General Investment Account

There’s no limit to how much you can invest in a General Investment Account, so it’s ideal if you’ve already used your ISA allowance. There are no restrictions on withdrawals from a General Investment Account, but you should be prepared to invest for at least five years.

General Investment Account

A General Investment Account (GIA) is an investment wrapper. It can be used if you’ve already maximised your ISA or pension contributions and you have more money to invest. Unlike ISAs and pensions, there’s no limit on how much you can invest in a GIA

There are no restrictions on when you can withdraw money invested in a GIA, but you should be prepared to invest for at least five-years.

You can invest in a wide range of funds, shares, investment trusts and exchange traded funds (ETFs).

Independent Financial Advice

No limit on the amount you can invest.

Access to a comprehensive range of investment funds.

No restrictions on withdrawals.

“We give candid, impartial, effective, plain English financial advice.”

Those who take financial advice are on average £47,000 better off than those that don’t

FT Adviser, November 2019

FAQ

Frequently Asked Questions

The information provided in these FAQs does not constitute professional financial advice. We strongly recommended that you consult a professional adviser before proceeding with a financial transaction.

How much can I pay into a General Investment Account?

There’s no limit to how much you can invest in a General Investment Account.

Is an investment in a General Investment Account a good idea?

If you’ve already used up your ISA (Individual Savings Account) subscription allowance for the current Tax-Year, and your pensions are fully funded, yes.

Bear in mind that the profits you earn on your ISA and pension investments are free from personal taxes whereas, in a General Investment Account, any gains you make will be assessed for Capital Gains Tax and any income you earn will be assessed for Dividend Income Tax.

The value of an investment and any income from it may fall as well as rise, and you may not get back the full amount you invest.

How does a General Investment Account make money?

You can invest in bonds, cash, collective investment funds, ETFs, or stocks and shares via a General Investment Account. Your preferred investments could grow either because the capital value of the investment has increased, because your investment has paid a dividend or a coupon which you’ve reinvested, or a cash holding has earned interest.

The value of an investment and any income from it may fall as well as rise, and you may not get back the full amount you invest.

How Is a General Investment Account taxed?

The gains you make in a General Investment Account are potentially taxable. In this context, gains are the profits you earn when you dispose of an investment, which means either selling it, giving it away to someone else, or swapping it for something else.

It’s the gain you make that’s taxed and not the money you receive. Any gains you earn are added to your income to determine your highest marginal tax-rate. If you make a gain which is greater than your annual Capital Gains Tax exemption (£12,300 for the 2022/23 Tax-Year) you pay Capital Gains Tax at the rate of 10% if you’re a basic rate taxpayer or 20% if you’re a higher rate taxpayer.

Dividends earned in your General Investment Account may also be taxable. You don’t pay tax on the dividend income you earn if it falls within your unused Personal Income Tax Allowance (£12,570 for 2022/23 Tax-Year) plus your dividend tax allowance (£2,000 for 2022/23 Tax-Year). Any dividends earned above these combined thresholds are taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate and 38.1% for additional rate taxpayers (whether reinvested or not). You need to report gains or dividends to HM Revenue and Customs (HMRC) through completion of a Self-Assessment form if the amount of your income or gains exceeds your personal allowances. Similarly, you must report details of any interest received on the cash element of your General Investment Account if it’s greater than your tax allowances.

As it’s possible to incur a tax liability you should ensure you take advice before making any sales from your General Investment Account. Assistance on completing your self-assessment tax return can be found on the HMRC website.

Note that this tax treatment depends on your individual circumstances and may be subject to change in future.

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Neil Jenkins owner of Fintegrity

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