Index linked gilt tax question

Ciprico

For ilg are both the indexed linked element of the coupon and the index linked element of the gain both untaxed.

So is a low coupon ilg roughly equivalent a normal gilt in regards to reducing overall tax on interest when compared to regular cash savings accts...?

masonic

I'd consider a low coupon ILG better in regard to reducing overall tax on interest when compared to a nominal gilt. Though it does depend on there being positive inflation.

Though it's a slightly higher hurdle to get a better overall return than a nominal gilt: if inflation turns out to be much below the breakeven rate at the time of purchase, then you'd probably have been better off with a nominal gilt.

DRS1

The whole coupon is subject to income tax including the index linking on the coupon.