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Education Accounts and tax

Accounts and tax

What you can pay in, when you can take money out, and how it is taxed. A guide to the UK, US, Canada and Australia.

Explore a tax system

Figures checked 9 September 2026 · UK 2026/27 · Pounds sterling · US 2026 · US dollars · Canada 2026 · Canadian dollars · Australia 2026/27 · Australian dollars

United Kingdom · ISAs

ISAs: tax rules and access

An ISA is an account that shelters eligible savings and investments from UK tax. In 2026/27, interest, dividends and capital gains inside it are not subject to UK tax or declared on a UK tax return. The investments can still lose value. Unused annual contribution allowance does not carry forward. GOV.UK · How ISAs work ↗

Example: splitting the £20,000 allowance

Paying £8,000 into a cash ISA and £12,000 into a stocks and shares ISA uses the full 2026/27 allowance. It is shared across your adult ISAs. The limit is on new payments, not the total balance built up over several years.

Stocks and shares ISA

For money you can leave invested

Main restriction

Investments can lose value. Charges and foreign withholding taxes can still apply.

Eligible investments and charges

Can hold eligible funds, shares, bonds and investment trusts. Check the platform and investment charges. An ISA's tax benefits do not remove those costs or investment risk. Eligible investments ↗

See a worked example

An existing £20,000 ISA balance earning an illustrative 12% total return becomes £22,400 after one year, before fees. The £2,400 return is not a new contribution and does not use that year's ISA allowance. This return is assumed, not promised. Add regular payments and compare 10 or 20 years →

Cash ISA

For money you may need soon

Main restriction

Compare access terms and interest rates. Outside an ISA, the Personal Savings Allowance may already cover your interest.

Announced changes from April 2027

The government plans a £12,000 cash ISA limit from 6 April 2027 for people under 65. The limit would remain £20,000 from the tax year in which you turn 65. The overall ISA allowance would remain £20,000. The June 2026 factsheet says regulations are to be laid in autumn; these are announced changes, not the rules for 2026/27.

The announced measures also include a 22% charge on interest on cash held in a non-cash ISA, restrictions on transfers to cash ISAs, and a ban on non-cash ISAs holding only cash-like investments. Some age exceptions apply. GOV.UK · Planned ISA changes ↗

Separately, the tax rates on savings interest held outside an ISA are due to rise to 22%, 42% and 47% from 6 April 2027. GOV.UK · Tax rate changes technical note ↗

Lifetime ISA

First home, or age 60

Main restriction

Other withdrawals face a 25% charge, which takes back more than the bonus. First homes must cost no more than £450,000, bought at least 12 months after the first payment.

First-home conditions and the bonus

A qualifying first-home purchase must use a mortgage and a conveyancer or solicitor. Other purchase conditions apply. Terminal illness means less than 12 months to live. Withdrawal conditions ↗

Announced change: a First Time Buyer ISA

The government plans to offer a new First Time Buyer ISA in place of the Lifetime ISA. Until it is available, you can still open a Lifetime ISA, and existing holders can keep paying in under the current rules. No launch date has been set and the details are not final. GOV.UK · First Time Buyer ISA consultation ↗

Lifetime ISA example: why £800 can become £750

The Lifetime ISA charge takes back more than the bonus

The bonus is 25% of your contribution. An unauthorised withdrawal charge is 25% of the amount withdrawn, including the bonus.

With no investment growth or loss, withdrawing the whole account early leaves you with 6.25% less than you contributed. Qualifying home purchases, withdrawals from age 60, terminal illness and death have separate rules.

You pay in£800
Government adds 25%£200
In the account£1,000
Withdraw it early, charge is 25% of £1,000−£250
You receive£750
Against the £800 you paid in−£50

You are 6.25% down on your own money, before any investment gain or loss. GOV.UK's own example runs to the £750; the last line is that figure set against what you paid in. GOV.UK · Withdrawing money from your Lifetime ISA ↗

Junior ISA

For a child under 18

Main restriction

It is the child's money. Earlier withdrawals are limited to narrow cases such as terminal illness or death.

Who opens the account

A parent or guardian with parental responsibility opens it for a child under 16. Young people aged 16 or 17 can open their own Junior ISA. Opening a Junior ISA ↗

Transfers and flexible ISA withdrawals

To move an ISA, ask the new provider to arrange an ISA transfer. A withdrawal followed by a new payment can use up contribution allowance. Flexible ISAs allow some cash withdrawals to be replaced in the same tax year without using more allowance; check the provider's rules. Cash-to-cash transfers should take up to 15 working days; other transfers up to 30 calendar days. GOV.UK · Flexible withdrawals ↗

GOV.UK · Transferring your ISA ↗

Sources for this section
United Kingdom · Pensions

Pensions: contributions, tax relief and access

A workplace pension can receive contributions from you and your employer, with tax relief on eligible payments. A personal pension, such as a SIPP, has similar tax rules but does not automatically include an employer contribution. Access is usually restricted until later life.

Workplace pension

Automatic, if you qualify

Main restriction

Personal tax relief depends on earnings and eligibility. High incomes or some flexible withdrawals can reduce the annual allowance; scheme access rules and exceptions matter.

Minimum contributions, opting out and rejoining

In most qualifying defined contribution schemes, the minimum is 8% of qualifying earnings, including at least 3% from your employer. Scheme rules can use a different pay basis or higher contributions.

The one-month window

Opt out within one month of joining and your contributions are refunded. Later refunds depend on the scheme. Eligible workers are normally re-enrolled roughly every three years. You can ask to rejoin sooner, although an employer need not accept another request within 12 months of opting out.

SIPP

A pension you run yourself

Main restriction

Personal tax relief normally follows earnings, with low-earnings exceptions. High incomes or some flexible withdrawals can reduce allowances. Money is normally locked until pension access age; exceptions apply.

Employer payments and charges

Employer payments are possible but not automatic. Compare each provider's platform, investment, dealing and withdrawal charges. Costs and available investments vary.

Example: contributions on a £30,000 salary

A contribution example using qualifying earnings

This example uses the common qualifying-earnings basis: the slice of annual pay between £6,240 and £50,270. Some schemes calculate contributions on a different basis.

The employee's 5% is a gross contribution, including basic-rate tax relief where the scheme uses relief at source. It is not necessarily the amount deducted from take-home pay.

Salary£30,000
Qualifying earnings, above £6,240£23,760
Employee contribution, 5% gross£1,188
Employer pays 3% of that£712.80
Into the pension each year£1,900.80

The total is about 6.3% of the £30,000 salary. With relief at source, the £1,188 gross employee contribution consists of £950.40 paid by the employee and £237.60 basic-rate tax relief. The employer adds £712.80. Net-pay and salary-sacrifice arrangements work differently.

What tax relief actually does

Under relief at source, an eligible £80 payment receives £20 from HMRC, making a £100 gross contribution. Someone paying 40% income tax can claim another £20 if the whole contribution qualifies at that rate. Scottish rates differ. Under net pay, contributions are deducted before income tax instead. GOV.UK · Pension tax relief ↗

Tax relief on your own contributions is normally limited to relevant UK earnings, with up to £3,600 gross potentially eligible for people with low or no earnings. Eligibility conditions apply. The standard £60,000 annual allowance includes employer contributions and can be reduced for high incomes or after some flexible withdrawals. Unused allowance from the previous three tax years may be available. GOV.UK · Annual allowance ↗

When you can get at it

The normal minimum pension age is 55, rising to 57 on 6 April 2028. Some schemes have protected ages or allow earlier access for ill health. You can usually take up to 25% tax-free, within a standard lifetime lump sum allowance of £268,275; the rest is generally taxable income. Protections can change these limits. The lifetime allowance was abolished on 6 April 2024.

Pensions and inheritance tax change on 6 April 2027

Most unused pension funds and pension death benefits are due to enter the estate for Inheritance Tax purposes for deaths from 6 April 2027. Exemptions and allowances will still matter, including transfers to a spouse or civil partner. This does not mean every pension will face an Inheritance Tax bill. HMRC · Pension inheritance changes ↗

Be cautious about unexpected pension offers

Unsolicited pension marketing calls are generally banned, with limited exceptions for consent or an existing relationship. Do not share details or move money in response to an unexpected offer. Check the firm independently using the FCA Register. GOV.UK · Pension cold-calling ban ↗ · The Pensions Regulator · Scams ↗

Sources for this section

Try it with your own numbers

Work out pension contributions

See the gross contributions using the qualifying-earnings method. Your scheme may use a different pay basis. The employee figure includes any basic-rate relief; it is not a take-home pay calculation.

An illustration using your chosen figures. It does not assess eligibility or recommend an account.

The legal minimum is 8% in total with at least 3% from the employer. Many schemes pay more than that, and yours is on your payslip.

Into the pension each year £1,901
Of that, from your employer £713

Charged on £23,760 of qualifying earnings, the slice between £6,240 and £50,270, not on the whole salary. The gross employee contribution, including any basic-rate relief, is £1,188, which is 4.0% of your pay.

This compares pension contributions, not take-home pay. Tax relief and salary sacrifice can change the personal cost. Check your scheme's calculation on your payslip.

Try it with your own numbers

See how pension tax relief works

This example uses relief at source. The provider adds basic-rate relief to the pension. Any eligible extra relief is claimed from HMRC and reduces your overall cost; it is not automatically added to the pension.

An illustration using your chosen figures. It does not assess eligibility or recommend an account.

Which rate the sum should use
Leaves your account on the day £800
Net cost after any claim £800

The scheme adds £200 to make it up to the amount you chose. A basic rate taxpayer claims nothing further.

Assumes the whole contribution is eligible for relief at the chosen rate. It does not calculate earnings limits, annual allowance charges, Scottish rates or changes to your tax band. Extra relief may be claimed through a tax return or directly from HMRC.

United Kingdom · Outside a wrapper

What tax looks like in an ordinary account

A general investment account has no contribution limit and no access age. Dividends and interest may be subject to Income Tax, and profits on sales may be subject to Capital Gains Tax. Available allowances can reduce or remove the bill. Buying some shares also attracts stamp duty. Reporting rules are separate: some sales must be reported even when no CGT is due.

Capital gains tax

On what you sell for more than you paid

You may have to report before you owe

If you already file a Self Assessment return, you have to report disposals in it when total proceeds from chargeable disposals exceed £50,000, even if no tax is due. Sales of exempt assets, such as holdings inside an ISA, do not count towards that threshold. A year of ordinary rebalancing can pass that figure without producing much of a gain at all. GOV.UK on working out whether you need to pay ↗

See a worked example

Suppose shares cost £20,000 and sell for £30,000. The gain is £10,000, not the £30,000 sale price. With no costs or losses and the full £3,000 annual exemption available, £7,000 is taxable. At a fixed 24%, CGT is £1,680. Other disposals and your tax band can change this.

Dividend tax

On dividends, whether paid out or reinvested

Two of these rates changed on 6 April 2026

The basic and higher rates rose to 10.75% and 35.75%. Older guidance may still quote the previous rates. The technical note ↗

See a worked example

Suppose investments pay £1,500 in dividends in a year. With the full £500 dividend allowance available and no unused Personal Allowance, £1,000 is taxed. If it all falls in the higher dividend band, 35.75% means £357.50 tax. Reinvesting the dividend does not remove that tax.

What if a fund reinvests its income?

Accumulation units can produce taxable income even when no cash reaches your bank account. Where a notional distribution is subject to Income Tax, it adds to the cost used for a later capital-gains calculation. HMRC · Accumulation units ↗

Tax on savings interest

On cash held outside an ISA

If all your interest is covered by available allowances, there is no UK tax on that interest to save. Interest rates and access terms can still differ between accounts.

See a worked example

£3,000 earning 4% produces £120 interest in a year. If the full basic-rate Personal Savings Allowance of £1,000 is available and there is no other interest, no tax is due. A cash ISA would save no tax on that interest.

Stamp duty on shares

Paid when you buy, not when you sell

It applies inside an ISA too. The wrapper removes tax on what an investment does, not the duty on buying it. GOV.UK · Tax when you buy shares ↗

Selling and buying the same share back

Selling shares and buying them back shortly afterwards can change how the gain or loss is calculated. HMRC normally matches a sale first against shares bought on the same day, then shares bought in the following 30 days, then the pooled cost of other holdings of that class. The 30-day rule applies when you are UK tax-resident at repurchase. The repurchase cost can replace the original cost in the calculation; a fall since the original purchase does not guarantee the loss you expect.

HMRC · Helpsheet HS284, shares and Capital Gains Tax ↗

Example: why a £200 fall can mean a £10 tax loss

Suppose 100 shares originally cost £1,000. They are sold for £800, then 100 of the same shares are bought for £810 two weeks later. Matching the sale against that £810 purchase gives a £10 loss for this sale. This assumes UK residence at repurchase, no other relevant trades and no dealing costs. HMRC · Share matching examples ↗

Sources for this section

A worked example you can change

How much could tax change the outcome?

Compare an ISA and a taxable account with the same starting balance, regular payments and assumed return. Both are sold at the end.

An illustration using chosen figures. It does not assess eligibility or recommend an account.

See result ↓

An existing balance, which may have built up over several tax years.

Added at each period's end. Set to £0 for no further payments.

Illustrative assumption, not a forecast. Try a lower or negative return too.

12% total return, including dividends, before tax and charges.

Change dividends and tax rates

Dividends are payments from investments. They are included in the total return above, not added on top. Set to 0% to model price growth only.

Fixed tax-rate scenario

2% dividend yield; fixed 35.75% dividend tax and 24% CGT. Uses the full £500 dividend allowance each year and £3,000 gains allowance on sale. Actual income and gains can cross tax bands.

New ISA payments are normally limited to £20,000 per tax year. This comparison assumes the full allowance is available and caps regular additions at that amount each year.

After 20 years, if everything is sold

An illustration, not a forecast. Fees, inflation and foreign taxes are excluded.

ISA · no UK tax on income or gains£1,633,975
Taxable account · after tax on sale£1,269,905
Total tax in the taxable account£293,795
Dividend tax during the period
£68,177
Capital Gains Tax on the final sale
£225,618

The ISA ends with £364,070 more.

That difference includes the tax above, plus £70,275 from the effect of tax on later growth. Amounts are rounded.

Edit numbers ↑

The same example over 10 and 20 years
If sold at the end of10 years20 years
Total money paid in£220,000£420,000
ISA ending value£413,092£1,633,975
Taxable ending value£362,234£1,269,905
Total tax in taxable account£46,780£293,795

Each column is a separate sale scenario. The 20-year column assumes no sale at year 10. Total paid in includes the starting balance; rounded amounts may differ by £1.

Walk me through this example
  1. Start with £20,000, then add £20,000 at the end of each year for 20 years. Total money paid in: £420,000.
  2. Dividend tax totals £68,177 over the period. Each model year gets a fresh £500 dividend allowance; the rest is taxed at 35.75%. Only the dividend left after tax is reinvested.
  3. Just before selling, the taxable account holds £1,495,523. Subtract its £552,449 purchase cost (including reinvested net dividends) and the £3,000 gains allowance. The taxable gain is £940,074; at 24%, the tax on sale is £225,618.

Deposits are not profits. Reinvested dividends add to the taxable account's purchase cost, so they are not counted again as capital gains.

These figures are an illustration, not a forecast. The return you choose is an assumption, not a typical account return. Real returns move up and down, and you can lose money. Try a lower or negative return as well.

Timing, assumptions and limits

The annual return includes reinvested dividends. We convert it and the dividend yield into monthly rates, with price growth adjusted so the two combine to the total return chosen. Payments arrive at the end of each month or year, after that period's return.

Each model year uses the full dividend allowance. For simplicity, dividend tax is deducted monthly as dividends exceed that allowance, before reinvesting the rest. Real tax payment dates differ. The full holding is sold at the selected horizon and the gain above the available CGT allowance is taxed once.

No platform fees, investment charges, inflation or foreign taxes are included. The fees lesson shows how ongoing charges can affect savings. Purchase taxes such as stamp duty are also excluded.

The selected tax rates and today's allowances stay fixed throughout. This does not model tax-band crossings, other income, losses elsewhere, future rule changes or sales made in different tax years. A basic-rate income taxpayer may pay 24% CGT on part of a gain. This is a fixed-rate example, not a personal tax estimate. The starting taxable balance is assumed to equal its purchase cost, with no previous unrealised gain. Each model year represents a full tax year.

Tax treatment depends on your own circumstances and can change in the future. For free and impartial guidance, contact MoneyHelper, the government-backed service. For a recommendation about your own situation, speak to a firm authorised by the Financial Conduct Authority, which you can check on the FCA Register.

UK · Capital Gains Tax

What can be free of capital gains tax?

Some assets are exempt. Others qualify only if the sale or your circumstances meet specific conditions. These are common personal-investment examples; a CGT exemption does not automatically remove Income Tax, VAT or inheritance tax.

Private cars · including many classic cars

Normal passenger cars are exempt from CGT, including vintage cars of that type. The £6,000 personal-possession limit does not apply to them.

Example: you buy a classic passenger car for personal use for £20,000 and later sell it for £28,000. The £8,000 gain is exempt. A loss on an exempt car cannot offset taxable investment gains.

Vans, purpose-built taxis, racing cars and motorcycles have different rules. Business vehicles may involve capital allowances, and buying and selling cars as a trade can create taxable income.

HMRC · Road vehicles ↗

Personal possessions · the £6,000 sale-proceeds rule

Furniture, jewellery, paintings and similar movable possessions are called chattels. An eligible item's gain is exempt when its gross disposal proceeds are £6,000 or less. This is a sale-value limit, separate from your annual CGT allowance. Gifts and sales to connected people may use market value instead.

Example: a painting bought for £1,000 and sold privately for £5,500 has an exempt gain. If instead it sells for £7,200, with no buying or selling costs, the actual gain is £6,200. Marginal relief limits the chargeable gain to 5/3 × (£7,200 − £6,000) = £2,000, before losses and your available annual allowance.

For proceeds above £6,000 and up to £15,000, use the lower of the actual gain and that formula. A qualifying set sold to the same buyer, or buyers who are connected or acting together, shares one £6,000 limit even when pieces are sold separately.

HMRC · The £6,000 limit ↗ · HMRC · Calculation and set rules ↗

Possessions with a limited useful life · conditions apply

A wasting asset has a predictable useful life of 50 years or less, assessed when acquired. Such chattels are generally CGT-exempt. Plant and machinery have special rules that treat them as wasting assets regardless of their actual age.

Example: HMRC treats antique mechanical clocks and watches as machinery. A personal clock can therefore qualify even if it has already lasted more than 50 years. The exemption can fail where capital allowances were available, or for certain long-lived possessions lent to a business as plant.

Do not assume every collectible qualifies: paintings and jewellery are different, and wine's expected life depends on the wine. Trading profits are a separate Income Tax question.

HMRC · Wasting chattels ↗ · Clocks and watches ↗ · Wine and spirits ↗

Your main home · Private Residence Relief

Full relief normally requires one home that you lived in throughout ownership, no letting apart from a lodger, no area used exclusively for business, grounds within the usual 5,000m² limit, and no purchase solely to make a gain.

Example: selling the only home you have always lived in can qualify for full relief when those conditions hold. Occasionally working at the kitchen table is not exclusive business use. A former rental or second home needs a separate calculation; partial relief and permitted absences may still help.

GOV.UK · Private Residence Relief ↗

ISAs, certain bonds, sterling coins and prizes
  • ISAs: gains inside a valid ISA are exempt. HMRC also lists legacy PEP holdings.
  • Direct UK gilts and qualifying corporate bonds: capital gains are exempt. The exemption does not pass through to units in an ordinary gilt or bond fund. Interest can be taxable, and special bonds such as gilt strips can have returns taxed as income.
  • Sterling currency: this includes the sovereigns and gold Britannias covered in Coins and bullion · specialist. Foreign legal-tender coins are not covered by that sterling exemption.
  • Premium Bonds and betting, lottery or pools winnings: no CGT on these. Later returns from investing the money follow the rules of the new investment.

Example: a direct conventional gilt bought for £9,500 and redeemed for £10,000 has an exempt £500 capital gain. Its interest is assessed separately.

GOV.UK · Exempt assets ↗ · Shares, funds and bonds ↗ · HMRC · Gilts and strips ↗

Gifts · no tax now can mean tax later

Transfers between spouses or civil partners living together normally use no-gain/no-loss treatment. The recipient takes over the original CGT cost: the accrued gain has not been erased. Separation and business-stock transfers have special rules.

Example: you paid £4,000 for shares and give them to your spouse when they are worth £7,000. If they later sell for £9,000, the gain is normally measured from your £4,000 cost: £5,000 before costs, losses and reliefs.

Outright gifts to a qualifying charity normally have no CGT charge. A sale to a charity above your cost but below market value can still produce a gain. Gifts to adult children or friends generally use market value and can trigger CGT despite no cash changing hands.

GOV.UK · Gifts to a spouse or charity ↗

These examples assume personal ownership outside a trading business. Buying goods to resell for profit can bring Income Tax rules into play: HMRC · Selling goods ↗. Checked 9 September 2026.

United Kingdom · Coins and bullion

Why some gold coins carry no capital gains tax

Some sterling coins are exempt from UK Capital Gains Tax because they count as sterling currency. A gold bar is treated differently. Capital Gains Tax and VAT are separate questions.

Specialist detail: coins, bullion and VAT

The rule, in HMRC's own terms

HMRC treats sovereigns minted in 1837 or later and Britannia gold coins as exempt sterling currency. Foreign legal-tender coins, such as Krugerrands, are chargeable and cannot use the chattels exemption. Coins that are no longer legal tender, such as pre-1837 sovereigns, are personal possessions and may qualify for that exemption.

Check the specific coin

Other sterling legal-tender coins follow the general currency rule, but the HMRC page does not list every coin. Confirm the status of the specific coin, particularly collectors' coins and older issues.

VAT can still apply when a gain is exempt

Qualifying investment gold is VAT-exempt. Gold coins qualify through the published list or the tests for date, purity, legal-tender status and normal sale price. Silver bullion does not qualify for that gold exemption and is normally subject to standard-rate VAT. Collectors' items and second-hand margin schemes can have different treatment.

What you buyCapital gains taxVAT on purchase
Gold Britannia, or a sovereign minted in 1837 or laterExempt, as sterling currencyExempt if it qualifies as investment gold
Silver BritanniaExempt on the sterling principle, though HMRC does not name silver coinsNormally standard-rated at 20%
Gold or silver barChargeable; the chattels exemption may applyGold bars meeting the investment gold test are exempt; silver bars are standard rated
A foreign gold coin, for example a KrugerrandCurrency, but not sterling, so chargeable, and the chattels exemption is expressly shut off for itExempt if it meets the investment gold coin test

The VAT standard rate is 20%. Sources: VAT Notice 701/21 ↗, VAT Notice 701/21A ↗, VAT rates ↗. The silver position follows from silver being absent from the investment gold rules rather than from a sentence saying so, which is worth knowing if you are told otherwise by a dealer.

An exemption is not a reason to buy something

Coins pay no income and no dividends, they carry a dealer's buying and selling spread, and they have to be stored and insured. A tax exemption changes what you keep from a gain. It does not create one.

Canada · Registered accounts

Canada: saving, retirement and a first home

Canada uses a calendar tax year. A TFSA usually shelters investment income and withdrawals; an RRSP can give a deduction now with tax on withdrawals; an FHSA has rules for first-home saving. RRSP contributions can count for the previous year during its separate first-60-days window.

These are general Canadian rules. Eligibility depends on residence and the account; cross-border tax treatment is not assessed here. All amounts in this section are Canadian dollars.

TFSA

Tax-free savings account

Replacing a withdrawal too soon can cost tax

Withdrawals normally restore room next January. Replacing them earlier needs existing room; excess contributions face 1% monthly tax.

Contribution room, exceptions and sources

Contributions are not deductible. Eligible investment income and withdrawals are generally tax-free in Canada. Exceptions include business income and non-qualified investments. Contribution room builds from eligible years when you are at least 18 and resident in Canada, whether or not you have opened an account. Unused room carries forward.

A withdrawal is normally added back to your contribution room on 1 January of the next calendar year. Replacing it sooner uses your existing room and can create an over-contribution.

Example: withdrawing C$2,000

With no unused room, withdrawing C$2,000 in September 2026 does not allow an immediate C$2,000 replacement. That withdrawal normally restores C$2,000 of room on 1 January 2027, alongside any new annual room. CRA · Withdrawal rules ↗

RRSP

Registered retirement savings plan

Withdrawing does not restore the room

Ordinary withdrawals permanently use the room. Tax withheld is a payment towards your final tax bill, not necessarily the final bill.

Personal limits, withholding and special withdrawals

Eligible contributions can be deducted from income. Investment growth is generally tax-deferred; ordinary withdrawals are taxable. New room is generally based on the lower of 18% of the previous year's earned income or the annual dollar limit, adjusted for workplace pension benefits and unused room. Check your personal deduction limit with CRA.

Ordinary RRSP withdrawals are taxable and do not restore contribution room. Canadian-resident withholding rates are 10%, 20% or 30% depending on the amount; Quebec uses different federal rates plus provincial withholding. The final tax depends on your income. The Home Buyers' Plan and Lifelong Learning Plan have separate rules.

FHSA

First home savings account

Opening and withdrawing have different tests

Other cash withdrawals are generally taxable. Opening an FHSA does not by itself establish eligibility for a tax-free home withdrawal.

Contribution room, transfers and the Home Buyers’ Plan

For eligible first-time home buyers. Contributions are generally deductible; qualifying home withdrawals, including growth, are tax-free. Room starts only when you open your first FHSA. Transfers from an RRSP use FHSA room but do not create a second deduction.

The Home Buyers' Plan allows eligible withdrawals of up to C$60,000 from an RRSP, normally repayable over 15 years. It can be used with an FHSA for the same qualifying purchase. CRA · Home Buyers' Plan ↗

Who qualifies and when it closes

To open an FHSA, you must be Canadian-resident, at least 18 (19 where required to enter a contract), and no older than 71 at year-end. During the current calendar year before opening and the preceding four calendar years, you must not have lived in a home you owned, or one owned by your current spouse or common-law partner, as your main home. CRA · Opening conditions ↗

Close all FHSAs by 31 December of the earliest relevant year: the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal. Eligible direct transfers to an RRSP or RRIF can defer tax; they differ from cash withdrawals. CRA · Closing and transferring ↗ · CRA · Withdrawal conditions ↗

The non-registered account

No wrapper at all

Half the gain is not a 50% tax rate

The taxable half is combined with other income. Your actual tax rate depends on your circumstances.

Capital gains and Canadian dividend treatment

Outside registered accounts, interest is generally taxable as ordinary income. Eligible Canadian dividends use a gross-up and tax-credit system; foreign dividends do not receive the same treatment. Normally half of a capital gain is included in taxable income.

The proposed increase to a two-thirds capital-gains inclusion rate was cancelled. The general inclusion rate remains one half; this is the taxable share of the gain, not a 50% tax rate.

How unused contribution room works

Unlike an unused UK ISA allowance, unused TFSA and RRSP room can carry forward. The amount depends on your eligible years, residence, earnings and previous transactions. It is not automatically the same for everyone of a given age.

An FHSA has a maximum participation period. Unused savings can generally transfer directly to an RRSP or RRIF on a tax-deferred basis; a cash withdrawal that does not qualify for a home purchase is generally taxable.

Sources for this section
Australia · Superannuation

Australia: superannuation and taxable investments

Australian superannuation is retirement saving with rules for contributions, investment earnings and withdrawals. Tax treatment depends on the type of contribution, fund and payment. The financial year runs from 1 July to 30 June.

These are general Australian rules. Eligibility and tax treatment depend on residence, employment and the fund. Cross-border eligibility is not assessed here. All amounts are Australian dollars.

The Superannuation Guarantee

Compulsory contributions for eligible workers

Employer payments are separate from salary sacrifice

Salary sacrifice cannot reduce what the employer owes. Employer payments and your deductible contributions share the concessional cap.

Payday timing, contribution caps and sources

Employers must generally pay super guarantee contributions for eligible employees. Since 1 July 2026, contributions must generally be paid on payday and reach the fund within seven business days. Extended deadlines apply in some cases. ATO · Payday Super ↗

Money you choose to put in on top is separate from the 12% the employer must pay. An arrangement that cuts the employer's obligation is not allowed.

Example: A$1,000 paid into super

Assume an A$1,000 concessional contribution is taxed at the standard 15%, with no extra contribution tax or offsets. A$150 is tax and A$850 remains invested, before other charges. This is contribution tax, not a forecast of investment returns. CSC · Contribution tax ↗

Putting more in yourself

Two caps, two kinds of money

High income can mean extra contribution tax

Division 293 can add 15% when income plus relevant contributions exceeds A$250,000. It applies to the smaller of those contributions or the excess.

Carry-forward, bring-forward and high-income rules

Concessional contributions include employer payments, salary sacrifice and eligible personal contributions claimed as a deduction. They are generally taxed at 15% in a complying fund. Non-concessional contributions use after-tax money with no deduction and are generally not taxed again on receipt. Different caps apply.

Division 293 adds 15% tax to the smaller of your relevant concessional contributions or the amount by which income plus those contributions exceeds A$250,000. It does not automatically apply to every contribution.

When you can withdraw super

Preserved until a condition is met

Reaching 60 is not enough on its own

Preservation age is 60 for people born from 1 July 1964. A condition of release must also be met.

Withdrawal tax, personal caps and Division 296

Access normally requires a condition of release. For people born from 1 July 1964, preservation age is 60; reaching it alone does not give unrestricted access. Retirement or ending employment from 60 can qualify, while access is generally unrestricted at 65. Limited early-release rules also exist.

Division 296 is now law and in force

From 1 July 2026, Division 296 adds 15% tax to specified earnings attributable to total super above A$3 million, and another 10% for the portion above A$10 million. The thresholds are indexed and the first assessments are expected in 2027/28. Calculation and exception rules apply. CSC · Division 296 explained ↗

Outside super

An ordinary brokerage account

The discount is legislated to change from 1 July 2027

Future gains move to indexation and minimum-tax rules, with exceptions and transitions. Federal Register · Reform ↗

CGT changes and franking-credit conditions

Outside super, eligible Australian-resident individuals can generally reduce a capital gain by 50% after holding an asset for at least 12 months. Australian dividends may include franking credits for company tax already paid; entitlement depends on the dividend and shareholder.

The general 50% discount remains for eligible individual gains in 2026/27. Legislation changes the treatment of gains accruing from 1 July 2027 to cost-base indexation and a minimum tax, with exceptions and transitional rules. Check the rules for the specific asset and period. Federal Register · Tax Reform No. 1 Act 2026 ↗

Comparing systems takes more than a percentage

Current caps are also set out by the Commonwealth Superannuation Corporation: CSC · Tax and your super ↗ · CSC · Bring-forward limits ↗.

UK automatic enrolment normally allows an opt-out. Australian super guarantee contributions are generally compulsory for eligible workers. The percentages use different earnings definitions, so comparing 8% and 12% alone does not compare the full benefits.

Franking credits can offset an eligible Australian shareholder's tax, and excess credits may be refundable. Holding-period and related-payment rules apply; foreign investors do not receive the same treatment.

Sources for this section
United States · Retirement accounts

US retirement and other tax-advantaged accounts

Employer retirement plans, IRAs, health savings accounts and education plans each have different eligibility, contribution and withdrawal rules. The tax treatment below is US federal treatment; state rules can differ.

These are general US federal rules. Eligibility depends on the account, employment, compensation and other conditions. Cross-border eligibility and tax treatment are not assessed here. Amounts are US dollars.

401(k), 403(b), 457(b)

Through an employer

Early access can cost extra

Taxable 401(k)/403(b) withdrawals before 59½ generally face an extra 10%, unless an exception applies. IRS · Exceptions ↗

Catch-ups, employer limits and Roth requirements

Many employer plans accept pre-tax contributions or after-tax Roth contributions. Employer matching depends on the plan and may have vesting conditions. The age-based catch-ups below apply to 401(k), 403(b) and governmental 457(b) plans. Non-governmental 457(b) plans have no age-50 catch-up, but may permit a special catch-up in the three years before normal retirement age. IRS · Non-governmental 457(b) plans ↗

For 2026, the age-based catch-up generally must be Roth if your prior-year Social Security wages from that employer exceeded $150,000. A plan without a Roth feature cannot accept that affected catch-up. Special 457(b) catch-ups follow separate rules.

Traditional IRA and Roth IRA

Opened by you, not your employer

Withdrawal rules depend on the money’s origin

Taxable withdrawals before 59½ generally face an extra 10%. Roth contributions, conversions and earnings have different rules, including two five-year clocks. IRS · Withdrawals ↗

Income limits and the Roth five-year rules

Traditional and Roth IRAs share one annual contribution limit, also limited by eligible compensation. A traditional IRA deduction may be reduced by income if you or your spouse has a workplace plan; that does not necessarily prevent a non-deductible contribution. Direct Roth IRA contributions have their own income limits.

For earnings to be withdrawn tax-free, the Roth IRA five-tax-year rule and a qualifying condition, such as age 59½, must be met. Conversions have separate five-year rules relevant to the early-distribution penalty. Regular contributions, conversions and earnings are treated differently. IRS · Roth IRA withdrawals ↗

HSA

Only with a qualifying health plan

Medicare and part-year eligibility affect your limit

No contributions for Medicare-covered months, including backdated coverage. Part-year eligibility can reduce the annual limit. IRS · Eligibility ↗

Age-55 catch-up, health-plan rules and withdrawal exceptions

You must have no disqualifying other health coverage and cannot be claimable as another taxpayer's dependent. Eligibility generally depends on your coverage on the first day of each month; a last-month rule has a further testing period. IRS · Eligibility conditions ↗

Eligible personal contributions are federally deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Employer contributions count towards the limit. Non-medical withdrawals can be taxable and may face an extra charge. Eligibility depends on coverage and other conditions, including Medicare enrolment.

From January 2026, qualifying bronze and catastrophic individual plans can be HSA-compatible even if they do not meet the standard HDHP limits. IRS · Expanded HSA eligibility ↗

  • Additional contribution, eligible age 55 or over$1,000IRS · Publication 969 ↗ · age at year-end; employer payments count towards the total limit

The extra 20% tax on non-medical withdrawals does not apply after age 65, disability or death; ordinary income tax can still apply. If both eligible spouses claim the age-55 additional contribution, each must pay theirs into their own HSA. IRS · Additional contributions and withdrawals ↗

Example: HSA room at age 57

A 57-year-old eligible throughout 2026 with self-only coverage and no Medicare has US$4,400 + US$1,000 = US$5,400 of room. If their employer pays US$1,000, US$4,400 remains for other contributions. IRS · Catch-up and employer payments ↗

529 plan

For education costs

Using it for other spending can trigger tax

Non-qualifying earnings are generally taxable, plus an extra 10% unless an exception applies. Roth IRA rollovers have strict limits. IRS · Withdrawals ↗

Education withdrawals and the restricted Roth rollover

Qualifying education withdrawals, including growth, are federally tax-free. For non-qualifying withdrawals, the earnings portion is generally taxable, with an extra 10% tax unless an exception applies. IRS · Education withdrawals ↗

A direct transfer to the beneficiary's Roth IRA is limited to $35,000 over their lifetime and eligible annual IRA room. The 529 must have been open at least 15 years; contributions and related earnings from the last five years cannot roll over. Other conditions apply. IRS · 529 rollover conditions ↗

Traditional and Roth: when tax is paid

A deductible traditional contribution receives relief now; taxable withdrawals come later. Roth contributions receive no deduction, while qualified withdrawals are tax-free. With the same pre-tax starting amount, returns, fees and tax rate, the arithmetic can match. Access rules, contribution limits and required distributions also matter.

Taxable withdrawals from a traditional IRA, 401(k) or 403(b) before 59½ generally face an extra 10% tax unless an exception applies. Workplace plans also restrict when withdrawals are available. Governmental 457(b) withdrawals generally avoid that extra tax, except on money rolled in from another plan or IRA. IRS · Early withdrawal rules ↗

Required minimum distributions generally start at 73 for people born in 1951–1959 and at 75 for those born in 1960 or later; older cohorts have earlier rules. Some workplace plans allow later starts while working. Roth IRAs and designated Roth workplace accounts have no required distributions during the owner's lifetime. Beneficiary rules differ.

IRS · Publication 590-B ↗ · IRS · Required minimum distributions ↗

Sources for this section
United States · Taxable brokerage

US brokerage: income, gains and losses

An ordinary brokerage account has no retirement-plan contribution cap or retirement-age withdrawal rule. Interest, dividends and realised gains may be taxable. Unrealised share-price growth is generally not taxed each year, and some investments have exemptions or special rules.

How long you held it changes the rate

The 0% bracket is not a separate allowance

The bracket depends on total taxable income including gains. State taxes, the 3.8% investment-income tax and special asset rules may also apply.

2026 capital-gains brackets and additional taxes

Most share gains are short-term if held for one year or less, and long-term if held longer. Long-term gains generally use federal rates of 0%, 15% or 20%. The brackets below refer to total taxable income, including the gains, not a separate tax-free allowance. State taxes and special asset rules may also apply.

The wash sale rule

Your broker may not catch it

The rule can span brokers and include your spouse’s purchases. Check all relevant accounts even if Form 1099-B reports no wash sale.

Matching purchases, IRA exceptions and loss deductions

If you sell at a loss and buy the same or a substantially identical security within 30 days either side of that sale, the loss is disallowed. In an ordinary account it is added to the cost of the replacement instead, so it is postponed rather than lost. The window is 61 days in total, and it counts your spouse's purchases and your own IRA purchases too, with a sting in that second one: buy the replacement inside an IRA or Roth IRA and there is no cost of a replacement to add it to, so that loss is gone for good. IRS · Publication 550, the four triggers and the exception ↗

The disallowed amount appears on Form 1099-B only in some cases. The IRS is explicit that the rule applies even where it is not reported there, which means a wash sale across two different brokers is yours to spot.

  • Net capital loss deductible against ordinary income$3,000 a yearIRS · Publication 550 ↗ · $1,500 married filing separately, the rest carries forward indefinitely
Not every dividend is taxed the same way

Qualified dividends generally use long-term capital-gains rates; non-qualified dividends use ordinary income rates. Qualification requires an eligible payer and holding conditions. For common shares, the usual holding test is more than 60 days within the 121-day window beginning 60 days before the ex-dividend date. Form 1099-DIV reports total ordinary dividends and the qualified portion separately.

IRS · Publication 550 ↗ · IRS · About Form 1099-DIV ↗

Sources for this section
United Kingdom · Worked examples

Four worked examples

These fictional examples show specific rules and chosen assumptions. They do not assess whether an account suits your circumstances.

Made-up example

Priya is 22 and has started her first job

£24,000 a year

Read the example and calculation

She is inside the age and earnings band where an employer must enrol her, so the contribution is charged on the slice of her pay between £6,240 and £50,270.

Qualifying earnings£17,760
Employee contribution, 5% gross£888.00
Her employer pays 3%£532.80
Into the pension that year£1,420.80

Under relief at source, Priya pays £710.40 and receives £177.60 basic-rate relief. The employer adds £532.80. Opting out would not add the full £888 to her take-home pay. Other payroll methods change the take-home calculation.

Made-up example

Marcus is 35 and pays higher rate tax

£8,000 to invest for twenty years

Read the example and calculation

Assume a 7% annual total return including reinvested dividends, a 2% dividend yield, and no further payments for 20 years. Everything is sold at the end. This is a fixed-rate illustration using 35.75% dividend tax, 24% CGT and the full current allowances each year.

Inside a stocks and shares ISA£30,957
In an ordinary account£27,722
Dividend tax along the way£60
Capital gains tax on the sale£3,174
Difference£3,235

Charges are not in this sum and they come out of both. Growth is a number chosen for the illustration, not a forecast. Amounts are rounded. To reproduce this in the calculator, use £8,000 to start, £0 regular payments, 20 years, 7% return, 2% dividend yield and Higher rates.

Made-up example

Tom is 29 and has £3,000 in savings

Basic rate taxpayer, 4% interest

Read the example and calculation

Assume his full £1,000 Personal Savings Allowance is available and he has no other savings interest. An ISA would not reduce tax on this year's £120 interest.

Interest in a year£120
Personal Savings Allowance£1,000
Interest actually taxable£0
Tax a cash ISA would save him£0

At a constant 4%, £25,000 produces £1,000 annual interest. That uses this assumed allowance exactly. Compare account rates and access terms even when no tax is due.

Made-up example

Anita is 41 and has just heard about the Lifetime ISA

Saving towards a first home

Read the example and calculation

Anita cannot open and start a new Lifetime ISA at 41. If she had opened and paid into one before 40, she could normally continue contributing until 50.

Age you can open one18 to 39
Age you can keep paying in to one you already holdUntil 50
Open a new Lifetime ISA at 41No

The age rule is separate from the first-home purchase conditions and withdrawal charge.

Official help

For US federal tax rules, see the IRS Interactive Tax Assistant ↗. The support directory below is for the UK.

For Canadian account and contribution rules, see the CRA registered savings plans guide ↗. The support directory below is for the UK.

For Australian super rules, see the ATO superannuation guide ↗. The support directory below is for the UK.

UK guidance and support

These UK services provide guidance, help with complaints, or checks on financial firms. For questions about another country, use the authority linked in that country's section.

Guidance about your own money

MoneyHelper Free, impartial money guidance backed by government. Covers pensions, savings, borrowing and debt. Guidance rather than advice: it will talk you through the options, not pick one for you. moneyhelper.org.uk ↗ Pension Wise Free government-backed guidance on defined contribution pensions, normally from age 50, with some earlier-access exceptions. It does not cover defined benefit pensions. Part of MoneyHelper · 0800 011 3797 ↗ Choosing a financial adviser For a recommendation about your own position you need a regulated adviser. This explains what to ask, what the different kinds cost, and how to tell independent from restricted. MoneyHelper ↗

Checking somebody is who they say they are

FCA Firm Checker Check whether a firm is authorised and has permission for the service offered. Match its contact details to avoid clone firms. If you cannot find it, contact the FCA. fca.org.uk · 0800 111 6768 ↗ Financial Services Register The full public record behind the checker: what a firm is permitted to do, its history, and the individuals attached to it. register.fca.org.uk ↗ Protect yourself from scams Learn the warning signs of investment and pension scams, and what to do if you have been targeted. Check unexpected offers independently before sharing details. fca.org.uk ↗

Help with debt

Free debt advice GOV.UK's own list of free debt advice services. Free help is always available, and nobody should pay a fee to be told how to deal with debt. gov.uk/debt-advice ↗ National Debtline Free, confidential debt advice by phone and online. nationaldebtline.org · 0808 808 4000 ↗ StepChange Free debt advice and managed debt solutions, including a full online assessment. stepchange.org · 0800 138 1111 ↗

Complaints and compensation

Financial Ombudsman Service Free, independent help with eligible financial complaints after you have first complained to the firm. Time limits and jurisdiction rules apply. This educational service is not covered. financial-ombudsman.org.uk · 0800 023 4567 ↗ Financial Services Compensation Scheme May compensate eligible claims when a covered financial firm fails. Limits and product-specific conditions apply. This educational service is not covered. fscs.org.uk · 0800 678 1100 ↗

Reviewed 9 September 2026 for UK 2026/27, US 2026, Canada 2026 and Australia 2026/27. Sources beside the rules link to the relevant authority. Worked examples are arithmetic illustrations; they do not forecast returns or calculate your personal tax bill. Rates, eligibility and tax treatment can change. Check the current official guidance before acting.