Tax on US T-Bond and foreign bonds in general.

Hi. Consider, for example, a US T-Bond with face value 100 and coupon of 2% bought at discount at 95 today 14/02/2024. Suppose that it is held to maturity date, in exactly 2 years, so 14/02/2026. 1) Does the interest incurs in the income tax as per corresponding personal band? Is it taxed when received? 2) Is the difference between the par value 100 and the buying price of 95 taxed as income? Or taxed as capital gain??? 3) May I have a link to an official document that clarifies the tax treatment of both UK and foreign bonds? Many thanks

Hi,

The tax is charegeable in the tax year that the bonds are disposed of. You can see guidance here:

SAIM3080 - Deeply discounted securities: taxation: losses

Thank you.

Thank you. The bond I am talking about is not a DDS according to SAIM3020 as it was issued at face value. The price paid on secondary market does not seem to be relevant. Am I right? For the sake of this example, where the bond is not a DDS, what is its tax treatment?