afterax

ISA vs taxable

ISA vs taxable

ISA advantage

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£89,035

Over 20 years at 7.0%, that's how much more you keep in an ISA than in a general account.

2026/27 rates · Last checked · Sources visible below

Side by side

ISA

£487,349

final pot

Contributed£220,000
Net gain£267,349
Tax paid£0

General account

£398,313

final pot

Contributed£220,000
Net gain£178,313
Tax paid£78,004

Where it goes (general account)

Of the gross gain of £233,675

Kept

£178,313

Total tax

£78,004

Why ISAs win

Inside an ISA: no dividend tax, no CGT, no reporting on Self Assessment. In a general account, you pay dividend tax annually on any dividend yield above the £500 allowance, and CGT on the capital gain when you sell (above the £3,000 annual exempt amount). At higher rate, every dividend pound is taxed at 35.75% and every gain pound at 24%.

Estimates for illustrative and educational purposes only. Calculations use HMRC published rates and are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.

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ISA vs general investment account in 2026/27

The £20,000 ISA allowance is the most powerful tax wrapper available to UK retail investors. With the dividend allowance at £500 and CGT allowance at £3,000, both shrunk dramatically since 2022, ordinary investing accounts now lose materially more to tax than they used to. Over a 20-year horizon a higher-rate investor saving £10,000 a year typically ends up with tens of thousands more inside an ISA.

  • What is the ISA allowance for 2026/27?

    £20,000 across all your ISAs per tax year (Stocks & Shares, Cash, Innovative Finance, Lifetime, although LISA is capped at £4,000 within the £20k). The allowance resets every 6 April and can't be carried forward.

  • How much could an ISA save me over a taxable account?

    Over 20+ years for a higher-rate taxpayer, the difference can be tens of thousands of pounds. The ISA pays no dividend tax (vs 35.75% in a taxable account above the £500 allowance) and no CGT on exit (vs 24% above the £3,000 allowance). The Afterax ISA vs taxable calculator quantifies this for your specific scenario.

  • Can I have multiple ISAs of the same type?

    Yes, from April 2024 you can pay into multiple ISAs of the same type within a single tax year, as long as you don't exceed £20,000 across them. Lifetime ISA still has a £4,000 limit and can only be opened by under-40s.

  • What if my taxable account is already large?

    Use 'Bed and ISA' to crystallise gains within the CGT allowance and re-buy inside an ISA. With the AEA at £3,000 it takes longer than it used to, but it still works. The 30-day share-matching rule generally doesn't apply because the rebuy happens inside the ISA wrapper. If you sell and rebuy the same shares in a taxable account within 30 days, HMRC matches the disposal to the rebuy and the gain disappears.

Sources & last reviewed

Updated for 2026/27 · last reviewed 1 May 2026 · view changelog →

Bands, thresholds and reliefs on this page come directly from the following official sources. Tax rates are checked against these references whenever a Budget or in-year change is announced.