So I just spoke to my US accountant, and since the money was in a joint account with another UK relative until last year to make managing it easier he thinks we can make a good case for not having reported it till this year because I was just a signatory on the account rather than claiming it was mine.
That should get me out of the US hole, I'll put it on the 2012 returns. Not sure about the UK one yet though
For now, let's confine this to the US/IRS. As you describe the situation, it sounds as if your accountant is intending to include the interest starting with 2012 filing and ignore past years. Is this correct? If so, you need to be aware of all consequences of this method. Has your accountant informed you of these? The words "he thinks we can make a good case " causes concern. When is he intending on making this case?
Assuming you have been filing US returns for the past few years, and you were resident in the US, there may be several issues you need to discuss with your accountant. If the interest is £8,100, my guess would be that the amount in the Building Society is over $100,000 (roughly £65,000). Were you filing jointly with your wife? Being required to file a US return plus having over $100,000 (Joint return with wife) in a foreign bank account raises two issues. First, from 2011 onwards, you should have completed Form 8938 if the account was over roughly £65,000. Second, for as long as the funds were in the UK account, you should have been filing an FBAR with the US Treasury Dept. For both of these, the fact that it was a joint account with someone in the UK has no bearing. You had signature authority over a foreign account, and it is the total assets in the account which you would declare, not half.
You may wish to seek a second opinion with another accountant who is perhaps more fully aware of the issues surrounding ownership of a foreign bank account.
