Which tax year a gilt coupon lands in

A gilt's half-yearly coupon counts towards the UK tax year that contains its payment date, not the year you bought or sold it, so mapping a holding's payments to the right return is a question of dates rather than dealing.

The payment date decides the tax year

A conventional gilt pays its coupon in two half-yearly instalments, and each instalment is savings income in the UK tax year that contains its payment date. The UK tax year runs from 6 April to 5 April — checked against GOV.UK and HMRC for the 2025/26 tax year — so a coupon paid on 5 April belongs to the year that is ending and one paid on 6 April belongs to the year that has just begun, even though they are a single day apart.

What does not move the line is the trade: the year a reader buys or sells the gilt has no bearing on which return a given coupon lands in. A coupon is taxed when it is paid, and the payment date is printed on the gilt's own schedule, so the mapping is fixed the moment the schedule is known rather than decided at dealing.

Most conventional gilts pay two coupons a year, six months apart, so in an ordinary year a holding receives two payments. Both usually fall in the same tax year, but they do not have to: a gilt whose payment dates straddle 5 April can pay one coupon into one year and its next into the following one, so a single holding can appear in two returns with no dealing in between. The dates on the schedule, not the rhythm of the holding, decide it.

Buying late does not pull the coupon forward

A frequent surprise is the gilt bought in March of one tax year: it still pays its next coupon in the year that follows, because the payment date sits after 5 April. A holding bought near the end of a tax year can therefore carry its income into the next return without any further dealing, and a holding held across the boundary appears in two returns rather than one.

The income per £100 does not change with any of this. A gilt paying £2.00 on every £100 nominal at each half-yearly date pays that same amount whenever the payment falls; only the year it is counted in depends on the calendar. Timing is the whole of the question, not amount.

Mapping a year of coupons

The table takes an illustrative gilt paying on 1 May and 1 November and shows which tax year each payment lands in. The dates are illustrative and not a quote from any gilt, but the rule they apply is the statutory one for the 2025/26 tax year.

Reading the two boundary rows together is the point: the same gilt, the same coupon amount, and a single day that parts two tax years. A reader who maps payments by payment date never has to reason about which return a coupon belongs to; the date in the row answers it.

Accrued interest changes the amount, not the year

When a gilt is bought or sold part-way through a coupon period, the buyer pays the seller the accrued interest that has built up since the last payment. That figure changes how much taxable interest the trade produces, but it does not change which tax year a coupon lands in: the coupon is still counted in the year of its payment date, and the accrued interest is handled as an adjustment to that year's taxable figure under the accrued income scheme rather than as a separate dated payment.

So the two questions are separate. The calendar of payment dates answers which year a coupon belongs to; the accrued interest answers how much of that coupon is taxable once the slice already paid over at purchase has been taken off. Keeping them apart stops a reader from trying to move a coupon between years on the strength of a dealing date.

It is worth holding the two ideas apart because they fail in different ways. Miss the payment date and a coupon lands in the wrong tax year, which is a calendar error; miss the accrued adjustment and the coupon lands in the right year but the taxable figure is wrong. A correct return needs the date and the adjustment both right, and keeping them in separate columns is how the report lets a reader check each one.

Where the dates are laid out

The income calendar lists the coming coupon and redemption dates as events in their own right, so the payment dates that decide a tax year can be read forward rather than reconstructed after the fact. The taxable income report then takes the trades booked in your portfolio and groups each coupon and disposal into the tax year its payment date falls in, so the calendar and the report answer the same question from opposite ends.

Read together, they turn a schedule into a return. The calendar says when each coupon will be paid; the report says which year received it and what taxable interest it produced once the accrued interest was netted off. A reader who has both can see a coupon coming and, when it lands, see exactly which year it joined.

Background, not advice

This article explains how a gilt's coupon dates map to a UK tax year; 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-year dates stated are for the 2025/26 UK tax year and come from GOV.UK and HMRC; the illustrative payment dates are not a quote from any gilt. GOV.UK, HMRC and the Debt Management Office are the primary sources for a real coupon date, tax rule or tax-year boundary.