Declaration of Savings Interest

TerrySampson

Can anybody give me guidance on this issue……I have a 5 year fixed rate savings bond with Aldermore Bank. Interest accrues monthly and is added to the balance of the bond which compounds over the 5 years…..I do not have access to any of the money (including the interest) until the bond matures in 4 years time. Do I need to declare the annual interest accrued on my HMRC self assessment tax return in the first 4 years of the bond…..or do I declare all of it in year 5 when the Bond matures and I can access the original investment and all the interest. Advice and guidance would be very useful, thank you

Bookworm105

see this from 2 days ago
When should profit (interest) from a saving account be reported to HMRC via Self Assessment — MoneySavingExpert Forum

Bobziz

See below for HMRC's position:

 https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2440

https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2400

Albermarle

There a few ( long ) threads on this subject.
In summary if you do not have access to it then HMRC rule is that it should be reported when you get access ( in Year5) 
However most ( nearly all?) providers report the interest annually to HMRC and it is taxed in that year.
So effectively HMRC break their own rules, as it is probably easier for then to manage the administration like that.
That is just a simple summary though.

TerrySampson

Thanks so much for your responses….it suits me to wait until year 5 and in reading the relevant hmrc links this would comply with their rules. I have tried different ways to access my 5 year bond today but I can’t get to any of the money until it matures in year 5. My partner can access it early….if I should die!😂