What to hold in general account

Ciprico

It makes sense after Sipp and ISA allowances are exhausted to hold something in a general account to mop up your cgt and dividend tax free allowance ?

What do people use for this?

Any reason not to use a low cost tracker like SWLD or HMWO and buy the quantity of stock to generate £500 in dividend payments?

InvesterJones

Yep, though the point of investments should be to meet your goals, not mop up tax allowances - i.e. you might still be fine accepting tax on investments if they are the right vehicle for you to meet your goals (as stocks say historically still return above inflation, and are perhaps taxed at a lesser rate than income tax).

Keeping it simple with a low cost tracker is one good approach - going for income rather than accumulation units helps keep track of dividends more easily. If you wanted a more complex approach then if you had a more growth oriented fund in your portfolio then that's not terrible to stick in a general account since dividends will be lower and provided the sums aren't growing astronomically, CGT allowance can be harvested each year.

Another approach is buying gilts, since only the coupon payments attract income tax while any capital gain is tax free.

GeoffTF

There was a Monevator article on this:

https://monevator.com/tax-efficient-investing-uk-order-isa-sipp/

He forgot about low coupon gilts, that US based ETFs are forbidden to ordinary UK investors, and that equities are likely to grow more than bonds and increase your the size of your tax shelters more.

talexuser

I try and put all the higher dividend payers in the ISA, and the lower yields unwrapped. Income funds make the tax return much less of a hassle, just keep a spreadsheet of dividends and CGT price for each tax year. The 500 and 3k limits are going to hit hard compared to earlier years thanks to the party of "low taxes"  :-)))

hallmark

I have some BCOG & some ETCs (Gold, Silver, Platinum) in my GIA as none of those pay dividends.  CGT would be liable on gains but there would be ways to minimise that.

Bostonerimus1

I have a low cost US equity fund, an International equity index fund and a money market fund in my GIA