Gilt Yield Calculator UK – Estimate Returns & Tax
Estimate your gilt yield and return
Gilt prices can look confusing because the price you see is not always the full price you pay.
This calculator estimates your gross yield, after-tax yield, coupon income, capital gain or loss, accrued interest, and total return assuming you buy today and hold the UK government bond to maturity.
Calculator Inputs
Ready to calculate
Enter the clean price, coupon rate, and maturity date on the left to see your estimated return.
How this gilt yield calculator works
To use this calculator, simply enter the clean price, coupon rate, maturity date, and your investment amount. You can usually find the clean price on your broker's platform or a financial data website.
- We estimate the dirty price and accrued interest to calculate exactly how much nominal value your cash will buy.
- We map out all expected future cash flows, including regular coupon payments and the final £100 redemption at maturity.
- We apply an internal rate of return (IRR) calculation to estimate your Yield to Maturity (YTM) and your projected after-tax return.
Gilt return breakdown
1. Clean price
The quoted market price without any built-up interest.
2. Accrued
Interest owed to the seller. Clean price + accrued = dirty price.
3. Coupons
The regular fixed income payments you receive over time.
4. Redemption
The final payout at maturity, usually exactly £100 per gilt.
Why clean price and dirty price matter
When you look up a gilt on your broker's app, you usually see the clean price. However, because gilts pay interest every six months, interest builds up ("accrues") every day between payment dates.
If you buy a gilt halfway through a coupon period, you must compensate the seller for the interest that has accrued since the last payment. The clean price plus this accrued interest equals the dirty price — which is the actual cash amount you pay.
Which result should you look at?
| Result | Best for | Why it matters |
|---|---|---|
| Yield to maturity | Comparing different bonds | Shows your total annualised return including both the coupons and the capital gain (or loss) at maturity. |
| After-tax yield | Comparing with savings accounts | The most realistic number for higher-rate taxpayers investing outside a tax wrapper. |
| Running yield | Income seekers | Shows the income you receive as a percentage of the clean price, ignoring capital gains. |
| Capital gain | Tax efficiency | Capital gains on qualifying UK gilts are generally exempt from CGT, making low-coupon gilts attractive. |
Important limitations
This is an estimate: The calculator assumes you hold the gilt to maturity and that you can buy fractional amounts perfectly. In reality, you buy nominals in whole increments and your broker's execution price, spread, and fees may differ.
Selling early: If you sell before the maturity date, your actual return will depend heavily on the market price on the day you sell.
Not financial advice: Tax rules depend on your individual circumstances and may change. Always consult a qualified professional or read official HMRC/GOV.UK guidance before making tax-based investment decisions.
Frequently asked questions
What is a gilt yield calculator?
A gilt yield calculator is a tool that estimates the annualised return (Yield to Maturity), coupon income, and capital gain from buying a UK government bond and holding it to maturity. It accounts for the clean price, dirty price, and accrued interest.
How do I calculate the yield on a UK gilt?
To calculate the yield on a UK gilt, you need to know its clean price, coupon rate, and maturity date. The calculator determines the dirty price by adding accrued interest, then maps out all future cash flows (coupons and final redemption) to find the internal rate of return (YTM).
What is the difference between clean price and dirty price?
The clean price is the quoted market price of the gilt excluding any interest that has built up since the last payment. The dirty price is what you actually pay; it is the clean price plus the accrued interest.
Are capital gains on gilts taxable?
For individual UK investors, capital gains on qualifying UK government gilts are generally exempt from Capital Gains Tax (CGT). However, coupon income is usually taxable unless the gilt is held in a tax-free wrapper like an ISA or SIPP.
Why can low-coupon gilts be tax efficient?
Low-coupon gilts often trade below their £100 nominal value (par). When they mature at £100, the uplift is a capital gain, which is generally tax-free for individuals. Because the taxable coupon is low, a larger portion of the total return comes from the tax-free capital gain.
Does this calculator work for index-linked gilts?
No. This tool is designed for conventional UK government gilts, which have fixed coupons and a fixed redemption value. Index-linked gilts require inflation assumptions to estimate future cash flows accurately.