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.
One report, two kinds of portfolio
A reader can hold gilts in more than one place: a taxable account whose coupons count as savings income, and an ISA or SIPP whose coupons do not count as taxable income at all. The taxable income report is built for the first of these. It sums the taxable coupon interest a portfolio produced in a chosen UK tax year, so a portfolio that holds wrapped gilts is kept separate from a taxable one, or its income would be summed into a figure that is not taxable.
That is the whole discipline the report asks for: scope it to the taxable portfolios, and leave the wrapped ones out. Done that way, one report gives the taxable income per portfolio without blending in income that does not belong on a return.
What it adds up, portfolio by portfolio
For a taxable portfolio the report takes the trades booked in it and, for the tax year, adds the coupon interest received, adds the accrued interest received when a gilt is sold, and subtracts the accrued interest paid when one is bought. The table shows the shape of it for an illustrative taxable account beside an ISA; the figures are illustrative and not a quote from any gilt.
| Portfolio | Coupons received | Accrued paid | Accrued received | Taxable income 2025/26 |
| Taxable account | £2,000 | £90 | £60 | £1,970 |
| ISA or SIPP | £2,000 | — | — | Not taxable income |
The taxable account's £1,970 is the £2,000 of coupons less the £90 of accrued interest paid at purchase, plus the £60 received at sale — the accrued income scheme applied to the booked trades. The wrapped account holds the same kind of gilt and pays the same coupons, but because income inside a wrapper is not taxable, it does not belong in the taxable figure and is shown as such.
Why the split has to come first
Every after-tax figure depends on knowing which income is taxable. The net redemption yield on the gilt lists is the yield after income tax on the coupons, which is a figure for a taxable holding; inside a wrapper the coupons are not taxed, so the net redemption yield there matches the gross. Blend a taxable portfolio and a wrapped one into a single report and neither statement can be made cleanly: the taxable figure would be overstated by the wrapped income, and the net yield would be applied to income that is not taxed at all.
So the split is not tidiness for its own sake. It is what makes the taxable figure in the report the correct base for a reader's savings allowances, and what lets the net yield and the net income columns describe a taxable holding accurately.
There is a practical side to this as well. A reader who keeps a taxable account and a wrapper in one portfolio gets a report that has added taxable and sheltered income together, and neither the taxable figure nor the net-yield comparison can be trusted, because part of the total is not taxed and part is. Splitting the portfolios is small housekeeping that makes the report's per-portfolio figure mean what it says, and it costs nothing but a moment's tidying when the holdings are first booked. The report then shows each side on its own terms rather than one blended total that answers neither question.
Net yield for the taxable side, IRR for the cash
Two measures sit on either side of the split, and it helps to know which is which. The net redemption yield is a tax-aware figure: it is the return on a gilt after income tax on the coupons, and it belongs with the taxable side, where the coupon is actually taxed. The IRR since inception is a cash measure: the internal rate of return on the actual money in and out of a portfolio, computed from dated cash flows, and it carries no tax adjustment of its own.
That makes them answer different questions. The net redemption yield answers what a taxable gilt's coupons keep after income tax; the internal rate of return answers what the portfolio's cash flows have produced, whatever the tax treatment around them. A reader comparing a taxable holding with a shelved one can use the net yield for the taxable side and the gross for the sheltered side, while the IRR remains the same kind of cash figure for both.
Where the report and the figures live
The taxable income report is the per-portfolio view: scope it to the taxable portfolios and it sums each one's coupon and accrued interest into a taxable income figure for the tax year, with the per-trade detail underneath. The post-tax yield page carries the net redemption yield and net income at a range of bands, which are the after-tax figures for the taxable side of the split.
Read together, they keep the two kinds of income apart: the report for the taxable portfolios, and the tax page for what a taxable gilt's coupon keeps. The wrapped portfolio needs neither, because its income is not taxed, and the portfolio page shows it on a cash basis through its IRR.
Background, not advice
This article explains how the taxable income report separates taxable from sheltered income; it is general background, not investment, tax or legal advice for any reader's circumstances, and it is not a substitute for professional tax advice. The tax treatment described is the general position for a UK resident for the 2025/26 UK tax year, sourced from GOV.UK and HMRC; the figures above are illustrative and state their inputs. GOV.UK, HMRC and the Debt Management Office are the primary sources for a real rule, coupon or accrued figure.