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US Treasury bills

A UK taxpayer owns US Treasury bills issued at a discount and redeemed at their full value in less than a year. No interest is paid

Can someone please clarify the UK tax treatment of US Treasury bills? These are issued at a discount for maturity in less than a year and pay no interest. My first inclination is that the discount must be taxed as income (as if it were interest) in accordance with ITTOIA 2005 s 381.

However I am then not sure what the effect of possible exchange rate fluctuations would be including the outside possibility that there would be a dollar gain but a sterling loss.

Because they are denominated in US dollars it appears that they cannot fall within the definition of a corporate bond in TCGA 1992 s 117(1) but I wonder if there are special rules for foreign government securities or whether double tax agreements have any relevance.

I cannot find anything on the HMRC website or in my computer library which...

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