Financial Interest

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Financial interest means ownership or certain indirect control over a foreign financial account for FBAR purposes. A U.S. person may have a financial interest in a foreign account if the account is in their name, jointly held, held for their benefit, or held through certain entities, nominees, agents, or trusts.

Why it matters for U.S. expats

Financial interest determines whether a foreign account must be reported on FBAR. Many expats focus only on accounts in their own name, but the rules can also cover joint accounts, accounts held through foreign companies, accounts managed by someone else, and certain trust accounts. If the aggregate value of reportable foreign accounts exceeds $10,000 at any point during the year, financial interest can create an FBAR filing requirement.

Common questions

1. What does financial interest mean for FBAR?

For FBAR, financial interest means the U.S. person owns the account, holds legal title to it, or is treated as having an interest through certain agents, nominees, entities, or trusts.

2. Does a joint foreign account create financial interest?

Yes. If a foreign account is held in more than one person’s name, each U.S. person named on the account has a financial interest in it.

3. Can a U.S. expat have financial interest in an account not in their name?

Yes. A U.S. person can have financial interest when the account is held by an agent, nominee, attorney, or another person acting on their behalf.

4. Does owning a foreign company create financial interest in company accounts?

It can. A U.S. person can have financial interest in foreign accounts owned by a corporation, partnership, or other entity when they own more than 50% under the FBAR ownership rules.

5. Can a trust create financial interest for FBAR?

Yes. A U.S. grantor can have financial interest in trust accounts if they are treated as the owner of the trust for U.S. tax purposes. Certain trust beneficiaries can also have financial interest when they have more than 50% present beneficial interest or receive more than 50% of current income.

6. Is financial interest the same as signature authority?

No. Financial interest is based on ownership or certain indirect interests. Signature authority means the ability to control money or assets in the account by direct communication with the financial institution.

7. Does financial interest require the account to produce income?

No. An account can be reportable for FBAR even if it earned no interest, dividends, or other income.

8. Does financial interest count toward the $10,000 FBAR threshold?

Yes. Accounts in which a U.S. person has financial interest are included when calculating aggregate account value for the $10,000 FBAR threshold.

9. Can children have financial interest in foreign accounts?

Yes. A U.S. child can have financial interest in a foreign account if the account is held in the child’s name or for the child under the FBAR rules. A parent may need to file on the child’s behalf.

10. What records should U.S. expats keep for accounts with financial interest?

Keep the account name, account number, financial institution name and address, account type, maximum value during the year, ownership details, and exchange-rate calculation used for U.S.-dollar reporting.

Related forms

• FinCEN Form 114: Report of Foreign Bank and Financial Accounts
• Form 8938: FATCA reporting for U.S. expats
• Schedule B: Interest and Ordinary Dividends

When to get help

Professional guidance is important when:

• You have foreign accounts in your name or jointly with someone else.
• You own or control a foreign company with financial accounts.
• A foreign account is held by an agent, nominee, attorney, or family member for your benefit.
• You are connected to a foreign trust with financial accounts.
• You have signature authority but are unsure whether you also have financial interest.
• You missed FBAR filing for accounts you owned directly or indirectly.
• You need to calculate aggregate account value across several foreign accounts.

Bright!Tax can review your foreign accounts, identify where financial interest exists, and prepare FBAR and related reporting forms correctly. Get started with Bright!Tax.

Related Bright!Tax guides

• FBAR filing requirements for Americans living abroad
• FBAR vs. Form 8938: Which one applies to you
• Delinquent FBAR Submission Procedures

Official sources

• IRS: Report of Foreign Bank and Financial Accounts
• FinCEN: Report Foreign Bank and Financial Accounts
• eCFR: 31 CFR § 1010.350
• FinCEN: BSA E-Filing System

Reviewed by

Katelynn Minott, CPA & CEO

Last reviewed

July 2026