our down payment on our house.  But since I've been saving in the UK, generally, and then added a separate savings account for my visa, I will be triggering a FBAR filing again this year and probably every year going forward (yay!  I'm a grown-up with grown-up money!).  I need to know this!   

Is that correct?  So... hypothetically, if I have the equivalent balance of $5,950 at HSBC and $50 at Lloyd's from January 1 to June 30, then on July 1, I close my HSBC account and move that balance to Lloyd's, then the highest balance I'd have had at HSBC for the year was $5950, and the highest balance I'd have at Lloyd's for the year was $6000, for an apparent total of $11,950.  But at no time did I ever actually have more than $6000 to my name.  Is that how it's done?

I have always thought it was the highest aggregate value on a day.  So each day, you would add up the balances of all your foreign accounts, and if their combined value on any one day was $10,000+, then you trigger FBAR.

For me, this has historically been a non-issue, as the only time I have had to worry about it before now was when I transferred my US savings to the UK last year for our down payment on our house.  But since I've been saving in the UK, generally, and then added a separate savings account for my visa, I will be triggering a FBAR filing again this year and probably every year going forward (yay!  I'm a grown-up with grown-up money!).  I need to know this!   

It's the first scenario, yes. You can end up looking like you have way more money than you actually do.

It's the first scenario, yes. You can end up looking like you have way more money than you actually do.

Wow.  I'm so glad I only had one UK account before last year.  I could've been out of compliance and not even realized it if I'd had multiple accounts and moved money around.

Take all your non US accounts. Find out the highest balance that each of them reached at any point during the year. Write those numbers down and then add them up.
If the total is over $10,000 then you need to file an FBAR.

I agree.

You may end up appearing to have much more money than you actually possess, but hey, I thought over stating was the American way (or at least it was before the credit crunch).

Wow.  I'm so glad I only had one UK account before last year.  I could've been out of compliance and not even realized it if I'd had multiple accounts and moved money around.

I like to chase the best interest rates so move money around a lot.  I always looked in great shape on my FBAR! 

Could you be cheeky and have any money of that value in your partner's account as long as it's not a joint account?

Yes, you may do that.

Technically, for the IRS, it may qualify as money laundering, but what's a few hundred quid between friends.

Seriously, small amounts between spouses is not going to cause a stir. Some (including me) object to listing all our accounts in one convenient package and putting it out over the internet, but actually, for those with few accounts, filing an FBAR online is not overly time consuming. Beyond a few, including joint and signatory, it gets to be annoying.

I like to chase the best interest rates so move money around a lot.  I always looked in great shape on my FBAR! 

I can identify with that.

Form 8938 has tick the boxes which indicate if an account was closed during the year. The aggregate number at the top of the form looks quite impressive, but if you subtract all the accounts closed during the year, the red flag may go away.

Form 8938 has tick the boxes which indicate if an account was closed during the year. The aggregate number at the top of the form looks quite impressive, but if you subtract all the accounts closed during the year, the red flag may go away.

The limits for the 8938 were so high for a married couple that we have never had to file those forms yet. However in 2017 we moved a lump sum of money over in January to our UK checking account then put it in a savings account for a few weeks until the house purchase  was completed then it was paid out. The actual sum of all the accounts on any day never exceeded the maximum but if the daily max shown on each account are added up it appears to be twice as much as we had, and that does exceed the 8938 max limit of $400,000. 

Does it look like I'll have to file 8938 next year?

The limits for the 8938 were so high for a married couple that we have never had to file those forms yet. However in 2017 we moved a lump sum of money over in January to our UK checking account then put it in a savings account for a few weeks until the house purchase  was completed then it was paid out. The actual sum of all the accounts on any day never exceeded the maximum but if the daily max shown on each account are added up it appears to be twice as much as we had, and that does exceed the 8938 max limit of $400,000. 

Does it look like I'll have to file 8938 next year?

For 2017, Form 8938 requires the aggregate value of all foreign accounts as they will stand on 31 December 2017. You also have to include the value of your UK pensions in that calculation.

I'm guessing you will continue to file Married Jointly.

So for you, on 31 Dec., the amount is $400,000. There is also an additional requirement which states if, during the year, (and for MFJ) the aggregate amount (highest max. value of each account during the year added together) exceeded $600,000 Form 8938 must be filed. So a calculation of the highest  value of each account, including the January highest values, might be wise.

What will be reported by your UK bank or building society for FATCA compliance (the IGA) will be the 31 Dec. balance, and who knows what exchange rate they will use.

Thanks OAP, guess I’ll be filing 8938 next year.

Thanks OAP, guess I’ll be filing 8938 next year.

Welcome to the happy group.

The 8938 instructions are vague, but most play it safe and report.

For the amount (married filing joint, resident abroad):
"Married taxpayers filing a joint income tax return. If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year." [bold mine]

Further along, the following is stated:
"Reporting Maximum Value
You must report the maximum value during the tax year of each specified foreign financial asset reported on Form 8938." [bold mine]

https://www.irs.gov/pub/irs-pdf/i8938.pdf

What they really want are the account locations and numbers. The value is of less importance unless it is high (subjective). You've volunteered information for valuing future inheritance tax claims, etc.

(IMHO)   The Manafort/Gates indictment listed 6 counts of FBAR violations (out of a total of 12 counts) and one additional of tax fraud. The additional mentioned Schedule B (Part III questions), but said nothing about 8939.

FBAR (part of Title 31) violations can carry both a criminal penalty and varying monetary penalties. Form 8938 (Title 26) carries a $10,000 penalty for failure to file. One can only guess the IRS has a selection to pick from and will use those violations which give them the best case in court.

I think I will definitely file form 8938 next year to be safe rather than risk mis-interpreting the limit definitions.

Thanks for helping me come to this decision.