Interest on 2 year fixed rate bond?

OnlyMe_08

Hi

I need to complete a tax return for 2012-13, but have a bond which matures in the last quarter of 2014.

I thought I would need to declare interest for tax purposes on the 2014-15 return (as this is the period interest will be realised), but having checked may last tax statement for 2012-13, it seems that the deposit taker has included the interest accrued from September 2012 to March 2013 - is this correct?


Thanks

le_loup

Tax on interest on personal accounts is due in the tax year in which it is paid. There is no concept of accrual.

zygurat789

OnlyMe_08 wrote: »

Hi

I need to complete a tax return for 2012-13, but have a bond which matures in the last quarter of 2014.

I thought I would need to declare interest for tax purposes on the 2014-15 return (as this is the period interest will be realised), but having checked may last tax statement for 2012-13, it seems that the deposit taker has included the interest accrued from September 2012 to March 2013 - is this correct?


Thanks

It is not clear what this means.
Is the interest from sep 12 - mar 13 included in the balance ie it has been added to the account and is paid to you and declarable or is it merely a note on the statement?

OnlyMe_08

le_loup wrote: »

Tax on interest on personal accounts is due in the tax year in which it is paid. There is no concept of accrual.

This is what I thought - being a fixed savings account maturing last quarter of 2014 when interest is paid, my assumption was to include on the 2014-15 tax return.

zygurat789 wrote: »

It is not clear what this means.
Is the interest from sep 12 - mar 13 included in the balance ie it has been added to the account and is paid to you and declarable or is it merely a note on the statement?

Although it's a fixed account, interest is added on a monthly basis from what I see on the last statement, but I don't have access to those funds until the term matures.

In summary, do I need to include it on my 2012-13 tax return?

I can understand it if this was interest from a current or easy access savings account, but not a fixed term account?

le_loup

Oh.
If the interest is paid monthly and shows on your account then you DO have to account for that interest even though you have no access to spend the money. It is adding to your wealth and tax is due.

zygurat789

OnlyMe_08 wrote: »

This is what I thought - being a fixed savings account maturing last quarter of 2014 when interest is paid, my assumption was to include on the 2014-15 tax return.



Although it's a fixed account, interest is added on a monthly basis from what I see on the last statement, but I don't have access to those funds until the term matures.

In summary, do I need to include it on my 2012-13 tax return?

I can understand it if this was interest from a current or easy access savings account, but not a fixed term account?

It is the rate of interest which is fixed, you don't have access to the money because it is a bond and yes you do have to declare it AND any tax deducted therefrom, you don't want to pay it twice, do you?