Tax question on Maturing NS&I bonds

Josh_bear

Hi, I have NS&I bonds maturing in 1 months time and my intent is to allow them to automatically move to another Bond with NS&I.

None of the funds will leave NS&I for another year. Given I have earned interest on the current bonds and that will go into the new bonds with the original capital, when do I pay tax on that interest? 24 / 25 Tax year or 25 / 26 Tax Year?

In case it is relevant, I am no longer working and have no income apart from interest on my savings as my pension is not available yet. Thanks for any help. 

InvesterJones

It's due for 24/25 tax year, as that is the year the original bond matured and you had the option to do something with it. When you pay it is another matter, usually at least one year later, sometimes two, if indeed you owe anything.

mebu60

You will have earnt the interest in 24/25. The amount of tax you may have to pay depends on your total income including savings interest for the tax year minus any allowances. If your earnings and pension are zero your income will just be your savings interest. 

Ayr_Rage

The interest becomes part of your taxable income in the tax year that it becomes available therefore as your bond matures next month it falls in the current tax year even if you roll it over into a new product.

Josh_bear

mebu60 said:

You will have earnt the interest in 24/25. The amount of tax you may have to pay depends on your total income including savings interest for the tax year minus any allowances. If your earnings and pension are zero your income will just be your savings interest. 

Thanks.  So I would declare the interest in my Self assessment for year 24 / 25 and pay tax on it as part of that.   Thank you.  Much appreciated.

mebu60

Josh_bear said:

mebu60 said:

You will have earnt the interest in 24/25. The amount of tax you may have to pay depends on your total income including savings interest for the tax year minus any allowances. If your earnings and pension are zero your income will just be your savings interest. 

Thanks.  So I would declare the interest in my Self assessment for year 24 / 25 and pay tax on it as part of that.   Thank you.  Much appreciated.

Yes, exactly that if you are required to complete SA. 

Shylock

mebu60 said:

Josh_bear said:

mebu60 said:

You will have earnt the interest in 24/25. The amount of tax you may have to pay depends on your total income including savings interest for the tax year minus any allowances. If your earnings and pension are zero your income will just be your savings interest. 

Thanks.  So I would declare the interest in my Self assessment for year 24 / 25 and pay tax on it as part of that.   Thank you.  Much appreciated.

Yes, exactly that if you are required to complete SA. 

If you DON'T normally submit a Self Assesment I don't think there is a need to do one just to declare this Interest Income.  NS&I will be advising HMRC of the Interest they've paid you and HMRC will write to you and let you know of the Income Tax liability and when it needs to be paid.  At least that's how it worked for me last year with a Halifax savings account.  I'm sure I'll be corrected if I'm wrong, or was just lucky

Dazed_and_C0nfused

Shylock said:

mebu60 said:

Josh_bear said:

mebu60 said:

You will have earnt the interest in 24/25. The amount of tax you may have to pay depends on your total income including savings interest for the tax year minus any allowances. If your earnings and pension are zero your income will just be your savings interest. 

Thanks.  So I would declare the interest in my Self assessment for year 24 / 25 and pay tax on it as part of that.   Thank you.  Much appreciated.

Yes, exactly that if you are required to complete SA. 

If you DON'T normally submit a Self Assesment I don't think there is a need to do one just to declare this Interest Income.  NS&I will be advising HMRC of the Interest they've paid you and HMRC will write to you and let you know of the Income Tax liability and when it needs to be paid.  At least that's how it worked for me last year with a Halifax savings account.  I'm sure I'll be corrected if I'm wrong, or was just lucky

HMRC expect you to register for Self Assessment and file a return if your interest is £10k or more. 

And that's irrespective of whether any tax is owed.