NSI Bonds Maturing and Interest for Tax Purposes

Sobeboy15

Good Morning,

I have two NSI Bonds Maturing and I am wondering what to do with them with regards to the interest.  

I have rolled them over from last year so did not receive any interest payment.

Is the interest on these bonds liable for Tax in the financial year that it is accrued or does it become liable for tax when you actually physically receive the money?

Im in a dilemma (because of the new rates), wether to roll the principal and interest again or take out the interest element, or take out the whole amount Principal and Interest and invest in a higher rate account.

Im not sure when HMRC takes account for the interest wether its in the year its accrued or when its paid.

Any help would be appreciated.

Thankyou

Dazed_and_C0nfused

Sobeboy15 said:

Good Morning,

I have two NSI Bonds Maturing and I am wondering what to do with them with regards to the interest.  

I have rolled them over from last year so did not receive any interest payment.

Is the interest on these bonds liable for Tax in the financial year that it is accrued or does it become liable for tax when you actually physically receive the money?

Im in a dilemma (because of the new rates), wether to roll the principal and interest again or take out the interest element, or take out the whole amount Principal and Interest and invest in a higher rate account.

Im not sure when HMRC takes account for the interest wether its in the year its accrued or when its paid.

Any help would be appreciated.

Thankyou

It will taxed for the tax year NS&I report it for.

Which if it was added to your account when the term ended is likely to be when they report it for.

Keeping it within NS&I doesn't stop it being taxable income.

Hen1013

I am facing the same dilemma as you as I have a growth bond maturing today!! In regards to the tax - for self-assessment purposes it is the tax year you receive the interest ( so in my case it is the 25/26 tax year).
I have decided to remove both capital and interest as NS&I are only offering 4.1% to carry over and there are better deals out there like Spring at 4.3%. Hope that helps

NorthYorkie

You say "I have rolled them over from last year so did not receive any interest payment." Yes you did, the amount rolled over would have included interest on maturity and was taxable for that year, i.e. 24/25

molerat

They have not "rolled over", they have matured and you have reinvested the proceeds in a new bond of a different issue, old was issue 80 and new issue 85, with a different serial number.  You had the option to remove the interest therefore it is taxable in the current tax year.

Ozzig

Instead of letting them automatically "roll over", select the option to pay the amount of tax you owe into your nominated bank account and "roll over" the remaining amount ?

ColdIron

If you look at your statement(s) from NS&I you will see the interest for that year. The fact that you chose to reinvest that in a new bond is neither here nor there

Sobeboy15

Thanks for all your comments its really appreciated and helps me make my decisions.