Gilt Edged Securities
What are Gilts?
Gilt Edged Securities or Gilts are bonds issued by HM Treasury. They are designed for people who want a predictable rate of income at very low risk.
Typically, a Gilt can be bought or sold at anytime for the present market price with no penalties. Once maturity is reached, the stock is bought back by the Government at face value. It should be noted that when a Gilt gets closer to redemption, the price of the Gilt moves towards the redemption value. This is known as the 'pull to redemption'
Although Gilts are known for their security and are viewed as the safest of investments, there is still an element of risk and several factors can affect their value such as inflation, interest rates and the time left until maturity.
| Five Key Benefits of trading Gilts with Halifax Share Dealing |
| 1. An extremely reliable and secure investment with a guaranteed return issued by HM Treasury. |
| 2. Gilts are free from Capital Gains Tax |
| 3. Conventional Gilts are a liability of the Government which guarantees to pay the holder of the gilt a fixed cash payment (coupon) until the maturity date, at which point the holder receives the final coupon payment and the return of the principal deposit. |
| 4. Index-linked Gilts are similar to Conventional Gilts however they differ in that the coupon payments are adjusted in line with the UK Retail Prices Index (RPI). This means that both the coupons and the redemption of these gilts are adjusted to take account of inflation. |
| 5. The name of a Gilt includes the interest rate which you will receive for added transparency |
Which accounts can you hold Gilts in?
Share Dealing Account - the simple way to trade UK listed Gilts
Self-Select Stocks & Shares ISA - hold ISA eligible Gilts in a tax efficient ISA and prevent your gains from going to the taxman!*
SIPP - invest for your retirement with a tax efficient pension scheme
*Subject to there being 5 years or more left until maturity
Next Steps
Apply now - for an account
Transfer in your investments from another broker to Halifax Share Dealing
