General Investment Accounts

GIA's can be used along with an ISA to help diversify your savings and allow you to reach your financial goals.

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This can allow you to still invest in a diversified portfolio managed by award winning portfolio managers.

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A GIA doesn’t have the tax perks of an ISA or pension, but you can still benefit from some personal allowances.   

 

Capital Gains Tax

When you sell your GIA investments you could face a Capital Gains Tax (CGT) bill. This is the tax you pay when you sell things like stocks, bonds or funds – and also other assets like antiques and investment property – that have increased in value.

But each tax year you also have a CGT allowance called the ‘Annual Exempt Amount’ - for 2023/2024 it’s £6,000. You’ll only have to declare any profit above that amount to HMRC. Then you’ll pay tax at the rates below:

• 10% for basic rate taxpayers

• 20% for higher rate and additional taxpayers

One way to mitigate Capital Gains Tax is to split the sale of anything in your GIA between tax years. That way you can make use of more than one Annual Exempt Amount.

 

Tax on dividends

If your GIA investments pay out cash dividends you may need to pay tax on these. Although each tax year you’ll get a dividend allowance – for 2023/2024 it’s £1,000 – and any dividends under that amount are tax-free.

You also won’t have to pay tax if your total income is less than the personal income tax allowance – this is £12,570 for 2023/2024.

Any dividends you get over your allowance are taxed at:

• 8.75% for basic rate taxpayers

• 39.35% for additional rate taxpayers

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If you want to find out more about your existing GIA or if you may be looking at investing into a new GIA, get in contact now.