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Do I pay tax on money invested in Nutmeg?

We've updated this guide on 6th October 2021

So, do you pay tax on money invested in Nutmeg? Well that depends – it’s a little bit more complicated than a straight yes or no answer.

Ultimately, whether you’ll pay tax depends on the type of investment you’ve put money into. In the blog below we’ll break down exactly what Nutmeg is, and whether or not you need to worry about tax on your investments.

What is Nutmeg?

Nutmeg is the UK’s first and largest digital wealth manager, with over 140,000 customers using their investment services. It caters to people who want to put money into investments, but also want the important decisions made for them. They’re also one of our TaxScouts partners.

Once you’ve created an account with Nutmeg, you can invest in:

  • A Stocks & Shares ISA
  • A Lifetime ISA
  • A Junior ISA
  • A Personal Pension
  • A General Investment Account (GIA)

However, like any investing or trading instrument, it’s important to know about the risks and rules surrounding taxation before you start investing.

Do I pay tax on money invested in Nutmeg?

Whether you’ll pay tax on money invested in Nutmeg, depends on the type of Investment service you use:


One of the benefits of putting money into an ISA is that it’s sheltered from both Income Tax and Capital Gains Tax

Meaning? Anything you contribute to an ISA, up to the annual allowance of £20,000 in the 2021/22 tax year, is exempt from tax. If you have a Stocks & Shares ISA, you’re also eligible for a £2,000 tax-free Dividend Allowance on top of your Personal Allowance. Any profit you make when selling investments in your stocks and shares ISA is also free of Capital Gains Tax.

So is Nutmeg tax-free? When it comes to their ISAs, and as long as you stick within your £20,000 allowance, the answer is yes!

3 things to remember about ISAs 

  1. If you’re a UK resident, you can invest money in ISAs each year up to a specific limit (£20,000 in the 2021/2022 tax year)
  2. You can only invest in one of each kind of ISA each year
  3. You don’t need to do a Self Assessment tax return for gains made from an ISA


Nutmeg offers personal pension investments, but are they tax-free also? Yes! Investing in a personal pension gives you many tax advantages such as tax relief on the money you contribute to your pension. Your pension pot can also grow pretty much tax-free, and you can take some of your pension pot as a tax-free lump sum (25% after the age of 55).

General Investment Account (GIA)

A general investment account (GIA) is an account that allows you to hold investments outside of your ISA or pension. However, unlike ISAs or personal pensions, there are no tax benefits, but you can contribute as much money as you want.

This means that if you have a GIA with Nutmeg, you’ll pay Income Tax on any income you receive from it, as well as Capital Gains Tax on any realised gain you make on your GIA. You pay this by filing a Self Assessment tax return with HMRC.

The exact amount of tax you’ll pay depends on your personal tax situation. ​​You can use our Capital Gains Tax calculator to work out how much you need to pay below:

Where did you get profits?
Profits from capital gains
Annual income
Outside of capital gains
Select tax year
Profits after tax
Profits from selling shares
Capital Gains Tax (CGT)

First £12,300 are tax-free.

£1,000 taxed at 10%: £100

£6,700 taxed at 20%: £1,340

Your profits after tax

Hey there! We really hope this calculator helped you. Tax matters can be a dreadful topic at times. We know. That’s why we started TaxScouts.
A stress-free way to getting your taxes done.

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How your capital gains tax is calculated

Your total capital gains tax (CGT) owed depends on two main components:

  1. How much you earn in total
  2. What type of assets you sell

Your overall earnings determine how much of your capital gains are taxed at 10% or 20%.
Our capital gains tax rates guide explains this in more detail.

In your case where capital gains from shares were £20,000 and your total annual earnings were £69,000:

Capital gains tax (CGT) breakdown

You pay no CGT on the first £12,300 that you make

You pay £100 at 10% tax rate for the next £1,000 of your capital gains

You pay £1,340 at 20% tax rate on the remaining £6,700 of your capital gains

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