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Investing outside ISAs — the GIA survival guide

Capital gains tax, dividend tax and the paperwork that comes with an unwrapped account — and how to shrink all three.

When you’d invest unwrapped at all

A general investment account (GIA) is just investing with no tax wrapper: no £20,000 limit, no rules — and no protection. It exists for money that has already filled the year’s ISA allowance and appropriate pension contributions. If you haven’t used those first, stop here and read the ISA guide: a GIA should be the overflow, never the default.

The two taxes that apply

Capital gains tax (CGT) is charged when you sell (or otherwise dispose of) investments at a profit. Everyone gets a £3,000 annual exempt amount; gains above it are taxed at 18% (basic-rate taxpayers) or 24% (higher/additional rate). The allowance was £12,300 as recently as 2022/23 — its collapse is why unwrapped investing now needs actual management rather than benign neglect.

Dividend tax is charged on dividends as they arrive, whether or not you reinvest them. The allowance is a token £500; above it, rates are 10.75% / 35.75% / 39.35% by band (the lower two rose by 2 points in April 2026). A global tracker yields roughly 2%, so an unwrapped portfolio of about £25,000 already breaches the allowance.

Interest from bonds, gilts and money market funds is taxed as savings income instead — which can be useful, since the personal savings allowance (£1,000 basic / £500 higher rate) and the starting rate for savings may cover it. Gilts go one better: their capital gains are entirely CGT-free, which is the basis of the low-coupon trick in the cash-like investing guide.

The paperwork nobody warns you about

Shrinking the bill, legitimately

  1. Harvest the £3,000 every year. Sell enough winners to realise gains up to the exempt amount, even if you don’t need the cash — it resets your cost base upward for free. Unused allowance doesn’t carry over.
  2. Bed-and-ISA. Sell in the GIA and immediately rebuy the same fund inside your ISA (the 30-day repurchase rule only bites if you rebuy in the same unwrapped account). Each April, migrating £20,000 of GIA money into the wrapper is the single best move available.
  3. Bed-and-SIPP, and spouse transfers. The same trick works into a pension — with tax relief on top — and transfers between spouses are CGT-free, doubling the household’s allowances and potentially moving gains to the lower-rate partner.
  4. Put the right assets in the wrapper. Shelter the high-dividend and high-growth holdings first; hold low-yield assets (or low-coupon gilts — capital gains on gilts are CGT-free) unwrapped.
  5. Don’t let the tax tail wag the dog. Deferring a sale forever to avoid 24% on the gain, while holding an investment you no longer want, is how people ride concentrated positions down.

The one-line summary

A GIA is the overflow tank, not the strategy: fill ISA and pension first, harvest the £3,000 gains allowance annually, bed-and-ISA £20,000 across every April, and keep records like HMRC will ask — because one day it might.

Last reviewed: October 2026.