What is a general investment account (GIA)?

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A general investment account is a standard share, bond and fund dealing account that does not come with any tax-efficient wrappers like an ISA or SIPP. They are often cheaper to hold investments in because they are more common and there are very few restrictions as to what investments you can hold in them.

What are the main costs associated with a general investment account?

The main costs of general investment accounts are:

  • Account fees: This is what your investment platform charges for looking after your investments. There are some companies like Interactive Brokers that offer free GIA’s as part of their overall service, but the major platforms like Interactive Investors charge a flat monthly fee and Hargreaves Lansdown and AJ Bell charge between 0.25% and 0.45% of your GIA portfolio.
  • Dealing commissions: This is what you pay every time you buy and sell an investment. Some platforms like Interactive Investor will give you a free share trade every month and then charge a fee. Whereas if you are investing in funds, platforms like Hargreaves Lansdown lets you do this for free.

There is different pricing for shares, bonds and funds, you can compare the cost of the best general investment accounts here.

Industry experts told us

"A General Investment Account allows DIY Investors to take advantage of everything an investment platform has to offer – such as wide investment choice and guidance - without worrying about annual limits on how much they can invest. This makes them ideal for those who have maxed out their ISA and pension allowances and have more to invest."

What investments can you hold in a GIA?

GIA stands for general investment accounts stands, because there are no restrictions on what investments or how much of them you can hold in a general investment account so it is sensible to start investing in a GIA after you have used up your stocks and shares ISA allowance and made any SIPP contributions.

The most common types of investments to hold in a general investment account are:

  • Shares – owning a part of a listed company and receiving dividends
  • Bonds – corporate or government IOU, that generate regular income through coupon payments
  • Funds – actively managed funds that are run by investment managers
  • ETFs – exchange-traded funds that are passively managed and track an index like the FTSE 100
  • REITs – real estate investment trusts that owns and invests in property on behalf of investors

Do you have to pay tax on profits from a GIA?

One of the main disadvantages of general investment accounts is that there are no tax wrappers. Any profits you make in your GIA will be subject to standard capital gains tax.

The amount of tax you pay will depend on your overall income and tax status, and you will normally have to complete a tax return if any capital gains tax is due.

General investment accounts are not very tax-efficient investments for higher-rate taxpayers. Consider a stocks and shares ISA first and use up your annual ISA allowance before investing in a GIA.

How many general investment accounts can you have?

You can have as many general investment accounts as you like. Unlike ISAs, where you can only open one a year there are no restrictions on having multiple GIA.

You can often save quite a considerable amount of money by having different types of investments with different providers.

For example, instead of keeping all of your investments with Hargreaves Lansdown it would work out cheaper if you just held your shares with them as they do not charge a a fee for holding shares. But kept your fund investments in an account with AJ Bell, as their funds fees are only 0.25% compared to Hargreaves Lansdown’s 0.45% (upto £250,000).

Can a general investment account be written in trust?

Alice Haine, Personal Finance Analyst at Bestinvest, the DIY investing and coaching service, helps answer this question and comments:

General investment accounts can be written in trust. Bestinvest, for example, allows investors to hold their assets within a Bare Trust or Discretionary Trust. Investors simply express their wish to contain the GIA within a trust, fill in the relevant paperwork, check the information carefully and then register the trust with the tax authorities within 90 days of it being opened.

A Bare Trust is a straightforward process way for investors to make gifts to children tax-efficiently. The simple legal arrangement allows the investor to allocate a fixed share of their assets to one or more people or children. Such an arrangement offers many benefits with no limits on the value that can be held in one. Savers using these vehicles must choose the beneficiary, appoint trustees (including themselves) and decide when benefits are distributed.

With Bare Trusts typically a popular way for parents and grandparents to set money aside for a child, remember minors automatically get access to the trust when they turn 18. For some people a Discretionary Trust may be more suitable as trustees have the flexibility to decide who receives benefits and when. This can protect assets if a beneficiary gets divorced or goes bankrupt, as the money can remain in trust well into a child’s adulthood.

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