Bond Interest Tax Calculator 2026
Calculate tax on bond interest income. UK government gilts, corporate bonds, NS&I savings bonds. Includes accrued income scheme, ISA exemption and declaring bond interest in self-assessment.
Bond Interest Tax Calculator
Interest from bonds (gilts, corporate bonds, NS&I bonds) is taxable as savings income. It is subject to the Personal Savings Allowance but otherwise taxed at your marginal savings rate.
Frequently Asked Questions
Is bond interest taxable in the UK?
Yes — interest from UK government gilts, corporate bonds, and NS&I fixed-rate bonds is taxable as savings income. It is subject to the Personal Savings Allowance (£1,000 basic rate, £500 higher rate) and your marginal savings rate.
Is gilt capital gain taxable?
No — capital gains from selling UK government gilts (and most corporate bonds listed on a recognised stock exchange) are exempt from Capital Gains Tax. They are 'qualifying corporate bonds'. However, the interest (coupon) payments are fully taxable.
When is NS&I bond interest taxable?
NS&I Guaranteed Growth Bonds and Income Bonds: interest is taxable in the tax year it is received (or credited). For fixed-term bonds where interest rolls up, it becomes taxable at maturity. NS&I reports interest directly to HMRC.
How do I declare bond interest on my tax return?
If you are in self-assessment, declare bond interest in the 'interest from UK banks, building societies and unit trusts' section of your SA100. If you are a PAYE employee, HMRC may adjust your tax code to collect tax on interest above the PSA.
Are bonds better held in an ISA to avoid tax?
Bonds held in an ISA (Stocks & Shares ISA or Cash ISA) produce completely tax-free income. For higher and additional rate taxpayers with bond interest exceeding their PSA, wrapping bonds in an ISA can save significant tax — especially with higher yields in 2024-26.
What is the accrued income scheme?
The accrued income scheme applies when you buy or sell interest-bearing securities between interest payment dates. It ensures the accrued interest (not yet received) is taxed at the right time for both buyer and seller. It applies to gilts and corporate bonds held outside ISAs.
Are Premium Bonds taxable?
No — NS&I Premium Bond prizes are completely tax-free and do not count toward the Personal Savings Allowance or any other income threshold.
Are offshore bond gains taxable?
Yes — gains from offshore life assurance bonds and similar products are taxed as income (not capital gains) when surrendered. The 'top-slicing' relief can reduce higher rate tax on long-term offshore bonds by spreading the gain over the years of investment.