Have I understood gilts?

artyboy

SnowMan said:

Thanks interesting

Incidentally the tradeweb strip price shown above is essentially a theoretical price

Prices for strips
Mid-side prices for UK gilt strips are derived from a yield curve, which is fitted to the end-of-day gilt yields corresponding to the Tradeweb FTSE gilt prices.

https://www.lseg.com/content/dam/ftse-russell/en_us/documents/policy-documents/guide-to-the-calculation-of-tradeweb-ftse-gilt-closing-prices.pdf

It's ok, I've been warned off, not that it sounds like I could have bought it anyway.

Think I'll just put it all on red instead...

wmb194

poseidon1 said:

SnowMan said:

artyboy said:

I knew it was too good to be true. So apart from the fact that HL's website has it priced wrong, it's also taxable. Back to the drawing board then...

That's probably a historic price from when it was last traded. I know very little about strips but I doubt strips are easily purchasable (or even purchasable at all) by UK individual investors in any case.

I can confirm that the DMO now consider Strips unsuitable for small retail investors, so will not be accessible on retail platforms. Indeed from what I have ascertained trades in Strips seem confined to large institutions, with smaller historic residual retail holders able to sell but no longer buy.

Short term T Bills are the nearest equivalent but durations tend to be only 3 to 6 month, discounts are no way as deep and once bought must be held until maturity. See below an example of a recent issue hosted by HL -

https://www.hl.co.uk/shares/ipos-and-new-issues/3-month-uk-treasury-bill

Freetrade offers one month (actually 28 days) Treasury bills.

https://freetrade.io/treasury

Hattie627

Another gilt newbie here.

Could Reeves or a future Chancellor slap CGT on the capital gains from gilts? What's the chance that you buy now on the basis that your gain at maturity (but not, of course, the interest) will be tax free and before the maturity date the rules are changed to bring your capital gain within CGT?

Sorry if this is a stupid question.

wmb194

Hattie627 said:

Another gilt newbie here.

Could Reeves or a future Chancellor slap CGT on the capital gains from gilts? What's the chance that you buy now on the basis that your gain at maturity (but not, of course, the interest) will be tax free and before the maturity date the rules are changed to bring your capital gain within CGT?

Sorry if this is a stupid question.

Anything's possible but it would be unlikely. If you made the gains on gilts taxable you'd also have to make the losses available to offset gains elsewhere which would be a great wheeze: you could buy them above par and create no risk CGT losses whilst generating an overall positive return once you've added back coupons. IIRC there is a thread where it was discussed.