ISA versus GIA Tax Drag
Identical portfolios, different tax. Dividend tax, CGT and turnover compound into a silent leak.
A Stocks & Shares ISA and a General Investment Account can hold the same funds. Tax does the damage, quietly, every year, then again on the way out.
ISA
£20,000 annual subscription (2026/27). Growth and income inside are tax-free. No CGT on exit. Unused allowance does not roll.
Dividends in a GIA
£500 dividend allowance, then 8.75% / 33.75% / 39.35% by band. High-yield portfolios leak even if you never sell.
CGT in a GIA
£3,000 annual exempt amount, then 10% or 18%/24% depending on asset and band. Turnover realises gains whether you needed the cash or not.
The drag
Tax paid is capital that never compounds. Over 20 years the gap is usually larger than people guess — run the optimiser.
Fill the ISA first. Use the GIA for overflow. The optimiser prices the cost of getting that order wrong.