Kolif

Hi I would like to buy a Two Years NS&I’s Guaranteed Growth Bond. I will get back the principal and interest on the maturity date. However, there’s a feature of interest rates on the summary box: “We calculate the interest daily and add it to your Bond on each anniversary of investment.” When I fill in the self assessment, should I report the interest income each year in the coming two taxation years? Or report all interest income (i.e. two years interest income) as a whole on the maturity date? Thank you for your assistance.

Hi, thanks for your reply. I would like to further clarify the tax return between Gilts’ buying price and selling price/maturity value. According to your reply, although Gilts are not subject to capital gains tax, the difference between buying price and selling price/maturity value (+ 2.83% in my case) should be treated as interest as well and need to report on SA101 Box 1 & Box 3 of Ai1 as income. Is my understanding correct? If this is the case, how to report if buying price is higher than selling price/maturity value?

I purchased Gilt on 13/5/2024 at 97.17% of the Gilt’s nominal value. The Gilt will be matured on 31/1/2025 with coupon rate at 0.25% p.a. I read the HMRC Guidance about Gilt’s taxation. The gain of that 2.83% (100%-97.17%) is exempted from tax. That 0.25% p.a. coupon gain should be reported as income. Is my understanding correct? What is the difference in tax reporting for the gain in capital between (a) I sell the Gilt before maturity and (b) I wait the maturity of Gilt and get back 100% of the nominal value? Both of them are exempted from tax? Thank you.