Post-tax yield comparison

UK tax residents are typically exempt from Capital Gains Tax on gilts, while the coupons are subject to Income Tax. For an individual taxpayer it is therefore usually preferable to hold gilts with low coupons — and, likely because of that advantage, low-coupon gilts tend to trade at a lower gross yield than high-coupon ones.

Each series below is the same set of gilts repriced at one constant tax rate: the vertical gap between two series at a given maturity is what a rate difference costs you. The two rates announced for each UK band — 20% and 22%, and so on — bracket the figure a taxpayer in that band actually keeps, because coupons either side of 6 April 2027 are taxed at different rates; the table shows that blended figure for each band.

Gilt coupons are savings income. The 20/40/45% bands are the rates in force until 5 April 2027; from 6 April 2027 each rises by two points to 22/42/47%. Savings income is taxed at these UK rates wherever in the UK you live. The eighth series is the Scottish top rate: at 48% it applies to non-savings income only, so it can never describe a gilt coupon, and it carries no points. It is in the legend because the alternative — leaving one canonical band out silently — reads as a set of seven that happens to stop at 47%, and a reader cannot tell an omission from a rate that does not exist.

These figures assume every pound of the gilt's coupon income is taxed at your band. The Personal Savings Allowance (£1,000 at the basic rate, £500 at the higher rate and nothing at the additional rate) and the £5,000 starting rate for savings are not applied here, and both cover all of your savings income rather than only gilt coupons — so if the coupons below would fall within them, the 0% column is the one that applies to you.

The table page states the method these bands are solved on — the price basis, the settlement convention, the ex-dividend treatment and the accrued-interest relief.