US government bond

Hi! May I know that when I receive the money on maturity day of the US government bond, it should be counted as capital gain tax, right?

Hi,

US government bonds, sometimes known as T-Bills or Treasury Bills, are generally taxed as income rather than capital gains. The return is paid at maturity rather than regular interest payments.

In the UK, these are known as deeply discounted securities, with the discount being the difference between the price at which they were issued and hte price redeived at maturity.  

On a foreign investment the income is the difference between the purchase and redemption price after each has been converted to sterling on the day the transactions took place, so includes any foreign exchange gains. Losses cannot be deducted. You can see guidance here:

SAIM3010 - Deeply discounted securities: introduction 

Thank you.

Thank you for your reply! I will put the earnings on US government note in my foreign income. How about the interest, counted as foreign interest, right? Is that I should use the rate of the maturity day to file the self assessment even I didn't convert the USD to sterling on that day? Thank you!

Hi Mable Lau,

You can use any of the rates referred to at - Exchange rates from HMRC in CSV and XML format within the correct UK tax year.

Thank you.

Dear Sir, Please advise which box I should fill in SA100 of US Treasury bond gain of tax return? thanks.

Hi Lisa,
US treasury bonds are seen as deeply discounted securities.
If you invest in deeply discounted securities, put the difference between what you paid for the bond and what you redeem or sell it for in box 3 of SA101 (page Ai1). 
Thank you. 

Regarding the interest part of US bond, which box I should fill in for the Bond Interest receive? thanks.

Hi Lisa,
You should complete the section 'Interest and other income from overseas savings', showing the 3 character country code and any tax deducted.
Foreign Tax year 6 April 2022 to 5 April 2023 (2022–23)
Foreign notes Tax year 6 April 2022 to 5 April 2023 (2022–23)
Thank you. 

I would like to clarify my US Bond investment is from Interactive Broker UK which is a UK Broker, please advise whether the Interest received I should file in 'overseas savings' or anywhere of tax return SA100? Thank you.

Hi Lisa,
US government bonds, sometimes known as T-bills or treasury bills are generally taxed as income rather than capital gains.
The return is paid at maturity rather than regular interest payments.
In the UK, these are known as deeply discounted securities, with the discount being the difference between the price at which they were issued and the price received at maturity.  
On a foreign investment the income is the difference between the purchase and redemption price after each has been converted to sterling on the day the transactions took place, so includes any foreign exchange gains. Losses cannot be deducted. 
Have a look at SAIM3010 - Deeply discounted securities: introduction for more information. 
Thank you.
 

Thanks for reply. I also have US Corporate Bonds, Is it the same method of US Treasury Bond regarding the fill in items of SA100?

Hi Lisa,
Yes, you are correct. 
Thank you. 

Dear HMRC, Regarding the US Bond, I understand that I have to put the difference between what I paid for the bond and what I redeem when maturity, please advise do I need to include the commission fee + interest pay/receive included to report to HMRC for my tax return in SA101? Thanks.

Hi Lisa,
If you invest in deeply discounted securities, put the difference between what you paid for the bond and what you redeem or sell it for in box 3 of SA101 (page Ai1).
The SA101 guidance notes advise:-
Box 1 Gilt etc interest after tax taken off . Put the total amount of interest received from your gilt-edged and accrued income securities with tax taken off in box 1.
If the interest did not have tax taken off, put this amount in box 3.
Do not fill in boxes 1 and 2.
Box 2 Tax taken off put the tax taken off the interest in box 2.
Box 3 Gross amount before tax Add together boxes 1 and 2 and put the total figure in box 3.
Make sure you include any deeply discounted securities you redeem or sell.  
There is no mention of commission fees or interest, so these should not be include.  
(Additional information notes Tax year 6 April 2023 to 5 April 2024 (2023–24) Use these notes to help you fill in the Additional information pages of your tax return).
Thank you.

I bought US government bond with coupon of 0.625% , maturity of 15 May 2030, issued at 100 in 2020 but I bought it at 80 today. Does that count as DDS?

Hi,
US government bonds, sometimes known as T-bills or treasury bills are generally taxed as income rather than capital gains.  
The return is paid at maturity rather than regular interest payments.  
In the UK, these are known as deeply discounted securities, with the discount being the difference between the price at which they were issued and the price received at maturity.  
On a foreign investment the income is the difference between the purchase and redemption price after each has been converted to sterling on the day the transactions took place, so includes any foreign exchange gains.  
Losses cannot be deducted. 
Have a look at Savings and Investment Manual SAIM3010 - Deeply discounted securities: introduction for more information. 
Thank you.

Hi HMRC, I have US Treasury Bills holding in my UK based broker account (Interactive Brokers UK), and I receive bond interest (coupon payment) in USD twice a year. Upon reviewing the related threads in this forum, could you please help to confirm if my understandings below are correct? 1) Report the bond interest received as foreign income and fill in SA106 form accordingly, making use of the approved exchange rate for GBP/USD. 2) Upon bond maturity, report the difference between what I paid for the bond and what I redeem it in box 3 of SA101 form (page Ai1), making use of the approved exchange rate for GBP/USD. Thank you.

Hi,
US government bonds, sometimes known as T-bills or treasury bills are generally taxed as income rather than capital gains.  
The return is paid at maturity rather than regular interest payments, in the UK, these are known as deeply discounted securities, with the discount being the difference between the price at which they were issued and the price received at maturity.  
On a foreign investment the income is the difference between the purchase and redemption price after each has been converted to sterling on the day the transactions took place, so includes any foreign exchange gains.  Losses cannot be deducted. 
Have a look at SAIM3010 - Deeply discounted securities: introduction for more information. 
Thank you.