lizard

SAIM2440 sets out to clarify when interest on savings arises for tax purposes and so would be included on the tax return. Example 2 states that although the annual interest on a 5 yr bond is paid back into the bond, because the terms and conditions of the bond state that funds from the bond may be accessed with a penalty, the interest arises and is taxable yearly - i.e. the full amount of interest is not taken into account at the end of year 5. My question is - does this apply if the interest is paid into the bond annualy and the terms and conditions state that access to funds/interest from the bond is permitted in 'exceptional circumstances'.