Do I have to report a custodial account on Form 8938?

Yes, a custodial account is a financial account where a bank, broker, or other institution holds assets (stocks, bonds, mutual funds, or cash) on your behalf. You own the assets inside the account, but the institution is the legal custodian that safeguards them, executes trades, and issues statements. If the custodial account is held at a foreign financial institution and your total specified foreign financial assets exceed the Form 8938 thresholds, you must report it.

Common examples of foreign custodial accounts:

• Foreign brokerage accounts (e.g., Hargreaves Lansdown, Interactive Brokers UK, Saxo Bank)
• ISAs (Individual Savings Accounts) in the UK are held by a custodian
• Foreign nominee accounts where a bank holds shares in its name on your behalf
• Managed investment accounts at a foreign wealth manager
• Foreign mutual fund platforms that custody your fund units

Reporting thresholds for expats living abroad:

A foreign custodial account is also reportable on your FBAR if your aggregate foreign account balances exceed $10,000 at any point during the year. The FBAR threshold is much lower and applies regardless of filing status.

What is NOT a custodial account:

• Directly registered shares where you appear on the company’s shareholder register (still reportable on Form 8938, but as an “other specified foreign financial asset,” not as an account)
• A UGMA/UTMA account you set up for a minor at a U.S. institution (U.S. accounts are not reportable)
• Physical assets like real estate, art, or gold bullion held in a vault (not reportable on Form 8938)

For more on FATCA thresholds, see our Form 8938 guide.