Americans Holding UK Assets: Why Form 8938 and 3520 Reporting Is Being Missed by Wealth Managers
TAX • CROSS-BORDER • 2026 Summary: Many US citizens living in the UK are fully compliant with HMRC — but quietly non-compliant with the IRS. UK ISAs, UK trusts, UK pensions and even standard investment accounts can trigger US Forms 8938 and 3520 reporting. This is where otherwise well-advised clients get caught out. UK tax efficiency does not equal US compliance. Form 8938 and Form 3520 are commonly overlooked by non-US advisers. Penalties can arise even where no additional US tax is due. Context: Who This Applies To This applies to US advisers with American clients resident in the UK who hold local UK assets — ISAs, UK unit trusts, UK discretionary trusts, UK pensions, investment bonds, and UK property structures. The client often believes they are “fully compliant” because their UK accountant and UK wealth manager have structured everything tax-efficiently for HMRC. That is only half the story. The IRS does not care that an ISA is tax-free in Britain. Nor does it ignore...