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US Income Tax on UK Premium Bond Winnings?

US Income Tax on UK Premium Bond Winnings?

Old Aug 16th 2013, 3:07 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by robin1234
Wow that's amazing. I found my bond holders number in my files, and searched. I won £25 in November 2012.
Please send my finders fee


Originally Posted by robin1234
I knew my short term memory was piss poor
I'll be back next week for the same fee again
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Old Aug 16th 2013, 6:01 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by thinbrit
Please send my finders fee



I'll be back next week for the same fee again
Yeah whatever you'll get the same amount next week that you got this week
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Old Aug 17th 2013, 2:31 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

While you can hold them, if you won the million prize you might have a harder time trying to claim it. Ie they may require a lot more proof of residence. If they got wind of the fact you lived in America they may be able to wriggle out of paying.
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Old Aug 17th 2013, 4:09 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by MsElui
While you can hold them, if you won the million prize you might have a harder time trying to claim it. Ie they may require a lot more proof of residence. If they got wind of the fact you lived in America they may be able to wriggle out of paying.
Apparently one thing you can do is set the account up so that any prize is automatically rolled over into additional Premium bonds. (Probably not the best option with a very large prize!)

In my case, my bond holder account was set up maybe forty years ago, at an address that no longer exists. I can only set up online access to the account by first submitting a change of address form via regular mail, to a valid UK address like my sister's. Or I could simply do nothing, since my unclaimed prize will sit there indefinitely, waiting to be claimed when I am able to update my account ...
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Old Aug 17th 2013, 4:14 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by MsElui
If they got wind of the fact you lived in America they may be able to wriggle out of paying.
There is nothing in the terms and conditions that allows them to refuse to pay and if they tried, they would end up in court. However, the payment would most likely be taxable in the United States.
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Old Aug 17th 2013, 4:47 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by nun
If you are liable for US tax I think Premium Bond winnings would be taxed as gambling winnings.....there's a line on the 1040 for that. If you have more than $10k in your premium bonds account you'd have to file an FBAR.
Yes .. I've filed the FBAR for several years, because I have some foreign bank accounts. But I have to admit that I forgot to include my premium bonds. I only have a small holding of them, maybe twenty or thirty pounds in total. I suppose I should include them in future years. I know there are some people who (semi facetiously?) maintain that you should include that years highest balance on your TfL Oyster Card, too.
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Old Aug 17th 2013, 5:44 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by robin1234
In my case, my bond holder account was set up maybe forty years ago, at an address that no longer exists. I can only set up online access to the account by first submitting a change of address form via regular mail, to a valid UK address like my sister's. Or I could simply do nothing, since my unclaimed prize will sit there indefinitely, waiting to be claimed when I am able to update my account ...
I've had a problem setting up online access as well - I assumed it was because we were overseas, although I'm not sure why that should matter. We certainly have all the correct address info - just never got past the screen that says they will send a logon code or password or something. So I get all our PB winnings sent to my mams UK address, just because its easier for her to pop into the bank to deposit them, rather than the checks doing a double transatlantic trip.

All other correspondence from NS&I comes direct to our address here with no problems. I don't think there are any UK residence restrictions on ownership of most NS&I products - we have Index Linked, Fixed and Variable rate bonds as well as the PB, and they are fully aware of our residence situation on those.

I declare them all, but I have to say, I'm not sure whether our accountant files the PB winnings as gambling or overseas interest. There was a discussion about them when we first started, but can't remember what the outcome was - the point mentioned earlier about the stake not being at risk was raised, and I think on that basis he said to file it as interest, but I'm not sure. I guess it will all come out if we are ever audited!
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Old Aug 17th 2013, 7:44 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by Yorkieabroad
I've had a problem setting up online access as well - I assumed it was because we were overseas, although I'm not sure why that should matter. We certainly have all the correct address info - just never got past the screen that says they will send a logon code or password or something. So I get all our PB winnings sent to my mams UK address, just because its easier for her to pop into the bank to deposit them, rather than the checks doing a double transatlantic trip.

All other correspondence from NS&I comes direct to our address here with no problems. I don't think there are any UK residence restrictions on ownership of most NS&I products - we have Index Linked, Fixed and Variable rate bonds as well as the PB, and they are fully aware of our residence situation on those.

I declare them all, but I have to say, I'm not sure whether our accountant files the PB winnings as gambling or overseas interest. There was a discussion about them when we first started, but can't remember what the outcome was - the point mentioned earlier about the stake not being at risk was raised, and I think on that basis he said to file it as interest, but I'm not sure. I guess it will all come out if we are ever audited!
Looking at the NS&I website the other day, prompted by this thread, I was interested in their other products, such as indexed linked and fixed rate bonds. For the ones I looked at, it seemed that the issue was closed, no longer available. What do they still offer, do you know?
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Old Aug 17th 2013, 8:14 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by robin1234
Looking at the NS&I website the other day, prompted by this thread, I was interested in their other products, such as indexed linked and fixed rate bonds. For the ones I looked at, it seemed that the issue was closed, no longer available. What do they still offer, do you know?
I haven't bought new ones for a couple of years - hadn't realized they were closed at the moment. They have done that from time to time when they roll over the new rates, and I got an email a while back saying that the rates will go down again next month, so maybe that is it. Shame, because we've just sold a condo here, and looking for a reasonable home for the money until we buys something else. 1.25% doesn't really light my candle....
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Old Aug 18th 2013, 1:57 am
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Default Re: US Income Tax on UK Premium Bond Winnings?

If you live in the USA, you can't claim UK Premium Bond winnings. I know, it has just happened to me. I won, tried to claim and the law prevents them from sending money to the USA. In addition, once they know you live in the USA, they won't even pay it to a UK address unless you can prove residence. They advised me to cash in my bonds.
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Old Aug 18th 2013, 2:02 am
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by paul32x
If you live in the USA, you can't claim UK Premium Bond winnings. I know, it has just happened to me. I won, tried to claim and the law prevents them from sending money to the USA. In addition, once they know you live in the USA, they won't even pay it to a UK address unless you can prove residence. They advised me to cash in my bonds.
Read the terms and conditions, then consider whether you should take legal action against them. They may well have acted illegally. They have to pay into a United Kingdom bank account.
http://www.nsandi.com/savings-premium-bonds
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Old Aug 18th 2013, 2:56 am
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by JAJ
Read the terms and conditions, then consider whether you should take legal action against them. They may well have acted illegally. They have to pay into a United Kingdom bank account.
http://www.nsandi.com/savings-premium-bonds
Thanks for that. I've fired off an email to them straightaway.
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Old Aug 18th 2013, 8:58 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by robin1234
I know there are some people who (semi facetiously?) maintain that you should include that years highest balance on your TfL Oyster Card, too.
Robin, you might enjoy this. On cue, here's one of them. We can guess who the tax advisor might be.

http://www.economist.com/blogs/buttonwood/2013/08/tax

Last edited by theOAP; Aug 18th 2013 at 9:01 pm.
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Old Aug 19th 2013, 1:17 pm
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Default Re: US Income Tax on UK Premium Bond Winnings?

Originally Posted by theOAP
Robin, you might enjoy this. On cue, here's one of them. We can guess who the tax advisor might be.

http://www.economist.com/blogs/buttonwood/2013/08/tax
Excellent, thank you. As always with these articles, the comments are even more fun than the original article. Apparently you can put 4,900 pounds on your Oyster card .. For reasons of cash flow etc. I usually keep my available balance a bit lower than that.

The article mentions Post Office international reply coupons. I remember when my parents started to travel abroad, early sixties, they used to buy a dozen or so international reply coupons. That way, they could send postcards home from Switzerland without having to use scarce foreign currency (in those days you were limited in the amount of cash you could take abroad ... If you went to the bank to change pounds into foreign currency, the bank had to record the transaction in your passport to prevent double dipping.)
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