What is a General Investment Account (GIA)?
A General Investment Account (GIA) can be a good place to put your money away if you’ve already reached your annual allowance for your Individual Savings Account (ISA). Unlike an ISA, there’s no limit to how much you can invest using a GIA. However, you will have to pay tax on any growth on your savings.
That means that, while a GIA is a flexible and convenient option to invest your savings, it might not be for everyone. It’s important that you choose an investment account that’s right for your goals and circumstances.
Read on to discover the pros and cons of these accounts, why they’re great for impact investing, and who’s eligible.
What is a General Investment Account (GIA)?
A General Investment Account (GIA) is a specific type of account that allows you to invest your savings in the stock market.
You might also see these accounts called ‘share dealing accounts’, ‘shares accounts’, or just ‘investment accounts’, depending on the provider. However, they all mean the same thing.
When you invest using a GIA there is no limit to the amount you can invest through this type of account. That’s why they’re often used by people who have reached the £20,000 annual allowance on their ISA.
For people with more than £20,000 to invest each year, a GIA gives you a flexible and convenient place to invest your money.
At the same time, it's worth remembering that ISAs let you invest your savings tax-free*, but GIAs don’t. Instead, you do have to pay tax on capital gains, dividends, and income from any interest on your GIA investments.
Should you get a GIA or an ISA?
GIAs are a popular, flexible, and simple way to invest money if you’ve already reached your ISA allowance. However, as they don’t protect your savings behind a “tax wrapper” like an ISA, they might not be your first choice of account for investing.
It’s helpful to see the two types of accounts as complementing each other.
An ISA is a tax-efficient way to save and invest that comes in a variety of forms, including a Cash ISA, a Stocks and Shares ISA, a Lifetime ISA, or an Innovative Finance ISA. There are important differences, which you can explore in our guide to the different types of ISA. But what they all have in common is that, if your savings or investments grow, you won’t be taxed on that growth or on any interest.
That said, there’s a limit to how much you can save into an ISA. You can only put £20,000 away each year. Often ISAs charge you to withdraw money, too. Both the CIRCA5000 Stocks & Shares ISA and our GIA do not charge you to take money out of your account and you can withdraw at any time in the year.
If you have more money than £20,000 to invest a year, a GIA can be a simple and flexible way to invest your money.
How does a General Investment Account work?
Like a Stocks and Shares ISA, a GIA lets you invest your money in the stock market. It's a flexible account that gives you access to a wide range of stocks and shares, just like any other investment vehicle.
What makes it an attractive option for many people is that it’s really easy to set up. For example, all you need to open a GIA is a UK bank account.
Once you’ve set up your account with CIRCA5000, you can add as much money as you like simply through your CIRCA5000 app.
Use your GIA savings to do good
With CIRCA5000, you have full control over where your money goes.
That’s what makes a GIA ideal for anyone interested in impact investing. Impact investing is the gold standard for sustainable investing, where investors like you use their savings to support socially and environmentally-minded companies. With impact investing, the impact these companies have is measured and reported, so you know that your investments are actually making a positive difference.
With a GIA, you can easily build your own portfolio by choosing from themes based on structural trends when you decide where to invest your money. You can also set a risk level and an investment theme and let us manage your savings for you. At CIRCA5000, we offer six different thematic investment funds, including:
- Clean Water
- Cybersecurity & Data Privacy
- Digital Learning & EdTech
- Sustainable Future of Food
- Pharma Breakthrough
- Global Clean Energy
So, select your investment style and put yourself in charge of the impact your money is having. You can see exactly how your savings are performing in the CIRCA5000 app.
The nuts and bolts of a GIA
Who can get a GIA?
If a GIA sounds promising, the good news is most people are eligible for an account. You just have to be a UK or EEA resident with a UK bank account, and be 18 or over. That’s it.
Most providers don’t have minimum levels of investment either. This means you can open an account with CIRCA5000 for as little as £5, adding as much or as little as you like, as you go.
How much tax do I pay on a GIA?
As we’ve said, GIAs don’t have the same tax benefits as an ISA or a pension. Although there aren’t any limits on the amount you can invest, your savings may be liable to capital gains tax (CGT), dividends tax, and income tax on any returns.
In short, that means you will need to pay tax on anything that your investment earns. However, taxes only apply to any gains over your annual allowances and will be affected by how much other taxable income you have.
For example:
- Income tax. Any interest from your GIA investments might be subject to income tax. Basic rate taxpayers have a personal savings allowance of £1,000 tax-free interest per year. Higher rate taxpayers only receive £500 in interest tax-free, while additional rate taxpayers don’t have a personal savings allowance at all.
- Capital Gains tax. If you’ve made gains from selling GIA investments, you’ll owe tax on anything above your capital gains tax allowance. This is currently £12,300 for the 2022/23 tax year (but this allowance also includes any profits made from businesses, second homes or inheritance).
- Dividends tax. Dividend income is money you can receive from company profits if that company has performed well. The first £2,000 of dividend income a year is currently tax-free. After that, basic rate taxpayers pay income tax at 8.75% on dividend income. Higher-rate taxpayers pay 33.75% and additional rate payers pay 39.35%. Note that the dividend allowance rates are changing from April 2023. This measure reduces the tax-free allowance for dividend income (the ‘Dividend Allowance’) from £2,000 to £1,000 from 6 April 2023.
CIRCA5000 does not give tax advice. Tax treatment depends on your individual circumstances and may change in the future.
How much does a GIA cost?
At CIRCA5000, we pride ourselves on our simple, transparent and ethical approach to investing.
When you open a GIA (or an ISA or Junior ISA for that matter), we charge a £1 monthly subscription fee as well as a 0.45% investment platform fee. So if you had £10,000 invested across your accounts, this would cost £4.75 a month — or £57 a year.
There’s also an annual “external fund fee” which applies to all clients, depending on your choice of investments. These costs vary depending on the investment fund or theme you choose, ranging between 0.24-0.65% per annum.
And that’s it.
There are no hidden costs such as withdrawal fees, admin fees, contribution, or trading fees (which might be charged by other providers). We never charge you to open and close accounts or for buying and selling investments.
Recap: What is a General Investment Account?
A General Investment Account is a type of investment vehicle that’s a great place to invest money if you’ve already reached your £20,000 tax-free ISA allowance.
While you will need to pay tax on your investment growth with GIA, this type of account does offer some important benefits. For example, you can invest as much as you like, you can withdraw money whenever you want, and with CIRCA5000 you can use your money to do good.
Set up a GIA with CIRCA5000 and invest your money in groundbreaking businesses solving world problems. Sign up to CIRCA5000 today to open your account.
Disclaimer
When you invest, your capital is at risk. You should consider whether opening a CIRCA5000 GIA or transferring your GIA is right for you. Please note that tax rules and reliefs may change depending on your circumstances. CIRCA5000 does not provide any financial or tax advice, and you are responsible for your own tax reliefs/payments. This article does not represent financial advice.