Using ISA & SIPP for Value Investing
UK investors have access to two powerful tax-free wrappers that can dramatically improve your long-term returns: the Individual Savings Account (ISA) and the Self-Invested Personal Pension (SIPP).
Stocks and Shares ISA
- Tax-free capital gains
- Tax-free dividends
- £20,000 annual allowance
- Withdraw anytime
- No reporting to HMRC
- £20,000 per year limit
- Cannot carry forward unused allowance
- UK-listed stocks, ETFs, and some ADRs
- Must be 18+ and UK resident
SIPP (Self-Invested Personal Pension)
A SIPP offers even greater tax relief — contributions receive 20% tax relief automatically (40% for higher-rate taxpayers), but you cannot access the money until age 55 (rising to 57 in 2028). SIPPs are ideal for long-term value investing strategies like net-nets where the holding period aligns with the decades-long investment horizon.
Net-Nets in an ISA
All four of our current UK net-net stocks (BYIT.L, TRN.L, SLR.L, VTL.L) are ISA and SIPP eligible. This means any gains from the Graham strategy are completely tax-free within these wrappers. At historical returns of 31% annually, the tax savings compound dramatically over time.