Form 8938
IRS, Statement of Specified Foreign Financial Assets (FATCA)
The FATCA asset statement attached to the tax return, with higher thresholds for filers who live abroad than for those in the US.
What is Form 8938?
Form 8938 came in with FATCA and asks for foreign financial assets on the tax return itself. It covers foreign accounts and also foreign assets held outside accounts. The thresholds are higher for people living abroad, so many Americans in the UK file an FBAR but not Form 8938.
What FATCA asks for on the return
Specified foreign financial assets include accounts at foreign financial institutions and, outside an account, foreign shares held directly, interests in foreign entities and certain foreign financial contracts.
A filer living abroad who does not file jointly reports once the total exceeds $200,000 at year end or $300,000 at any time. For joint filers abroad the figure is $400,000 at year end or $600,000 at any time. Filers living in the US face much lower thresholds, starting at $50,000 at year end or $75,000 at any time.
The form is attached to Form 1040 and filed with the IRS, so it follows the return's due date and any extension. It is required only from people who must file an income tax return for the year. Each asset is listed with its maximum value, the income it produced and where on the return that income appears. The IRS uses the form to match against information that UK financial institutions report under FATCA.
Failure to file carries an initial penalty of $10,000, with further penalties if the form is still missing after an IRS notice. Omitting a required Form 8938 also keeps the statute of limitations open for the whole return until the form is supplied. An asset reported on another international form, such as Form 8621 or Form 3520, is generally listed on Form 8938 only by reference to that form.
At a glance
- Form 1040, filed with the IRS
- Attached to
- $200,000 at year end or $300,000 at any time
- Threshold abroad, single
- $400,000 at year end or $600,000 at any time
- Threshold abroad, joint
- $10,000 initially, more after IRS notice
- Penalty exposure
Figures are for the tax year stated in the official instructions linked below.
How we handle it
- Foreign Income & FBAR
FBAR and Form 8938 reporting for UK accounts, with the income those accounts produce reported correctly on the US return.
- Individual Tax Returns
US federal returns for Americans living in the UK and British nationals with US income, prepared with the UK figures in view.
- PFIC Reporting
Form 8621 reporting and elections for US persons holding UK funds, investment trusts and non-US ETFs, inside or outside an ISA.
- Cross-Border Tax
US and UK returns prepared together from one set of workpapers, so credits, tax years and exchange rates line up across both.
Where people go wrong
The Form 8938 errors we correct most often.
Who files it
- Americans in the UK with investment accounts, ISAs or pensions above the abroad thresholds
- US residents holding UK accounts or shares above the lower domestic thresholds
- Owners of shares in UK private companies held directly rather than through a broker
- Returning Americans in their first year back with UK savings still in place
01
Using the abroad thresholds in a year the filer did not qualify as living abroad
02
Leaving off directly held foreign shares because they are not in a bank account
03
Reporting different maximum values on Form 8938 and the FBAR for the same account
04
Forgetting that an omitted form keeps the whole return open to assessment
Why US UK Tax Returns
Every form is prepared against the official instructions, and every position on it is one we can point to in the Code, the treaty or HMRC's guidance.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
I file an FBAR. Do I also need Form 8938?
Only if your specified foreign assets exceed the Form 8938 threshold that applies to you. For a single filer living abroad that is $200,000 at year end or $300,000 at any time, well above the FBAR threshold. Once you cross it, both are required, and the same accounts appear on both. The FBAR's filing does not satisfy Form 8938 or the other way round.
Does my UK workplace pension go on Form 8938?
Often it does, because an interest in a foreign pension scheme can be a specified foreign financial asset. The valuation rules depend on whether the filer can establish the fair market value of their interest, and they work differently for defined contribution and defined benefit arrangements. Once the threshold is passed, each scheme is listed with its own maximum value, so the facts of each one matter.
What counts as living abroad for the higher thresholds?
A filer qualifies if they are a US citizen who is a bona fide resident of a foreign country for an uninterrupted full tax year, or is present in foreign countries for at least 330 full days in a twelve-month period ending in the tax year. These mirror the tests used for the earned income exclusion. A move during the year may leave someone on the lower domestic thresholds.
Primary sources
What this page says is drawn from the official material below. Read it yourself; we would rather be checked than trusted.
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Need Form 8938 prepared or reviewed?
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