Hundred SummersISA vs general investment account: the tax on investing outside an ISA
The same investments in a stocks and shares ISA and in an ordinary investment account: the dividend tax each year, the capital gains tax when you sell, and how much the ISA keeps. Your figures never leave your browser.
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Worked example
Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.
| Inputs | |
|---|---|
| Invested now | £20,000 |
| Then each month | £500 |
| For | 20 years |
| Return a year / of which dividends | 6.0% / 2.0% |
| Other income | £45,000 |
| Results | |
|---|---|
| Using the ISA | £298,099 |
| General account, after selling | £267,407 |
| Dividend tax along the way | £4,522 |
| Capital gains tax on selling | £24,272 |
| The ISA keeps | £30,692 |
The next question
What are charges costing me? →Fund charges calculator
Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.
Read the guides
- ISA or pension? Where long-term money should go, and the Lifetime ISA's place →The same gross pay by two routes (pension with relief and a tax-free quarter, or ISA after tax and NI) compared on your rate now and in retirement, why the pension usually wins on tax and the ISA on access, and where the Lifetime ISA's 25% bonus fits.
- Investment bonds and top-slicing: how a gain is taxed, and when it isn't →Onshore and offshore bonds, the 5% withdrawals that defer tax, chargeable events, and top-slicing relief: the rule that lets a ten-year gain be taxed as if spread over ten years, so a basic-rate taxpayer can pay nothing on an onshore gain.
Where the tax comes from
Outside an ISA, investments are taxed twice over. Dividends are income: the first £500 a year is tax-free, the rest is taxed at 10.75%, 35.75% or 39.35% depending on your band (rates raised by 2 points from April 2026). Gains are taxed when you sell: the first £3,000 a year is exempt, the rest is taxed at 18% within the basic-rate band and 24% above it. Both allowances have been cut sharply since 2023 (from £2,000 and £12,300), so a modest portfolio now pays tax it would not have paid a few years ago.
Inside a stocks and shares ISA neither tax applies, and nothing has to go on a tax return. You can put in up to £20,000 a year across all your ISAs. From April 2027 no more than £12,000 of that can go into cash ISAs if you are under 65; the limit on stocks and shares is unchanged.
More than the allowance
If you invest more than £20,000 in one go, the rest has to wait in a general account. Each new tax year's allowance can then take some of it across (Bed and ISA): a sale and a repurchase inside the ISA. The sale can owe capital gains tax, which the calculator takes from the money moved. Couples have an allowance each.
Sources
- GOV.UK, Tax on dividends.
- GOV.UK, Capital Gains Tax: what you pay it on, rates and allowances.
- GOV.UK, Individual Savings Accounts (ISAs).