We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide

Index linked gilt tax question

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...?


Comments

  • masonic
    masonic Posts: 29,175 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 6 September 2025 at 11:11AM
    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
    DRS1 Posts: 2,728 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    The whole coupon is subject to income tax including the index linking on the coupon.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 353.8K Banking & Borrowing
  • 254.3K Reduce Debt & Boost Income
  • 455.2K Spending & Discounts
  • 246.9K Work, Benefits & Business
  • 603.4K Mortgages, Homes & Bills
  • 178.2K Life & Family
  • 261K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 37.7K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.