HL treasury bills

flopsy1973

Hi thinking of applying for large chunk of treasury bills do they work in same way as gilts as in any gains will not be subject to CGT ?  As I am well over my PSA looking for ways to shelter money this tax year to avoid tax and doing a SA. Will this work ?

eskbanker

Letting the tax tail wag the investment dog is rarely a good idea!

wmb194

flopsy1973 said:

Hi thinking of applying for large chunk of treasury bills do they work in same way as gilts as in any gains will not be subject to CGT ?  As I am well over my PSA looking for ways to shelter money this tax year to avoid tax and doing a SA. Will this work ?

No, because they’re classified as deeply discounted securities gains are reported as interest. 

phlebas192

flopsy1973 said:

Hi thinking of applying for large chunk of treasury bills do they work in same way as gilts as in any gains will not be subject to CGT ?  As I am well over my PSA looking for ways to shelter money this tax year to avoid tax and doing a SA. Will this work ?

Treasury bills are classified as deeply discounted securities which means that the gain is taxed as interest.

DullGreyGuy

flopsy1973 said:

Hi thinking of applying for large chunk of treasury bills do they work in same way as gilts as in any gains will not be subject to CGT ?  As I am well over my PSA looking for ways to shelter money this tax year to avoid tax and doing a SA. Will this work ?

They are taxed as income not CG

ColdIron

flopsy1973 said:

Hi thinking of applying for large chunk of treasury bills do they work in same way as gilts as in any gains will not be subject to CGT ?  As I am well over my PSA looking for ways to shelter money this tax year to avoid tax and doing a SA. Will this work ?

They differ from gilts in several ways. Once invested you are locked in, there is no secondary market. They pay no coupon and the return comes from the difference between purchase and sale price. This gain is treated as income and not capital gains so I don't think they will shelter you from tax

jdl920p

Applications for the 3 & 6 month bills close later today.  Is there any advantage in buying these over putting money in a best buy savings account?  I am currently getting 4.55% in Chase

wmb194

jdl920p said:

Applications for the 3 & 6 month bills close later today.  Is there any advantage in buying these over putting money in a best buy savings account?  I am currently getting 4.55% in Chase

The advantage is that you'll have a fixed return versus a variable rate on the Chase account. The downside is that you have to hold Treasury bills for the full term.

Eyeful

Recognised tax shelters are:
(a) Pensions
(c) ISA's
(d) Premium Bonds

Have you filled all these up yet?

aroominyork

They are not "HL" treasury bills, they are government bills. Maybe you can buy them on HL, but you can also buy them on Interactive Investor and presumably other platforms too. On the question of whether they are worth it, others have explained they are taxed as income; I looked at the blurb and the estimated return was, from memory, between 4.1%-4.2%, so better options seemed available.

flopsy1973

Eyeful said:

Recognised tax shelters are:
(a) Pensions
(c) ISA's
(d) Premium Bonds

Have you filled all these up yet?

Yes all filled any ideas ?