Post-tax yield comparison

UK tax residents are typically exempt from Capital Gains Tax on gilts, while the coupons are subject to Income Tax. For an individual taxpayer it is therefore usually preferable to hold gilts with low coupons — and, likely because of that advantage, low-coupon gilts tend to trade at a lower gross yield than high-coupon ones.

Each band below is the same set of gilts repriced at that tax rate: the vertical gap between the bands at a given maturity is what the tax actually costs you.

The chart shows the four bands in force until 5 April 2027. The bands that replace them from 6 April 2027 (22/42/47%) sit two points above each of these and would plot almost on top of them, so the table carries every band instead.