What is a GIA?
A general investment account (GIA) is a “tax wrapper” with no overt tax advantages.
A GIA is just like any other form of investment. All investments whether it be a NISA, a pension, a bond, a general investment account all work in much the same way apart from their tax status. This is why they are often called “tax wrappers”.
Whatever tax wrapper you put your money into, it will be “invested” in much the same places whether it be cash, government or company loans, commercial property or company shares. Your money will be “pooled” with other investors’ into funds that hold a mixture of these “assets” based on your attitude to risk, term of investment and a number of other factors. The only difference is that funds within a GIA will have had some tax deducted.
A general investment account is often utilised where other allowances – such as the pension’s annual allowance and the ISA allowance have been used. It does not provide tax relief but there are very little restrictions – there is no restriction on the amount you can invest or the amount you can withdraw. On wrap and platforms, General Investment accounts (sometimes called personal portfolios and OEICs) can be used to “feed” ISAs and Pensions each tax year, thus moving money into more tax efficient environments.
Monies within a GIA can be used to utilise the capital gains tax allowance – a tax allowance which is rarely used. The CGT threshold is £11,300 meaning that gains of this amount can be made each year without incurring tax. If you hold shares within the GIA which pay dividends, you can also use the GIA to utilise your dividend allowance. Any gains or dividends above your allowance will be subject to tax.
If you would like to review your financial plans, contact me for a complimentary, no obligation initial meeting.