Post-tax yield comparison
70 conventional gilts, at four income tax rates
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.
Disclaimers.
- This tax treatment applies to an individual UK tax resident.
- Informational only; we do not guarantee the accuracy of the data.
- Not a substitute for professional tax advice.
Effective yield against maturity
All figures assume a T+1 settlement.