Reporting income from a deeply discounted security in a foreign account

Hi, If I need to enter the information about redemption of a deeply discounted security on my Self-Assessment tax form, where would that go? I am assuming they would not go into interest or into dividends or capital gains, I cannot seem to find anywhere to put them. Thanks!

Hi Jetlyn,

‘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 Tax year 6 April 2022 to 5 April 2023 (2022–23)
Additional information notes Tax year 6 April 2022 to 5 April 2023 (2022–23)

Thank you.
 

Hi HMRC Admin 20, Thank you! Just to check - does this apply even though this is foreign income (the bonds were bought in dollars and sold for dollars, all done in the US)? Box 3 is in the category 'Other UK income'.

Hi
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 :
Deeply discounted securities for more information. 
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). 
 

I have gains from the maturities of US bonds in an overseas security account. These gains have not been remitted to UK. Can you please advise where I should report these gains? Box3 of SA101 (page Ai1) is for UK gilts or UK securities. Where to report for gains from foreign bonds/securities in overseas account?

Hi G SIU

Please declare this in the foreign section (SA106) page F6, box 41.  Please also have a look a the notes relating to this box using the link below.
Foreign (2023)
Foreign notes (2022-23)

Thank you