Enter the gilt's clean price, coupon and years to redemption - all published by the Debt Management Office. Gilts redeem at £100 par and pay coupons twice a year.
Below £100 = tax-free gain to par
Paid half-yearly, taxable
Your PSA is £1,000 (basic), £500 (higher) or £0 (additional). Enter what is not already used by bank interest - it shelters part of the coupon.
Your after-tax gilt yield
a bank would have to pay gross to match it
How the return splits
Over years, roughly of your total return is the tax-free rise to £100 par and is taxable coupon. Only the coupon is taxed - gilt capital gains are exempt from Capital Gains Tax for individuals.
Estimate only, not investment advice. Gilt prices move daily.
Same headline rate, very different outcome: the savings account is taxed on every pound of interest, while most of the gilt's return is the tax-free climb to par.
The same gilt, priced at , kept after tax in each band (PSA assumed used elsewhere):
| Tax band | Gilt after-tax yield | Savings at same gross, net | Gilt advantage |
|---|---|---|---|
Inside an ISA or SIPP the whole gross yield of is tax-free, coupon included.
| Scenario | Gross YTM | After-tax yield | Equiv. savings rate | |
|---|---|---|---|---|
Gilt Yield Calculator (After-Tax) by TaxFly — free UK tax calculators