UK Gilt Bond ETF - Foreign Interest Income?

My wife is UK Resident and has a holding in an Exchange Traded Fund that is listed on the London Stock Exchange. The fund is invested 100% in UK Government Gilts. She received a distribution from the fund of £2900, with no other income she will have no tax to pay as this is below her personal allowance. However, as with most ETFs the fund is domiciled in Ireland. The fund is listed by HMRC as an ‘Approved Offshore Reporting Fund’. Am I correct that the distribution: a) Is Interest Income as the fund is more than 60% bonds. b) Is Foreign Interest as the ETF is domiciled in Ireland. c) Requires her to register and file a Self Assessment form to declare Foreign Income, even though she will have no tax to pay as she is under her personal allowance? I’m just checking as she bought a UK Gilt fund listed on the London Stock Exchange and now I think she may have to complete a Self Assessment to declare Foreign Income where no tax is due. Thanks in advance!

Hi,

Yes, this will need to be declared in a tax return.

Thank you.

Hi, I can't see any answer to JustCheck's question a). This is a burning question for me as I have received a lot more than £2000 in distributions from Irish-domiciled ETFs classified as bond funds and need to enter them in the correct place on SA106. I don't want to get this wrong as the tax rates of interest income and dividend income are very different. Basically: are the distributions of a reporting Irish-domiciled fund invested 100% in UK Government Gilts/Bonds to be entered as FOREIGN SAVINGS INTEREST, or as normal FOREIGN DIVIDENDS? Thank you!

Hi, I can't see any answer to JustCheck's question a). This is a burning question for me as I have received a lot more than £2000 in distributions from Irish-domiciled ETFs classified as bond funds and need to enter them in the correct place on SA106. I don't want to get this wrong as the tax rates of interest income and dividend income are very different. Basically: are the distributions of a reporting Irish-domiciled fund invested 100% in UK Government Gilts/Bonds to be entered as FOREIGN SAVINGS INTEREST, or as normal FOREIGN DIVIDENDS? Thank you!

Hi TipTopKaf

The tax and capital gains liabilities of ETF's are based on their asset class.  
Bonds are taxed as interest, Equities as dividends and commodities soley as capital gains tax.  All 3 are subject to capital gains tax.

Thank you