Stocks & Shares ISA vs General Investment Account Calculator
Same investments, same platform, same returns — but one wrapper keeps every penny of growth, the other hands a chunk to HMRC every year. See exactly how big the gap gets over 10, 20 and 30 years.
After {years} years
Snapshot over time
| Year | ISA | GIA (net) | Saved |
|---|
How the tax drag on a GIA actually works
The core reason an ISA compounds faster isn't the tax on the final gain — it's the annual tax on dividends reducing the pot that keeps compounding. Every year, dividends above your £500 allowance are taxed at your marginal rate, so your GIA grows on a slightly smaller base than the ISA. Over 20+ years, that difference is substantial.
Dividend tax (annual, unavoidable)
For 2024/25 the dividend allowance is £500. Above that, dividends are taxed at 8.75% (basic rate), 33.75% (higher rate) or 39.35% (additional rate). Crucially, this applies to accumulation ETF units too — HMRC treats the "notional" dividends inside accumulation funds as taxable in the year they're distributed within the fund. You can't dodge dividend tax on a GIA by using accumulation units.
Capital gains tax (paid on sale)
The £3,000 CGT allowance for 2024/25 is much smaller than it used to be (£12,300 as recently as 2022/23). For gains above that: 10% basic / 20% higher-rate on non-property assets pre-Oct 2024, rising to 18% / 24% from 30 October 2024. If you hold a GIA for 20+ years without selling, you'll eventually face CGT on the whole accumulated gain unless you do Bed & ISA — selling in the GIA and immediately buying back in an ISA to rebase the CGT clock.
Worked example (default inputs)
£10,000 lump + £500/month for 20 years, 7% total return with 1.8% dividend yield, higher-rate taxpayer:
- ISA: ends around £300,000. Zero tax at any point.
- GIA: ends around £260,000–£275,000 after cumulative dividend tax + terminal CGT — the exact gap depends on the CGT rate assumed. That's ~£25,000–£40,000 handed to HMRC that could have stayed in your portfolio and kept compounding.
ISA types — quick reference
- Stocks & Shares ISA — up to £20k/year, invested in funds, ETFs, or individual shares. What this calculator models.
- Cash ISA — same £20k limit shared with S&S ISA, but held as cash earning interest. Tax-free interest.
- Lifetime ISA (LISA) — £4k/year sub-limit within the £20k, 25% government bonus, but 25% penalty on withdrawal for anything other than first home or after age 60.
- Innovative Finance ISA — peer-to-peer lending. Rare and risky. Same £20k limit.
- Junior ISA — £9,000/year for under-18s. Separate from your own £20k allowance.
Frequently asked questions
What's the difference between an ISA and a GIA?
A Stocks & Shares ISA is a tax-free wrapper: no income tax on dividends, no capital gains tax on growth, no tax on withdrawals — ever. A General Investment Account (GIA) is a regular brokerage account with no wrapper: dividends above £500/year are taxed at 8.75%/33.75%/39.35%, and gains above the £3,000 CGT allowance are taxed at 18%/24% (residential property) or 10%/20% (other assets, changing to 18%/24% from Oct 2024). Same investments, wildly different after-tax returns over decades.
What's the 2024/25 ISA allowance?
£20,000 per person per tax year across all ISA types combined (Stocks & Shares, Cash, LISA up to £4k, IFISA). It resets on 6 April each year and doesn't carry over — use it or lose it. A couple can put £40,000/year between them into ISAs. Unused GIA money can be gradually moved into the ISA over multiple years (Bed & ISA).
Is there ever a case where a GIA is better than an ISA?
Almost never for UK residents under the £20k annual limit. The only edge case is if you have specific loss-harvesting strategies (crystallising GIA losses to offset future gains) or if you've maxed the ISA allowance and need somewhere for excess capital. For essentially everyone else, an ISA is a mathematical no-brainer — even for low earners because the tax saving compounds over decades.
How does this calculator handle dividend tax?
GIA dividends above the £500 dividend allowance are taxed at your marginal rate: 8.75% (basic), 33.75% (higher), 39.35% (additional). The calculator assumes dividends are received each year and taxed each year (no reinvestment tax deferral — which matches accumulation units where dividends are still taxable each year despite being reinvested). ISA dividends are completely untaxed.
How does this calculator handle capital gains tax?
For the GIA, the calculator assumes you don't sell along the way (all growth stays unrealised) and applies CGT on the whole gain at the end of the projection period. It uses the £3,000 CGT allowance and either 10%/20% (basic/higher rate for non-property assets pre-Oct 2024) or 18%/24% (post-Oct 2024 rates). This is the friendliest possible GIA treatment — in practice regular rebalancing crystallises smaller gains along the way that eat into future compounding.
What return rate should I use?
The FTSE All-Share long-run real return (after inflation) is around 5% per year; the MSCI World is closer to 7%. Most calculators use 5–7% nominal; a conservative modern estimate for a global 60/40 or 100% equity portfolio is 5–6% real. Remember: past performance isn't a guarantee, and investing platforms often quote gross returns before their own fees (which can eat 0.3–1.0% depending on the platform + fund).
Does this account for platform fees?
No — the calculator uses gross returns. Real-world platform fees (0.15–0.45% for Vanguard/Trading 212/InvestEngine on index funds, 0.45% + fund cost for HL) reduce both the ISA and GIA final values by roughly the same proportion, so the tax saving comparison holds. But your actual final pot will be lower than the numbers shown — subtract 0.3–1.0% from your assumed return rate to model fees.
This calculator uses simplified projections. Investment returns aren't guaranteed and can be negative. Not financial advice — for personalised planning, speak to a regulated financial adviser.
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