Interest from fixed rate savings bonds - income of deceased account holder or estate income?

Hi, Deceased parent held 3 fixed rate savings bonds of 1, 2 and 3 yrs in duration. Yr 1 matured in 23/24, yr 2 matures in 24/25, yr 3 matures in 25/26. Interest on all 3 bonds is reported both annually and on maturity, but is not accessible until maturity. Account holder died 05/04/24. My assumption is that the interest paid on the 1 yr bond counts as income of the deceased as it was accessible, but as the interest reported on the 2 & 3 yr bonds for tax year 23/24 was not accessible to the deceased, it will become estate income and taxed accordingly when the accounts are closed by the executor. Is this correct please ? Thank you.

Hi,
Any interest arising after the date the deceased passed away, is income of the estate.
Thank you.

Thank you. And should therefore also not be included in the deceased estate value report for IHT purpose ?

Hi Craig House,
Any interest arising after the date the deceased passed away, is income of the estate and should be included for Inheritance Tax purposes.
Inheritance Tax is calculated on the estate of the deceased.
Thank you. 


 

Thank you, so this means that the interest is potentially subject to both income tax (estate income after death) and inheritance tax (counted in the total estate value subject to an IHT assesment) ?

Hi,

Income Tax may be payable by the estate on interest arising after the date of death of the deceased. This is separate to the value of the estate, which is used in calculating Inheritance Tax.

Thank you.