Simon Lambert

If the yield goes up further and you bought a bond at this yield, then the price of the bond that you bought will fall.

Right.

So it temporarily you might end up with the money that you've put in down the capital you put in down.

But over the longer term, I could definitely see rates over the next 10 years coming down from here.

And if that happens and the yields fall, then the price of the bond goes up and you can make a capital gain.

And the capital gains that you make on gilts are capital gains tax free, which is why there's been quite a lot of interest from people buying short dated gilts to try and cash in on this.

Something we've talked about on the podcast before.

And I think we're going to see continued interest, as I said, from individual investors buying gilts direct.

Income tax.

The money that you pay on your earnings.

There are three official bans in England, Wales and Northern Ireland.

We're going to leave Scotland out of this and I apologise to anybody in Scotland.

But Scotland has its own rates of income tax and it's got more of them.

OK, so there's the 20 percent band.

Right.

Which is charged on earnings of twelve thousand five hundred and seventy pounds or more.

Right.

Up to that, you have your tax free personal allowance and you don't pay any taxes.

Basic rate is charged at 20 percent from twelve thousand five hundred and seventy one to fifty thousand two hundred and seventy.

Above 50,270, you then start paying the 40% rate, which goes up to 125,140.