National Savings Bonds: Pensioners

HM Treasury written question – answered on 11th March 2015.

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Photo of Pamela Nash Pamela Nash Labour, Airdrie and Shotts

To ask Mr Chancellor of the Exchequer, if he will direct HM Revenue and Customs to issue guidance on whether 65-plus Guaranteed Growth Bonds cashed in following a bondholder's death will be subject to taxation.

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

65+ Bonds can be cashed in without penalty after the death of a sole, or last surviving Bond holder.

Information about the tax treatment of 65+ bonds is available in the brochure for the bonds, the terms and conditions under which the bonds are issued and in the annual statement issued to bond holders.

The income earned on the bonds is taxable and tax at the basic rate will be deducted when interest is added to a bond. This applies equally to any bond interest paid after the bond holder’s death. There is no capital gains tax charge when one of these Bonds is cashed in either by the original purchaser or the purchaser's legatee.

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