1.What is the LEAST expensive way to buy British Treasury Bills (NOT
in a Mutual Fund) by a US Citizen residing in the US?
2. Can one go over to a British Bank in London and purchase British Treasury Bills?
3. Is there a MINIMUM Limit of Purchase of the T-Bills?
4. Is there a MAXIMUM Limit of Purchase without going through
Institutional Investors?
5. Are they to be purchased in Sterling or Dollars?
6. At time of maturity would they be cashed out in Sterling or Dollars?

British government securities are called gilts.  The publication
"Investing in Gilts-The Private Investor's Guide to British Government
Stock" UK Debt Management Office
http://www.dmo.gov.uk/gilts/retail/f2ret.htm provides considerable
information about purchasing and selling gilts.  They can be purchased
through banks or stockbrokers in the secondary market, at auction
through the Debt Management Office, or by mail through Computershare,
which operates a service similar to the Treasuries Direct service in
the United States.

The publication notes that "commission charges, particularly for
smaller transactions, may be lower than charges made for buying or
selling through a stockbroker or bank..." when using the Computershare
service.  There are different commission brackets for purchases of
less than £5000 and for purchases of greater than £5000.  "Purchase
and Sale Service Terms and Conditions" UK Debt Management Office
http://www.dmo.gov.uk/gilts/buysell/buysellterms.pdf.  I have been
unable to locate any minimums or maximums for the service.  The
Application to Purchase does not list any
(https://www-uk.computershare.com/Content/download.asp?docId={AB2D937B-4502-48B2-B6B4-14360E70EED6}&cc=UK&lang=en&bhjs=1&fla=1&theme=cpu).
You can direct any questions you have about this service to:

"Computershare Investor Services
PO Box 2411
The Pavilions
BRISTOL
BS3 9WX

You can talk to a representative by calling 0870 703 0143 (between 9am-5pm GMT)"

"Contact Us" Computershare Ltd. (2005)
https://www-uk.computershare.com/Investor/Gilts/Default.asp

Noncompetitive auction bids from the public require bids of between
£1000 and £500,000 for conventional gilts and no more than £250,000
for Index-linked gilts.  Bids must be submitted in a multiple of
£1000.  No commission is payable.

Investors wishing to purchase more than these maximums must submit a
competitive bid.  Such investors run the risk of not receiving their
full order if their bid is too low.  Again, no commission is payable
for auction purchases.

Regardless of the three methods presented above that is chosen, a
purchaser must be a member of the "Approved Group" of investors.  This
process requires potential investors to provide information to
establish their identities.  The application form for overseas
individuals is located at "Overseas Individual Approved Group
Application Form" Computershare
https://www-uk.computershare.com/Content/download.asp?docId={573FBBCC-BFC6-4769-BDC3-BDD989133920}&cc=UK&lang=en&bhjs=1&fla=1&theme=cpu.
 Purchasers through banks and brokers do not appear to be subject to
this requirement.

Additional information about buying and selling gilts as a retail
investor can be found at "Gilts Market Retail" UK Debt Management
Office http://www.dmo.gov.uk/gilts/retail/f2ret.htm.

All purchases, sales, and interest payments are made in pounds
sterling.  A brief summary of gilt information can be found at "UK
Government Bond Market - introduction"
http://www.liffe.com/products/bonds/longgilt/giltmarkets.htm
Sincerely,

Wonko

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