Interest on foreign bond investments

Hi, I invested in Italian bonds in February 2023. In July 2023, I received a gross interest of 350 euros on which I paid taxes in Italy (12.50%). In January 2024 I will receive a gross interest of 350 euros on which I will pay taxes in Italy (12.50%). I have not gained any other interests. I would like to know: 1) whether I need to fill in a self-assessment form for the tax year 2022/23; 2) how I can get the taxes back from Italy. Thanks!

Hi
Yes, you will need to submit a self assessment tax return, because you  are in receipt of foreign income.  You would need to declare the interest in the foreign section, so that you can claim a foreign tax credit, for the Italian tax paid.

Thanks. May I know why I need to submit a SA form for the year 2022/23 if the interest was paid in July 23 and January 2023?

Hi,

The interest would be declared in a tax return relating to the tax year that the interest arises. The date you quote would be for a 2023 to 2024 tax return which will become available after 6 April 2024.

Thank you.

Dear Sir, If the bond buying price is higher than face value, how to report the difference when redemption? claim lost or claim relief? Best regards edmund

Hi,

If you complete a Self Assessment tax return, please declare it in the capital gains section and include supporing evidence.  

If you do not compete a tax return, you should claim in writing, including supporting evidence, to:

HMRC,
BX9 1AS

This must be done within 4 years of the end of the tax year in which the loss arises.

Thank you.

Hi, I invested in Italian bonds in February 2023. In July 2023, I received a gross interest of 350 euros on which I paid taxes in Italy (12.50%). In January 2024 I will receive a gross interest of 350 euros on which I paid taxes in Italy (12.50%). I have not gained any other foreign interests. I am filling in the foreign income section of my tax return to claim for tax relief but would like to know what the % foreign tax credit relief is? Thanks!

Hi lilly90,
Whe declaring foreign interest in your tax return you would select 100%, as a Foregin Tax Credit for interest can be up to 100% of the foreign tax paid.
It is only dividends that are restricted to to a lower percentage, depending on the tax treaty.
Thank you. 

Hi, thanks but the online system only allows me to claim for maximum 25% of the foreign tax paid, i.e. the maximum rate of tax credit relief allowed is 25%. Could you let me know how I can select 100%? Thanks!

Hi lilly90,
The drop down option will be for the dividends only.
You are asked further on to confirm total figures and if you disagree, you enter your figure.
Thank you. 

 

Hi, thanks, could you let me know exactly in which online section I can enter the new figures? Could you also confirm that the figure I should add is the foreign tax paid? Thanks!

Hi,
It is towards the end after completing the foreign pages and you will be asked if you agree with the foreign tax credit that has been calculated. If you select no you can then enter your own figure. We cannot advise you of the figure as it is self assessment and for you to determine.
Thank you.