Generally, private investors cannot buy new bonds as they are issued but have to buy them on the secondary market which involves transactions costs and custody costs.
Interest income from Gov't Bonds is taxable but any Capital Gains are not - but then any Capital Losses cannot be offset against other gains.
If you had bought the bond at 90% of face value you make a CG. Bottom line is that State Savings are always better than govie bonds for the ordinary punter.Say you buy a Gov't bond and you hold it until maturity... at that stage, the face value is returned to you. So, even if CG was taxed there will be 0 CG?
If you had bought the bond at 90% of face value you make a CG. .
A bond has a maturity/redemption date. It might be referred to as a "May 2020". So in May 2020 the State or (say) Digicel promises to give you back your €100. The robustness of that promise (and other factors) then dictate the price, which is constantly changing. Irish State debt is more desirable than Digicel debt, so the markets price them accordingly.
You can buy them through a stockbroker. Inflation is likely to be the killer. And what about the risk of a default in the form of a redomination of the Euro debt into Punts?
Yes but it does not give rise to a charge for CGT. Revenue says: "not all disposals (of assets) give rise to a charge of CGT. For example, any gains arising in the following circumstances are not regarded as giving rise to chargeable gains and hence are not liable to CGT - Gains on Government Stocks and other securities (e.g. securities issued by certain semi-State bodies)." [broken link removed]If you had bought the bond at 90% of face value you make a CG.
(B) gives a return of .85% gross, of this .85% 3.25% (sic) is subject to income tax and the balance of -2.4% capital loss gets no CGT relief. The net return is c. -2% p.a. and that is before building in costs.
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