Guides to gilts and to using GiltIQ, written against the site's own data and pages.
The cash-flow analysis page takes the gilts in a portfolio, projects every remaining coupon and redemption, and groups the totals by UK tax year so the income and the capital that fall in each year can be read together.
The ladder designer applies a marginal tax rate to the rungs' coupon income, so this article shows what a stated band does to that income while the redemption-funded draw — a return of capital — is left untouched.
The taxable income report works per portfolio, so keeping a taxable account and an ISA or SIPP in separate portfolios lets it show taxable coupon income on one side and sheltered income on the other — the split a reader needs before any net yield or IRR figure means anything.
The personal savings allowance is a 0 per cent band that shelters the first slice of savings income automatically, so a gilt's net coupons are higher after the allowance than before it — and the difference is a per-year, per-person figure the coupon payment dates help pin down.
A disposal of gilts is exempt from capital gains tax for individuals, so a holding's realised P&L appears without any CGT line behind it — neither a gain nor a loss on a gilt enters a capital gains computation, which is a different thing from saying the price cannot fall.
For an additional-rate taxpayer there is no personal savings allowance, so the coupon bill is 45 per cent of the whole coupon, and on the same illustrative gilt the coupon keeps £2.20 for every £100 rather than the £3.20 the net income (20%) column shows.
For a higher-rate taxpayer the tax on a gilt coupon is 40 per cent of the coupon income after a £500 personal savings allowance, so on the same illustrative gilt the net income (20%) column no longer describes the bill — the coupon keeps £2.40 for every £100 before the allowance, and less after it.
For a basic-rate taxpayer the tax on a gilt coupon is 20 per cent of the coupon income after the personal savings allowance, so on an illustrative gilt paying 4.00 per £100, the net income (20%) falls to £3.20 for every £100 held.
Coupons are paid in arrears, so buyers and sellers share the interest between payment dates, and the accrued income scheme adjusts the taxable figure for the accrued amount paid on purchase and received on sale — which means the coupon income that meets the £5,000 starting rate for savings is the adjusted figure, not the gross coupons.
Both a gilt's coupon and a deposit's interest are savings income, so the savings allowances treat them alike, and the after-tax difference on one sum over one horizon comes from the shape of the return — a discount gilt delivers part of it as exempt capital, while a deposit's whole return is taxable interest.
The gilt is unchanged inside an ISA, but because the account shelters its coupons from UK income tax, the net redemption yield inside the wrapper matches the gross yield, while outside it the net figure falls by the tax on the coupon at the holder's band.
A gilt's coupon is savings income paid gross and taxed at the holder's marginal rate after the savings allowances, so this guide walks from the raw coupon to the net income and the net redemption yield, and then to the wrappers that can shelter the income altogether.