Accrued Income Scheme (AIS) tax analysis

This sums coupon payments plus the accrued interest received on sales and deducted on purchases, under the UK Accrued Income Scheme. Capital gains on gilts are excluded - they are CGT-exempt for individuals. Two rules that are easy to get wrong:

• Timing. A trade's accrued interest belongs to the tax year of that security's next coupon date, not the settlement date - so a purchase settled just before 5 April, with its next coupon after it, is carried into the following year.
• No cross-security netting. A loss on one gilt only ever offsets interest on that same gilt, never a different one - which is why the breakdown below is by security.

The £5,000 threshold. The scheme only applies if the total nominal value of your gilts (and other accrued-income securities) exceeded £5,000 at some point in the tax year or the previous one. Below that, you are simply taxed on the coupons you receive and accrued interest on trades is ignored. See HMRC's HS343 Accrued Income Scheme helpsheet. Holding gilts in an ISA or SIPP? Tick only your taxable accounts in the selector above, and save them as a group to come back to them in one click.