Form 3520: when a gift from home becomes a filing in America.
Receive more than $100,000 in a year from a non-US relative — a gift, an inheritance from a UK estate — and the IRS expects Form 3520. No tax is due on the gift itself; the penalties are for the silence, and they are among the harshest in the code.
Figures relate to tax year 2025 (US) · 2025-26 (UK)
What gets reported here
Three things live on this form: large gifts and bequests from foreign individuals and estates, distributions from foreign trusts, and transactions with foreign trusts you're treated as owning. UK families produce all three — inheritances, family trusts, and arrangements nobody thought of as a 'trust' until the US definitions arrived.
Reporting is informational: a properly reported gift or inheritance carries no US tax. Late reporting is the expensive part — penalties run five percent per month of the unreported amount, capped at twenty-five percent.
- Gifts and bequests over $100,000 from foreign persons
- Foreign trust distributions and ownership
- Due with your return, filed separately to Ogden
- Penalties up to 25% of the unreported amount
UK structures, US definitions
Whether a UK arrangement is a 'foreign trust' for US purposes is a position, not a label: some employer pension arrangements are treaty-protected, some family structures are grantor trusts with 3520-A obligations, and some need no reporting at all.
We take that position deliberately, document it, and keep the reporting consistent year over year — inconsistency is what draws questions.
Primary sources
Official guidance from the IRS, FinCEN and GOV.UK. Thresholds and rates on those pages are updated annually — check the current tax year before relying on a figure.
Questions, Answered.
What clients ask about irs form 3520
My UK parent left me an inheritance. Will the US tax it?
Receiving it — no, the US doesn't tax the recipient of a foreign inheritance. But over $100,000 it must be reported on Form 3520, and what the inheritance turns into — accounts, funds, property — starts generating its own US reporting immediately.
Is my SIPP or workplace pension a foreign trust needing 3520?
UK pensions are technically trusts, but treaty and reporting-relief positions generally keep ordinary employer schemes and SIPPs off Form 3520. The position depends on the plan's facts — it should be taken once, documented, and applied consistently.
I missed a 3520 for a past gift. What now?
File through the appropriate disclosure route with a reasonable-cause statement rather than quietly attaching it late. Penalty outcomes differ enormously between a managed disclosure and a bare late form — this is one to sequence carefully.
When is Form 3520 due?
It follows your income tax return deadlines — including extensions — but is filed separately to the IRS service centre rather than attached to the 1040. Extending your 1040 extends the 3520 with it.
Do gifts between spouses trigger Form 3520?
Gifts from a nonresident spouse are still reportable above the threshold, though transfers to a US-citizen spouse carry unlimited gift-tax marital deduction on the giver's side. Report and tax are separate questions — this form is only about the reporting.
Next Step.
Tell us what you hold — the scope and a fixed fee follow in writing.