ISA vs GIA After-Tax Comparison (UK, 2026)

£1,666/mo fills the £20,000 ISA. Above that, we spill into GIA.

Tax drag compounds — 1 year vs 20 years is dramatically different. Most long-term investors should model 10-25 years.

FTSE 100 ETF: dividend ~3.5%, growth ~4%. Global all-cap: dividend ~1.8%, growth ~5-6%. S&P 500: dividend ~1.3%, growth ~7%. High-yield funds make GIA tax drag much worse.

Buy-and-hold ETF = "never". Target-allocation portfolio rebalanced yearly = "annual". Multi-asset or actively managed = "quarterly". Higher turnover = more CGT realisation = more tax.

Higher-rate taxpayers pay 33.75% on dividends (vs 8.75% basic). This is the single biggest GIA drag factor.

The ISA/GIA area chart shows compound growth. The "break-even pot" figure tells you when a GIA actually starts costing meaningful tax for your specific setup.

Transfers between spouses are CGT-free (no gain / no loss basis). If one spouse has unused CGT exemption (£3k), realise the gain in their name. If they're basic-rate and you're higher-rate, even realised dividends save tax (8.75% vs 33.75%).

Accumulation units re-invest dividends automatically — but you still pay dividend tax on them each year in a GIA (excess reportable income rules). This catches many DIY investors. Stick to ETFs in GIAs for cleaner reporting.

(1) You're already at the £60k annual pension allowance. (2) You need the money before 57. (3) You're a basic-rate taxpayer expecting to become higher-rate in retirement. (4) You want to pass wealth via gifts (pensions are increasingly IHT-exposed from April 2027). For most other scenarios SIPP wins.

Selling a GIA into an ISA uses your £20k ISA allowance. Selling into a SIPP gets you 20-45% tax relief on top of the transfer. For higher-rate taxpayers, Bed & SIPP is often more valuable than Bed & ISA — especially with the new £500 dividend allowance making GIAs painful.

See LISA vs Pension if you're saving for a first home, or Salary Sacrifice Pension to model SIPP contributions.