registerme
Member of DD Central
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Post by registerme on Aug 24, 2023 7:45:19 GMT
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keitha
Member of DD Central
2024, hopefully the year I get out of P2P
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Post by keitha on Aug 24, 2023 8:52:40 GMT
like everything is a guess at the moment. 3 years ago you'd have grabbed anything offering 3%. IMHO I think 5.7 for 3 years is pretty good But what do I know, I took a 12 month regular savings at just over 3% back in November, this month when I went to transfer money over from the feeder account I was told I was moving to a lower interest account, I said I know but if i stop paying the interest drops to 0.1%
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Post by moonraker on Aug 24, 2023 9:24:28 GMT
I've a couple of fixed-rates maturing around now and can get at least 6% for two- and three-year renewals. But as I incline towards green-ism I'll look at the NSI bond.
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registerme
Member of DD Central
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Post by registerme on Aug 24, 2023 12:08:04 GMT
Am I right in thinking the income (interest payments) is tax free?
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james100
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Post by james100 on Aug 24, 2023 12:39:52 GMT
Am I right in thinking the income (interest payments) is tax free? No, its taxable and you get in a single payment after the bond term is up (I think). I'm quite interested in this.
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Post by Ace on Aug 24, 2023 12:46:55 GMT
Am I right in thinking the income (interest payments) is tax free? From FAQs:
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IFISAcava
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Post by IFISAcava on Aug 24, 2023 14:09:46 GMT
Am I right in thinking the income (interest payments) is tax free? no which is why I have my fixed term cash in 1-3 year low coupon gilts, as the capital gain is tax free and the coupon (which is taxable) is a tiny proportion of the return (0.125% - 0.375%). Yields have lessened recently but are still 4.5-5% after tax, which is a lot better than a taxable 5.7% for higher rate tax payers (and you have liquidity, at the price of possible small capital loss if gilt yields go up before maturity).
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registerme
Member of DD Central
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Post by registerme on Aug 24, 2023 14:16:30 GMT
I was lazy, which I apologise for. I could easily have looked for myself. I'm a little surprised though. There are other tax free NSI investments, and as you say gilts are tax free (which can make them attractive for higher rate tax payers).
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p2pfan
Member of DD Central
Full-Time Investor
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Post by p2pfan on Aug 24, 2023 15:05:07 GMT
Am I right in thinking the income (interest payments) is tax free? no which is why I have my fixed term cash in 1-3 year low coupon gilts, as the capital gain is tax free and the coupon (which is taxable) is a tiny proportion of the return (0.125% - 0.375%). Yields have lessened recently but are still 4.5-5% after tax, which is a lot better than a taxable 5.7% for higher rate tax payers (and you have liquidity, at the price of possible small capital loss if gilt yields go up before maturity). Thanks for the heads-up on gilts as a low-tax/tax-free investment. Where are the best places to buy them from?
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IFISAcava
Member of DD Central
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Post by IFISAcava on Aug 25, 2023 10:05:13 GMT
no which is why I have my fixed term cash in 1-3 year low coupon gilts, as the capital gain is tax free and the coupon (which is taxable) is a tiny proportion of the return (0.125% - 0.375%). Yields have lessened recently but are still 4.5-5% after tax, which is a lot better than a taxable 5.7% for higher rate tax payers (and you have liquidity, at the price of possible small capital loss if gilt yields go up before maturity). Thanks for the heads-up on gilts as a low-tax/tax-free investment. Where are the best places to buy them from? I use Interactive Brokers - £1 commission for a £1000 bond, with limit buying so you know the price you are paying.
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Post by mostlywrong on Aug 25, 2023 11:25:24 GMT
no which is why I have my fixed term cash in 1-3 year low coupon gilts, as the capital gain is tax free and the coupon (which is taxable) is a tiny proportion of the return (0.125% - 0.375%). Yields have lessened recently but are still 4.5-5% after tax, which is a lot better than a taxable 5.7% for higher rate tax payers (and you have liquidity, at the price of possible small capital loss if gilt yields go up before maturity). Thanks for the heads-up on gilts as a low-tax/tax-free investment. Where are the best places to buy them from? I conducted a little research on this but never followed through, so caveat emptor!
The Debt Management Office. CAREFUL. The first few results from Dr Google have absolutely nothing to do with the DMO.
The DMO offers gilt purchases to the public. But all it seems to do is push you through to its agent, Computershare Investor Services.
By the looks of it, it is a paper based transaction and was limited to £1,000 although that appears to have increased only recently.
If you read the documents, your heirs also get stung for a £40 release fee should you have the temerity to die whilst holding Chancellor Hunt's finest paper. A 4% charge for dying does not sound like good value to me.
A "recent" conversation on the Chat facility on Sharepad noted that HL. offered telephone dealing for gilts but only for sums in excess of £50k. Ouch.
I decided at that point that my heart wasn't really in it (and there is a back-story of gilts in the family history which I might share sometime) and stopped researching.
Ignoring the outlier, Sharepad shows that, today, the highest yielding Gilt is:
3.5% Treasury 2025 @ £96.52 which has a GRY of 5.22% to its redemption date of 22 Oct 2025. I have ignored the clean and dirty prices.
Your income will be taxed at your marginal tax rate. The capital gain (£100-96.52) will be tax free under current rules.
Dropping down the yield curve, I found:
0.125% Treasury 2026 @ £89.56 which has a GRY of 4.69%. Negligible income but a 10% tax free capital gain (in January 2026).
MW
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