The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
‘Gilts’ are securities that are also known by a number of different names (eg gilt-edged securities, Government securities or treasury stock).
The Government sells gilts to fund the deficit between public spending and tax receipts. Normally, the Government pays interest to the holder of the gilt and the interest rate varies considerably depending on the issue. The rate can be fixed or linked to the retail prices index.
Interest on gilts bought on or after 6 April 1998 is payable gross (unless an application is made by the holder to the Bank of England for net payment).
Interest from gilts is savings income for the purposes of the income tax calculation, and so the savings income tax rates apply, including the starting rate for savings and the savings nil rate band. See the Taxation of savings income guidance note. However, gilt interest is reportable in boxes 1 to 3 on page Ai1 of the additional information supplementary pages rather than on the main tax return.
Gilts are a popular way of funding future known commitments, such as school fees. They have the added advantage of being fully-guaranteed by the Government (whereas only the first £85,000 of bank savings per institution is reimbursed under the financial services compensation scheme). The low-risk nature of gilts means they are popular investments for people approaching retirement age. However, to give advice to a client on his investment strategy, the adviser must be authorised to give investment advice by the Financial Conduct Authority. See the Regulated investment advice guidance note.
Other interest reportable in boxes 1 to 3 on page Ai1 of the additional information supplementary pages includes income from bonds, loan notes (also known as loan stock) or similar securities issued by UK companies, local authorities or bodies in the UK.
Whether this savings income is taxable in the UK depends on the circumstances of the individual and whether the income is paid by a UK resident payer
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Normal due dateIndividuals are required to pay any outstanding income tax and Class 4 National Insurance, Class 2 National Insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2021 for the 2019/20 tax year). From 6 April 2020, UK
The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are
Time for paymentTwo statutory rules apply on death:•tax is ‘due’ six months after the end of the month of death and carries interest from the ‘due’ date until paidThere is a possibility of payment by instalments, but this applies to certain types of property only ― see the ‘Availability of
This guidance note considers the capital gains tax implications where shares are sold in exchange for new shares.The consideration paid by a purchasing company to the shareholder(s) for their shares in a target company could be in the form of either:•new shares in the vendor in exchange for shares
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.