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Posted Sun, 28 Aug 2022 22:54:45 GMT by David.H
Hi there, I’m a UK citizen, but I’ll be living in Australia for the next few years and will be a non-resident for tax purposes in the UK. I still have a UK bank account that accrues a small amount of interest each year - no more than £5/£6. If I’m a non-resident for tax purposes, do I have to submit a tax return for this? From what I’ve read on other threads, if it's under the allowance, you don't have to declare it, even for non-residents. Is this correct? Thanks!
Posted Tue, 01 Nov 2022 17:26:51 GMT by derekches
If I have a three year savings bond, when am I deemed to have been paid the interest? Is it annually when I receive notification of the interest for that year, or is it at the end of the three year period?
Posted Fri, 04 Nov 2022 13:00:58 GMT by HMRC Admin 10
Hi
It would be when you receive the interest, which you state is yearly.
Thankyou.
Regards.
Posted Sat, 05 Nov 2022 13:42:43 GMT by Ethics Gradient
To be clear: if the amount of interest is added to the balance of the bond each year, but, since it's a bond, you cannot access the interest in any way until it matures after three years, are you saying the interest is deemed to have been paid each year? The previous poster talked about "receiving notification of the interest", but you have replied about "receiving the interest", which are two different things.
Posted Mon, 07 Nov 2022 11:08:47 GMT by derekches
Since posting the above, I have reread the small print of NS&I bonds. As a 3 year bond, I could not access the interest until the three years had elapsed - even though they told me annually what interest had been added ( and compounded for the following year). Thus the £1000 tax allowances for years 1 and 2 were unused, and the whole interest, less year 3 allowance, was taxed in year 3. The problem therefore is with NS&I not HMRC Will be more careful next time!
Posted Wed, 09 Nov 2022 14:45:41 GMT by HMRC Admin 32
Hi Ethics Gradient,

As you are notified annually of the interest, it is deemed to have been paid and should therefore be declared in that tax year. The certificate will confirm the year end date it applies to.

Thank you.
Posted Wed, 09 Nov 2022 17:17:36 GMT by Ethics Gradient
Hi Admin 32, OK, that seems to go against "If the terms and conditions of the bond did not allow access until maturity, the interest would arise and be taxed at that point" from https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2440 (last updated just a month ago). I will, however, insist that a provider whose account is ambiguous on this point provides a definitive certificate each year to clear this up.

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