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Posted Mon, 03 Apr 2023 07:36:14 GMT by Matteo Pellegrini
Dear HMRC I have recently invested some of my savings in a "Share Certificate” offered by my US Credit Union. These are guaranteed fixed interest rate savings instruments offered by US credit unions (I read online that when offered by traditional banks they go by the name of “Certificate Deposits"). In my case the investment is for 10 years, the interest is credited quarterly into the Share Certificate account, but there are heavy penalties for early withdrawals (36 months of interest, “The penalty is calculated as a forfeiture of part of the dividends that have been or would be earned on the account. It applies whether or not the dividends have been earned. In other words, if the account has not yet earned enough dividends or if the dividends have already been paid, the penalty will be deducted from the principal.”) If I were taxed in the US, I understand these would be taxed as interest income and taxable for each year interest is gained How should these be treated for self-assessment purposes in the UK? - Should I declare these are “foreign interest” income? - Should I declare interest on an annual basis? Or should I declare interest income only at the end of the 10 year term when I can access them without penalties? Thanks Matteo

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Posted Thu, 13 Apr 2023 11:22:25 GMT by HMRC Admin 32

You will declare this as foreign interest. As the funds could be accessed, albeit with a penalty, you will declare the annual amount received.

Thank you.
Posted Thu, 13 Apr 2023 11:37:37 GMT by Matteo Pellegrini
Thank you, much appreciated!

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