Filing US Taxes for a Relative Who Died Abroad: An Executor's Guide

When a relative dies holding US citizenship or a green card, three separate US obligations can arise and are routinely confused with one another: the final income tax return for the year of death, any earlier years and foreign account reports never filed, and the estate's own obligations — which for a US citizen are measured against worldwide assets. The executor deals with all three, and the sensible order is to establish the position before anything is distributed.

Key takeaways

• The deceased person's income tax position and the estate's own position are different things. British executors, used to a single inheritance tax question, often resolve one and leave the other untouched.
• A final individual return is normally due for the year of death, covering income up to that date, and is filed by the personal representative.
• Where earlier years were never filed, the catch-up route is genuinely fact-dependent and must be assessed by a licensed professional before anything is submitted.
• Foreign account reporting (FBAR) can apply both to the years the deceased was alive and to the estate while it holds foreign accounts.
• For a US citizen, the US estate tax looks at worldwide assets — a UK house, pensions and investments included — and a US–UK estate and gift tax treaty exists to address double taxation.
• Distributing before the US position is known is where executors expose themselves personally.

The discovery moment

It usually surfaces in a drawer. Sorting papers after a death in the UK, an executor finds an American passport that expired in the 1990s, an old green card, or a birth certificate showing a hospital in Boston. Nobody in the family ever thought of the deceased as American, and there are no US tax returns anywhere.

This is more common than it sounds. US citizenship is acquired at birth on US soil and can pass to children born abroad to US-citizen parents; people who left as infants, or naturalised decades ago, often had no idea the obligation followed them. Our guide to the accidental American explains how the status arises. The rule itself is stated plainly by the IRS for US citizens and resident aliens abroad: such taxpayers are "subject to tax on worldwide income from all sources" and must file US returns wherever they live. Death does not erase obligations that arose during life; they become part of the estate you are administering.

That does not mean a large bill is coming. In many cases, once relief for tax already paid to HMRC is applied, the US liability for the missing years is nil or close to it. The problem is usually paperwork rather than money.

Two different taxpayers, three different questions

Separate the questions first. They involve different forms, rules and deadlines.

1. The deceased individual's income tax. Income up to the date of death, reported on a final Form 1040, plus any prior years never filed and any foreign account reports missed.

2. The estate as its own taxpayer. From the date of death the estate is a new entity. Income it earns during administration — interest, rent, dividends — is reported on Form 1041, and the estate needs its own US taxpayer identification number (an EIN).

3. US estate tax. A tax on the transfer of wealth at death, reported on Form 706. It is not income tax and is unrelated to the first two.

UK inheritance tax is the rough analogue of question three only — which is precisely why the income side gets missed. An executor who has correctly established that IHT is in hand naturally assumes the tax work is done.

The final individual return for the year of death

A return is normally required for the year in which the person died. The IRS instruction is to report "all income up to the date of death and claim all eligible credits and deductions" — income after that date belongs to the estate, not the individual. A few practical points:

• Who files and signs. The personal representative — the executor or administrator appointed to deal with the estate — files and signs the final return in that capacity. A surviving spouse may in some circumstances file jointly for the year of death; whether that is available or advantageous depends on the facts.
• Two forms to know. Where a refund is due, the IRS may require Form 1310, Statement of a Person Claiming Refund Due a Deceased Taxpayer. Form 56, Notice Concerning Fiduciary Relationship, tells the IRS that a fiduciary now acts for the taxpayer or the estate; filing it early makes what follows less difficult.
• Timing. The final return follows the ordinary due-date calendar for the relevant tax year. Where the deceased lived abroad, the automatic extension available to overseas taxpayers is usually relevant; confirm the exact dates for that year rather than assuming.
• Relief for UK tax. Tax already paid to HMRC on the same income can usually be relieved on the US side — often the difference between nil liability and a needless payment.

Where years were never filed

This is the part that unsettles executors, and it deserves care rather than speed. Start with scope: which years are actually missing, and what the income in each was. Filing thresholds are low, and a return can be required even where no US tax is ultimately payable. Our guide to missed US tax returns sets out how the position is normally worked through for a living taxpayer.

The catch-up route for someone who has died is a different question, and the honest answer is that it depends on the facts. The IRS describes the Streamlined Filing Compliance Procedures as "designed only for individual taxpayers, including estates of individual taxpayers" — but the procedures are built around a certification that the failure to file was non-willful, a statement about a person's state of mind made under penalties of perjury. Where that person has died, who may properly certify, on what evidence, and whether the streamlined route is appropriate at all turn entirely on the circumstances.

There are other routes for delinquent returns and reports. Which one fits — if any — depends on the number of years, the amounts, the evidence about what the deceased knew and when, and whether the IRS has already made contact. Do not assume any particular programme is open to the estate, and do not file into one on the strength of an internet summary, including this one. This is the point at which an executor should take licensed advice.

FBAR: the deceased's reports, and the estate's

Foreign account reporting sits outside the income tax return and is missed more often than anything else. The IRS states that a US person must file an FBAR where "the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported" — a low bar for anyone who lived an ordinary life in Britain.

Two dimensions arise:

• The deceased's own reports for years they were alive and above the threshold. The IRS advice for unfiled reports is to file late FBARs as soon as possible to keep potential penalties to a minimum, and the filing system allows an explanation for the delay. Our missed FBAR guide covers the usual approach.
• The estate's position. The IRS's list of US persons for FBAR purposes includes estates, so a reporting question can arise for the estate itself if it holds or controls foreign accounts during administration.

Because the test is the highest balance during each year rather than the balance at death, obtain full account histories from the banks while the accounts are still open.

US estate tax where the assets are in the UK

For a US citizen, the US estate tax reaches worldwide assets. The IRS describes the gross estate as everything owned or in which certain interests are held at the date of death — "cash and securities, real estate, insurance, trusts, annuities, business interests and other assets" — valued at market value at death rather than cost. A house in Surrey, an ISA portfolio, a private company shareholding and a pension interest can all fall inside that measurement.

Whether a return is required depends on a threshold: the IRS requires Form 706 where the gross estate, increased by adjusted taxable gifts and the specific gift tax exemption, exceeds the filing threshold for the year of the decedent's death. That threshold is set year by year and published in a table on the IRS estate tax page — check the figure for the correct year, because it moves. Deductions then reduce what is taxable: debts, administration expenses, and property passing to a surviving spouse or qualifying charities. Special rules apply where the surviving spouse is not a US citizen — common in Anglo-American families, and worth raising early.

Where the same assets fall within both systems, there is machinery for it. The IRS lists the United Kingdom among the countries with which the US has estate and gift tax treaty provisions; the treaty addresses which country may tax which assets and how relief from double taxation is given. We cover this in more depth in US estate and gift tax for Americans in the UK.

Practical first steps for an executor

• Secure the records before the house is cleared. Passports, Social Security number, green card, naturalisation or renunciation papers, old US returns, brokerage and pension statements, IRS correspondence.
• Obtain the death certificate and your authority document — the grant of probate or letters of administration — and order several certified copies; US institutions will each want their own.
• Tell the beneficiaries early that distribution is on hold. That conversation is far easier at the start than after a date has been promised.
• Build a full inventory of assets and accounts, with values at the date of death and peak balances in each relevant year.
• Establish the status precisely: US citizen, green-card holder, or neither; when it was acquired; whether it was ever formally relinquished. Assumptions here are expensive.
• Identify the missing years, then take licensed advice before filing anything — particularly on catch-up routes — and keep a dated record of what you did and when.

Why distributing early is the executor's own risk

Executors in England and Wales already work to the rule that debts and any inheritance tax are dealt with before beneficiaries are paid; GOV.UK's probate guidance is explicit that financial plans should wait until probate is granted. An unresolved US position belongs in the same category of unfinished business.

The risk is straightforward. Once money has left the estate it is difficult to recover, and beneficiaries who have spent it are rarely able to give it back. US law also contains rules that can leave a fiduciary personally answerable where estate assets are paid out before federal tax claims are satisfied; how they apply depends on the circumstances, and it is a question to put to your probate solicitor and a US tax adviser early.

None of this needs to be alarming. It needs to be sequenced: find out what is owed, if anything, then distribute with confidence.

Where we can help

Next Tax Source works with executors and their solicitors on estates with a US connection, from whether an obligation exists at all to the final return and the estate's own filings. A licensed CPA or Enrolled Agent reviews and signs off on everything we prepare. Usually one conversation establishes which of the three questions above actually apply — and the answer is often narrower than the family fears. If that would help, you can book a consultation.

This article is general information, not tax advice, and does not create a professional relationship. Filing thresholds, exemption amounts, deadlines and programme eligibility change; confirm the current position with a licensed professional before acting, and take advice specific to the estate before filing or distributing.

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Reviewed by a CPA / Enrolled Agent. Last updated: 9 September 2026.

Official sources: IRS – Deceased person | IRS – File the final income tax returns of a deceased person | IRS – Estate tax | IRS – Estate & gift tax treaties | IRS – Report of Foreign Bank and Financial Accounts (FBAR) | GOV.UK – Applying for probate