Questions of US Treasury Bond accrued interest paid and coupon received

I bought US Treasury Bonds with half yearly coupon in secondary market using a broker account. When buying the bond, “accrued interest” (USD X1) will be paid (i.e. the part of the coupon paid to the seller of bond). Coupon will then be received half-yearly (USD Y1). If the buying date and the coupon receiving date of the bond is in different tax years (e.g. buying bond date is July 2023, and coupon date is 30 Apr 2024), please advise whether all below (i) and (ii) and (iii) are correct: (i) no need to report the negative accrued interest in tax year 2023-2024 when buying the bond (ii) report the “bond interest” in the tax year 2024-2025 (i.e. the tax year in which coupon is received) calculated by below. (ii) convert the accrued interest paid during buy USD X1 to GBP X2 (can select HMRC’s monthly or yearly average rates) convert the coupon USD Y1 to GBP Y2 (can select HMRC’s monthly or yearly average rates) report the bond interest amount by subtracting GBP X2 from GBP Y2 (i.e. bond interest received = GBP Y2 - GBP X2) Thanks.

Hi, 
Please refer to guidance at HS343 Accrued Income Scheme (2024) Updated 6 April 2024
Thank you.

Thanks for your reply. I have read the HS343 Accrued Income Scheme in the above link, and have the below follow-up questions: 1. Refer to “8.1 Example 3” in the HS343, I sell rest of my holding on 3 Apr 2023, this example seems refer to the interest of selling the security was to be received on 30 Jun 2023. What if the accrued interest of selling the security was received on the sale date i.e. 3 Apr 2023? Is it true that I need to report the interest in the tax year 2022-2023 instead of 2023-2024? (NB: this is the case when I sold US Treasury note or bond with non-zero coupon in secondary market using a broker account, the accrued interest was received on the date of selling instead of the next coupon payment date). 2. In section 7.1, it stated “If you’ve paid or received amounts in a foreign currency, you should translate them into sterling at the spot rate of exchange for the day on which your sale or purchase of the security was settled.” Where can I find this “spot rate of exchange” ? Can I use the HMRC’s monthly or average yearly exchange rate? Thanks.

Hi,
1. yes  
2. HMRC currency exchange average rates - GOV.UK (trade-tariff.service.gov.uk
Thank you.

Thanks for your reply. I tried clicking to the above link but cannot find the HMRC currency exchange average rates. Can I choose to use the monthly or average yearly currency conversion rate listed in the HMRC link "https://www.trade-tariff.service.gov.uk/exchange_rates" and "https://www.trade-tariff.service.gov.uk/exchange_rates/average" ? Thanks.

Hi,
Yes.  You can choose from the monthly, annual or spot rate or from somewhere of your own choosing such as the stock exchange.
Thank you.