Yes: you must pay tax every year on the interest income accrued, regardless of when it is received (in the event of a delayed distribution). Interest income is reported to you on a T5 slip, “Statement of Investment Income” each February and should be included on your annual tax filing. A copy is also sent directly to the CRA and can be accessed via the CRA MyAccount site. If you are the primary owner of the bond (the first or only name listed on the bond) you will need to pay all taxes owing on the earnings each year. If the bond is owned jointly both names will be included on the tax slip, please refer to the CRA rules on joint income before filing your return or consult a tax professional. If you purchased a bond as a gift on behalf of a related minor (including children, nieces/nephews and grandchildren) according to CRA rules the income is attributable to you and the tax slip will be issued in your name / SIN. If the child turns 18 before the bond matures please contact Gareth (email@example.com) to have the bond transferred into their name as the primary bondholder after which time the income will be paid & attributable to them. If you have any questions about your tax filing please contact a tax professional as we are not able to offer tax advice.