What works in the United Kingdom

Tactical asset allocation after tax in the United Kingdom: the rules of the GIA, ISA, SIPP, in plain words with sources, and what they cost 107 strategies over 2006 to 2026.

Version: 2.1
Published: 8 October 2026
Rules last checked: 22 October 2026

General investment account (GIA)

A 24% rate, a small allowance, and fund income taxed every year.

Tax cost a year (median): 2.3 pts
Median strategy, before / after tax: 10.5% / 8.1%
S&P 500 held, after tax: 10.6%
60/40 after tax (worst fall): 8.2% (-12%)

2 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 17 beat the S&P 500 held throughout. Returns a year, in GBP.

The rules

Capital gains tax 24% for a higher-rate taxpayer (18% within the basic-rate band), above a GBP 3,000 yearly allowance (2026-27).
Losses offset gains of the same year in full; losses carried forward only bring gains down to the allowance, and must be claimed within 4 years.
Units are pooled at average cost (section 104). A sale bought back within 30 days is matched to the new purchase instead; this 30-day rule is not modelled.
UK investors cannot buy US-listed ETFs, so the account holds UCITS ETFs with HMRC reporting status. Their income is taxed every year, distributed or not: as dividends (35.75% above GBP 500 from April 2026) or, for bond funds, as interest (40% above GBP 500).
Irish UCITS funds lose 15% US withholding on US dividends inside the fund.
Leveraged ETPs are taxed as gains only when they have reporting fund status; otherwise the profit may be taxed as income.
A basic-rate taxpayer pays 1.5 points a year instead of 2.3.

Confidence in these rules: high. Checked 22 October 2026. Sources: GOV.UK: Capital Gains Tax rates and allowances; GOV.UK: Capital Gains Tax, claiming losses; TCGA 1992 s.106A (identification of securities, 30-day rule).

Stocks and shares ISA

Tax-free switching, filled GBP 20,000 a year.

Tax cost a year (median): 0.1 pts
Median strategy, before / after tax: 10.5% / 10.3%
S&P 500 held, after tax: 12.3%
60/40 after tax (worst fall): 9.7% (-11%)

5 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 28 beat the S&P 500 held throughout. Returns a year, in GBP.

The rules

No tax on gains, dividends or interest; GBP 20,000 of new money a year. From April 2027 the cash ISA limit falls to GBP 12,000, while stocks and shares can still take the full 20,000.
UCITS ETFs and listed ETCs and ETNs qualify; US-listed ETFs are not available to UK retail investors.
The only cost here is the 15% US withholding inside Irish funds on US dividends. Losses get no relief.

Confidence in these rules: high. Checked 22 October 2026. Sources: GOV.UK: Individual Savings Accounts; HMRC guidance: Stocks and shares ISA investments for ISA managers; FCA PS25/20 (PDF), para 2.8 Overseas ETFs.

Self-invested personal pension (SIPP)

Like the ISA for a switcher, plus relief now and a tax-free quarter at the end.

Tax cost a year (median): 0.1 pts
Median strategy, before / after tax: 10.5% / 10.3%
S&P 500 held, after tax: 12.3%
60/40 after tax (worst fall): 9.7% (-11%)

5 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 28 beat the S&P 500 held throughout. Returns a year, in GBP.

The rules

Growth is not taxed; contributions get tax relief at your marginal rate (annual allowance GBP 60,000).
At withdrawal, 25% is tax-free (up to GBP 268,275 in total) and the rest is taxed as income. With the same rate at both ends, the untaxed growth shown is the after-tax result; the tax-free quarter makes it better.
Minimum pension age 55, rising to 57 from April 2028. Unused pensions count for inheritance tax from April 2027.
Same funds as the ISA, so the same 15% US withholding inside Irish funds.

Confidence in these rules: medium. Checked 22 October 2026. Sources: GOV.UK: Tax on your private pension, annual allowance; GOV.UK: Tax on your private pension, lump sum allowance; GOV.UK: Tax on your private pension, pension tax relief.

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How this was computed, the limits, and every other country are in the full study.