Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 04 Jan 2024 23:05:08 GMT by Karen
Hello, I had received interest from a government bond, is the interest treated as "taxed interest" when I report the self-assessment? Thanks, Karen
Posted Thu, 11 Jan 2024 10:24:35 GMT by HMRC Admin 25
Hi Karen,
Deeply Discounted Securities’ (DDS) are government securities, commercial bonds and loan stock, where the amount paid on redemption is higher than the price at which they were issued.
The difference is the discount and represents the whole or part of the reward to the holder of the security for the use of the money borrowed by the security issuer.
Where certain conditions apply, the tax rules ensure that gains on such securities are taxed as income, rather than as capital gains.
SAIM3010 - Deeply discounted securities: introduction
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).
Additional information
Thank you. 
Posted Fri, 12 Jan 2024 11:02:38 GMT by Karen
Hello, Thanks for your reply. Currently I'm having the government bond (from non-UK government) and not yet sell it. I have interest received from the bond. Is the received interest reported as "foreign income"? Thank you.
Posted Wed, 17 Jan 2024 10:04:45 GMT by HMRC Admin 25
Hi Karen,
Yes, it should be declared in a Self Assessment tax return.
Thank you. 
Posted Mon, 01 Apr 2024 16:23:49 GMT by edmund
Does the Gilt treat as deeply discount security also? The difference upon redemption should be taxed as Gct or income tax?
Posted Tue, 09 Apr 2024 11:44:30 GMT by HMRC Admin 32

Gilt strips held by individuals and other non-corporates are treated as deeply discounted securities, and profits or losses are taken into the income regime.

Please see SAIM3130:

SAIM3130 - Deeply discounted securities: strips of government securities

Thank you.

You must be signed in to post in this forum.