A settled gilt trade comes down to one equation — the dirty price paid equals the clean price plus accrued interest — and the settlement date, the nominal and any dealing cost all hang off it.
From order to settled holding
A gilt purchase runs from the order to the settled holding in a few steps. You agree a price and a nominal with your provider; the deal is booked on a trade date; it settles a short number of business days later; and from settlement the gilt, and the right to its coupons, is yours, subject to the ex-dividend rule. Each step fixes a figure the next one uses.
Seeing the steps in order is what makes the figures make sense: the price is agreed first, the accrued interest is measured to the settlement date, and the cash is the two added together with any dealing cost added.
The three prices that decide the cash
Per £100 nominal, the clean price is the gilt's own value, accrued interest is the slice of the next coupon built up to settlement, and the dirty price is the two added together — the cash paid. For an index-linked gilt the dirty price is then scaled by the index ratio. That equation holds for every gilt on the list: dirty equals clean plus accrued, and the cash is the dirty price times the nominal.
The dirty price is the clean price plus the accrued interest. It is the amount of cash that changes hands, per £100 nominal, on the day of settlement.
Dirty equals clean plus accrued is not a convention that varies by gilt; it is the definition that makes the three figures consistent. The clean price is what the market quotes for the gilt's own value, the accrued interest is the interest owed to the seller, and the dirty price is the sum — the cash. A contract note that failed to add up this way would be misstating one of the two inputs.
For an index-linked gilt the same equation holds with the index ratio applied, scaling the coupon and the redemption alike. So the check — clean plus accrued, scaled, then times the nominal — works for every gilt on the list, which is what makes it a reliable way to confirm a settlement rather than a rule of thumb for one kind of gilt.
The settlement date
The settlement date is the trade date plus the market's settlement delay, counted in business days, stepping over weekends and UK bank holidays. The site uses the delay on your profile — T+1 or T+2 — so a booked trade resolves to a settlement date rather than leaving it to be typed. That date is also the point accrued interest is measured to, which is why the two are handled together.
Because the settlement date drives the accrued interest, the two are always read together. A booking that shows an unexpected cash figure is usually one whose settlement date lands later than expected — around a weekend or a bank holiday — rather than one with a wrong price.
A worked trade
The figures here are illustrative and every input is stated; none is a current price. Buy £1,500 nominal of a conventional gilt at a clean price of 97.50, with accrued interest of 1.10 per £100 nominal, settling two business days after the trade.
| Step | Working | Result |
| Clean price | 15 × £97.50 | £1,462.50 |
| Accrued interest | 15 × £1.10 | £16.50 |
| Dirty price (cash) | £1,462.50 + £16.50 | £1,479.00 |
| Dealing cost | Per the provider | Added to or netted from the cash |
The dirty price paid — £1,479.00 — equals the clean price plus the accrued interest, and that is the whole of the settlement arithmetic before any dealing cost. Checking a contract against those three lines is how a settlement is confirmed.
After settlement
Once settled, the holding appears in a portfolio, and the coupons that fall due are paid to whoever holds the gilt. Whether the next coupon is yours turns on the ex-dividend date: a trade settling on or after that date leaves the next coupon with the seller. The trades ledger keeps the settlement date with the booking, and the record-a-trade form derives the dirty price from the clean price and accrued interest.
From settlement the cash-flow and income reports pick the trade up, because they work from the settlement date and the coupons it brings. A trade booked but not yet settled is still a trade on the ledger; settlement is what starts the clock on the coupons it will receive.
A reader checking a statement against the ledger should find, for each settled trade, the settlement date, the nominal, the dirty price and any dealing cost. Where one of those is missing from the statement, the ledger is the place to look, because that is where the booking's own figures are kept.
What changes if the trade is a sale
A sale runs the same arithmetic in the other direction. The seller receives the dirty price — the clean price plus the accrued interest they have earned to settlement — and hands over the gilt. The buyer pays that same dirty price, and the accrued interest is the slice the seller accumulated rather than a bonus; it is part of the price of the coupon the buyer will soon collect in full.
The ex-dividend rule bites on a sale as it does on a purchase. A sale settling on or after the ex-dividend date leaves the next coupon with the seller, who has already been paid the accrued interest for it through the price. Selling before that date passes the coupon to the buyer instead, and the accrued interest in the price reflects the shorter accrual.
Background, not advice
This guide explains how a gilt trade settles from order to holding; it is general background, not investment, tax or legal advice for any reader's circumstances. The figures above are illustrative and state their inputs, a price can move before maturity, and the contract note and the gilt's own record are the primary sources for a real settlement.