When you’re looking to grow your wealth, there are some simple things you can do to make your money go further. In the GIA vs ISA comparison, GIAs provide flexibility without tax relief, while ISAs offer tax advantages within set allowances.
Understanding the differences between the two can help you choose the most suitable account for your investment goals.
But investing doesn’t need to be complicated. At Moneyfarm, we think that a big part of our role is to simplify investing and change your relationship with your money.
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Is a GIA better than an ISA? |
Not really. It’s more like a complement to it |
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Can I have more than one GIA account? |
Yes, you can have multiple GIA accounts |
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Does a GIA account have any tax benefits |
No, there are no tax benefits |
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The best reason to invest in GIA |
When an ISA is not an option or an ISA allowance has been reached |
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Th best reason to invest in an ISA |
Tax advantages |
At a Glance
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ISAs (Individual Savings Accounts) offer tax advantages: no income tax, dividend tax, or capital gains tax on investments held within the account.
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GIAs (General Investment Accounts) provide flexibility with no annual contribution limit but do not offer tax relief.
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Annual ISA allowance is £20,000 per person for the 2025/26 tax year (cannot be rolled over), GIAs become useful only when the ISA allowance has been fully utilised.
Does my account impact my investments at Moneyfarm?
Regarding the GIA vs ISA discussion, whichever vehicle you choose to invest your money in, you’ll be given the same level of investment advice to help you reach your goals. You can also open a number of different investment accounts with Moneyfarm that cater to everything from medium-term goals to your pension fund.
If you’re hoping to help your children on the property ladder, are planning a sabbatical, or are planning a career change, you might be looking for a more flexible account to help grow your money. Our stocks and shares ISA or GIA (General Investment Account) may suit your needs, but it ultimately depends on your financial situation.
What is a stocks and shares ISA?
A stocks and shares ISA is a tax-efficient and straightforward way to grow your money over the long term. This is how much you can put in your ISA each financial year, and any growth in the value of your money and any income can build up protected within your tax-free wrapper.
You usually pay capital gains tax on any profit you make on your investments above your annual allowance. For the 2025/26 tax year, the capital gains tax-free allowance is £3,000. (this is the same for ISA tax free allowance)
If you start investing money in an ISA, you won’t need to pay a thing in capital gains or dividend tax. Making the most of the tax benefits available to you is crucial for maximising your returns over the long term.
The ISA allowance is set on an individual basis, currently £20,000 per person for the 2025/26 tax year. This means that couples can collectively invest up to £40,000 each year. The allowance operates on a “use it or lose it” basis, as it resets at the start of every tax year and cannot be carried forward.
A common misconception is that you lock your money away when you invest in a stocks and shares ISA. Whilst it’s important to stress how important long-term investing is for your returns, ISAs have evolved to be much more flexible, allowing you to take money out and replace it within the tax year without it affecting your overall allowance.
It’s also getting easier to take your money out from your ISA. With wealth managers like Moneyfarm, the flexibility of our portfolios and platform means you can get your money out quickly and without paying a penny. Withdrawals may still take a few business days.
The tax benefits of an ISA are subject to change in the future, so it’s important that you make the most of the generous tax benefits available to you. Simple yet effective, ISAs are popular with investors of all experiences looking to grow their money.
Since April 2024, you can also pay into more than one ISA of the same type in the same tax year, as long as your total contributions across all ISAs do not exceed the £20,000 annual allowance.
What is a GIA, General Investment Account?
General Investment Accounts (GIA) are good options for investors who have already used up their ISA allowance for the year. There are no tax benefits to be found in your GIA, which means there are no limits to how much you can put in each year.
This flexibility means you can put in and withdraw as much as you like from your GIA. You will not pay dividend tax on any income within your annual £500 annual dividend allowance.
You won’t need to pay capital gains tax on any profit you make under the £3,000 threshold (the £3,000 CGT allowance applies across all assets: shares, funds, property not your main home, etc.), although this allowance includes any profit you make during the tax year from a business, second home, or personal possessions above a certain value.
Using an ISA where possible can reduce or eliminate these taxes, whereas gains and income in a GIA are taxable.
You can open as many GIAs as you like. However, GIAs usually count as part of your estate when determining how much inheritance tax (IHT) is due. You can pass an ISA onto a spouse free from IHT.
When comparing GIA vs ISA, you can hold a broad range of investments in both, including funds, shares, investment trusts and ETFs. Picking the investment account to help you reach your goals doesn’t need to be difficult, although you should seek financial advice if you’re unsure.
GIA vs ISA: The difference between the two accounts
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GIA (General Investment Account) |
ISA (Individual Savings Account) |
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Can I have more than one account? |
Yes, you can have multiple GIAs and pay into any or all of them each tax year. |
Yes, you can hold multiple ISAs. Since April 2024, you can also open and pay into more than one ISA of the same type in the same tax year, provided total contributions stay within the £20,000 annual limit. |
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Annual contribution limit |
No limit. You can contribute any amount (some providers may have their own operational limits). |
£20,000 total across all ISAs in the 2025/26 tax year. |
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Tax benefits |
No tax advantages. You have £500 dividend allowance and £3,000 CGT allowance (2025/26). |
Full tax advantages: no income tax, capital gains tax, or dividend tax on investments held within the ISA. |
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Best use case |
When you have used your ISA allowance for the year but still want to invest without contribution limits. |
To take advantage of tax-free growth and income within the £20,000 annual limit. |
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Withdrawals |
Funds can be withdrawn at any time without restrictions. |
Withdrawals allowed at any time. With a flexible ISA, withdrawn amounts can be replaced in the same tax year without affecting the allowance. |
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Tax on withdrawals |
No tax is charged when withdrawing, but any gains or income may already have been subject to tax. |
No tax or loss of tax benefits when withdrawing. |
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Transfers |
Can be transferred between providers. Some providers offer a “Bed and ISA” service to move GIA assets into an ISA (usually requiring sale and repurchase). |
Can be transferred between providers and between most ISA types, subject to provider and product rules. |
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Joint accounts |
Can be held jointly. |
Cannot be held jointly — ISAs are for individuals only. |
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Inheritance Tax Treatment |
Fully counts for inheritance tax purposes. |
A spouse or civil partner can inherit ISAs through an “additional permitted subscription” (APS) allowance, keeping its tax benefits. |
Investment advice
When you invest with Moneyfarm, we provide you with a unique combination of regulated investment advice and discretionary fund management.
After getting to know more about you, your financial background, and your goals, we will take the GIA vs ISA scenario into account if appropriate, and we’ll assign you an investor profile that outlines your risk profile. We’ll then match you with an investment portfolio built explicitly for you and managed by our team of experienced fund managers to reflect your profile.
You can always get in touch with one of our qualified investment consultants if you’ve got any questions, although we won’t be able to give you advice on which accounts to open.
Key Takeaways
- ISAs offer full tax relief on income, gains, and dividends; GIAs do not.
- GIAs have no contribution limits, making them useful after using your ISA allowance.
- Withdrawals are penalty-free for both, but only flexible ISAs allow replacement within the same tax year.
- Both count towards inheritance tax, though ISAs can be passed to a spouse or partner with tax benefits.
FAQ
A GIA is not better than an ISA. The choice when it comes to GIA vs ISA depends on an investor’s profile.
Yes, you can transfer a GIA to an ISA. You need to sell your GIA investments and then move the cash into an ISA.
With an ISA, there are no income, capital gains and dividend taxes. With a GIA, there are income, capital gains and dividend taxes.
Yes for both: you can hold multiple GIAs with no restrictions, and you can also have more than one ISA per year as long as you stay within the £20,000 overall ISA allowance.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
