Lightyear Gilts

DRS1

Lastly, about documentation - Lightyear only show the price I paid to buy the bond, whereas Freetrade separates the dirty price from the accrued interest. Doesn't make a material difference, but I thought the amount of extra information offered by Freetrade was nice to have.

@fire_in_progress if you are buying in a GIA then accrued interest is a bit more than "nice to have" information. You will need it for your tax return.

fire_in_progress

https://forums.moneysavingexpert.com/discussion/comment/82173979#Comment_82173979

That's correct, of course.

I am speculating that all interest will be listed in the end-of-year statement, which can be used for the tax return.

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82173995#Comment_82173995

There isn't a contract note somewhere in the app showing the breakdown? This is basic stuff…

fire_in_progress

https://forums.moneysavingexpert.com/discussion/comment/82174026#Comment_82174026

Yes, I was looking at the trade confirmation note. See below for the relevant snippet.

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82174133#Comment_82174133

Okay, so that's showing the dirty price. You'll have paid 150 or 151 days accrued interest depending on whether Lightyear settles T+1 or T+2. It's annoying that it isn't broken out, clean + accrued.
I usually submit my tax return on 06/04 so waiting for brokers to get around to telling me things I should've known for certain when I made the trade in an annual tax statement - if it's there… - isn't something I'll put up with.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82173995#Comment_82173995

I think the problem is the end of year statement will show you the interest you receive but not the accrued interest you paid when you bought (and which you should deduct from the interest received to make sure you pay the right amount of tax). Sometimes it can be a small amount and you may not worry too much about it (eg if you have bought a low coupon gilt) but the coupon on T29 is highish.

TheTelltaleChart

You can calculate the accrued interest yourself, if you know the settlement date. Though I agree it really should be on the contract note.

e.g. if the settlement date is 151 days after the previous coupon payment date, and there are 184 days between the previous coupon payment date and the next one, and the annual coupon is 4%, then the accrued should be:

4% * 1/2 * 151/184 = 1.641304%

(the result is always rounded to 6 decimal places, up or down to the nearest value, and if they're equally near then up)

Then multiply the calculated percentage by the number of units you bought.

PixelPound

https://forums.moneysavingexpert.com/discussion/comment/82173979#Comment_82173979

It shows both clean and dirty price.

Also if you go into transactions, for each purchase it shows the clean price as well as the dirty price you paid.

They have a lot more info if you look.

slinger2

https://forums.moneysavingexpert.com/discussion/comment/82175864#Comment_82175864

Yes, I see that it's now there in the transaction log, which is extremely useful. Am I losing my marbles or is this a new feature that appeared very recently?

TheTelltaleChart

https://forums.moneysavingexpert.com/discussion/comment/82174770#Comment_82174770

Sorry, that was incorrect about the rounding. The percentage should be unrounded; and then when you multiply by the number of units bought, you should round to the nearest penny.

See the DMO's classic text, "Formulae for Calculating Gilt Prices from Yields – 4th edition" (at https://www.dmo.gov.uk/publications/gilt-market/formulae-and-examples/ ). 6 decimal places are used in some instances in SECTION TWO: CALCULATION OF DIVIDEND PAYMENTS ON GILTS, but not in SECTION THREE: CALCULATION OF ACCRUED INTEREST.

Not that it will make much difference.