FBAR Signature Authority: Employer, Joint and Family Accounts You Must Report

FBAR signature authority means you can control the disposition of money in a foreign account by instructing the bank, even if none of it is yours. Those accounts count towards the $10,000 threshold and must be reported, which catches company accounts, a parent's account and a club treasurer's account alike. FBAR and FATCA reporting covers both kinds of interest.

Most people understand they must report their own accounts. What sinks returns is the second category: accounts they merely sign on. Nothing is owed on them, nothing is earned from them, and leaving them off is still a violation.

FBAR signature authority and financial interest

FinCEN Form 114 asks about two relationships. A financial interest means you own the account or hold it through someone acting on your behalf; signature authority means you can control what happens to the funds by direct communication with the institution, alone or with others.

The filing trigger is the same for both. As the IRS sets out on its FBAR page, you file when the aggregate value of your foreign financial accounts exceeded $10,000 at any time during the calendar year — the accounts you sign on are added to that total.

The aggregation rule catches small accounts

The $10,000 test is not per account. Add every foreign account together, at its highest balance during the year, and one large account you sign on can drag several small personal accounts into reporting.

A US citizen in London with a £3,000 current account, a £2,000 savings account and signature authority over a £40,000 employer account is over the threshold and must report all three. Each account is then listed separately with its maximum value.

The peak balance rule catches ordinary life as well. A current account that briefly held the proceeds of a house sale, a deposit passing through before completion, or a redundancy payment sitting for a fortnight all count at their highest point, even if the account ended the year nearly empty. The same is true of an employer account that handles payroll once a month.

Accounts people forget

Beyond the obvious current account, the list usually includes a workplace pension, a stocks and shares ISA, a Help to Buy or Lifetime ISA, a Premium Bonds holding, a foreign currency account left over from a house purchase, and a dormant account from a previous employer. Business owners should add the company account, any merchant or payment platform balance held abroad, and a client account they can instruct.

Spouses and joint accounts

A joint account is reported by both holders. Spouses can file a single FBAR covering jointly owned accounts only where all the reportable accounts are jointly owned, both sign, and the non-filing spouse authorises it on Form 114a.

That condition fails more often than people expect. If one spouse holds a pension, an ISA or an account in their sole name, separate FBARs are needed. The filing status on your return is a separate question, covered in married to a non-US citizen.

Employer accounts and the narrow exceptions

Certain officers and employees are relieved from reporting signature authority over their employer's accounts — broadly where the employer is a US bank, a US-listed company or another entity meeting specific conditions, and someone else reports the account. The exceptions are drawn tightly and do not cover an American who signs on the accounts of an ordinary UK employer.

What to report for each account

• The institution's name and address, and the account number.
• The maximum value during the calendar year, not the year-end balance.
• Whether your relationship is a financial interest, signature authority, or both.
• Values in US dollars, converted using the Treasury year-end rate.
• Every account, even those below $10,000, once the aggregate is over.

Form 8938 uses different thresholds and a different asset list, as the IRS's comparison of Form 8938 and FBAR requirements shows, and it does not track signature authority in the same way — the two are compared in FBAR versus Form 8938. Pensions are the other commonly missed item, covered in reporting a UK SIPP.

If you have missed years

Unreported signature authority is a common reason for a late filing, and it is usually non-willful. Where returns were otherwise correct, delinquent FBARs can often be filed with a reason; where income was also unreported, the streamlined route applies — see Form 14653 and the non-willful certification.

Tranzesta maps every account a client can sign on before filing, including employer and family accounts. Book a consultation if you are not sure which accounts count. The wider return sits under US expat tax returns.

Frequently Asked Questions

What is signature authority on an FBAR?

It is the power to control the disposition of money or other assets in a foreign account by direct communication with the institution, whether alone or together with others. You report accounts you sign on even when you own none of the money, and their balances count towards the $10,000 aggregate filing threshold.

Do I report my employer's UK bank account?

Usually yes, if you can authorise transactions on it. Narrow exceptions exist for officers and employees of certain US banks, US-listed companies and similar entities where another party reports the account, but they do not generally cover an American working for an ordinary UK employer.

Do both spouses file an FBAR for a joint account?

Each spouse has a reportable relationship with the account. A single joint FBAR is allowed only where all the reportable accounts are jointly owned by both spouses, both sign, and the non-filing spouse completes Form 114a authorising it. If either spouse has an account in their sole name, separate FBARs are required.

Does an account I hold under power of attorney count?

Yes. If a power of attorney lets you instruct the bank about a parent's or relative's foreign account, that is signature authority and the account is reportable by you, with its maximum balance counting towards your $10,000 threshold, even though the money is not yours.

What value do I report for each account?

The maximum value the account reached at any point during the calendar year, converted into US dollars using the Treasury's year-end exchange rate. It is not the closing balance, so an account that briefly held a house deposit is reported at that peak figure.

Do UAE accounts have the same rules?

Yes. FBAR rules apply to foreign accounts anywhere, so a US citizen in Dubai reports personal accounts and any UAE company or employer accounts they can sign on, using the same $10,000 aggregate threshold and the same maximum-value basis.