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Where Taxpayers and Advisers Meet

bed and breakfast rule clarification

marinero
Posts:4
Joined:Mon Feb 01, 2021 1:42 pm
bed and breakfast rule clarification

Postby marinero » Fri Feb 19, 2021 10:34 am

I am a little bit confused about one of the consequences of the bed & breakfast rule.

Am I right in thinking that if:

* on day 1 I sell 100 shares making 10,000 capital gains profit
* on day 5 I buy these 100 shares again for the same price I sold them (call it trading error)

i then pay no capital gains tax because I made the purchase of the same amount for the same price within a 30 day period?

Is this correct?

maths
Posts:8157
Joined:Wed Aug 06, 2008 3:25 pm

Re: bed and breakfast rule clarification

Postby maths » Fri Feb 19, 2021 4:37 pm

Agreed. Under the B & B rules a disposal is matched with purchases within then next 30 days.

So if you sold 100 shares at say £10/share and repurchased 100 at the same price within following 30 days then no gain arises.

bd6759
Posts:3518
Joined:Sat Feb 01, 2014 3:26 pm

Re: bed and breakfast rule clarification

Postby bd6759 » Fri Feb 19, 2021 4:59 pm

But your base cost remains as it was for the original purchase - you've still got those shares.

marinero
Posts:4
Joined:Mon Feb 01, 2021 1:42 pm

Re: bed and breakfast rule clarification

Postby marinero » Fri Feb 19, 2021 5:59 pm

thank you both for the answer. I am relieved to see that my trading error did not cause me to erode part of the annual capital gains allowance.


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