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Where Taxpayers and Advisers Meet

using CGT allowance

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Joined: Wed Aug 06, 2008 3:34 pm

Postby chloedad » Mon Feb 20, 2006 2:43 am

my wife and i have invested in unit trusts and the capital gains significantly out weigh our CGT allowance this year. at some point over next few years we may wish to sellinvestrmenyts to buy a car and don't want to crystallise a capital gain in that year sufficent to have to pay CGt. does it make sense to sell sufficient units to use our current yaer CGt allowance and then re invest the proceeds to reset the CGT calculation on that ammount? Didn't this used to be called bed and breakfasting?

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Postby hashman » Mon Feb 20, 2006 2:53 am

Yes - repurchases within 30 days are caught. But you can get aroung this rule by you selling and your wife repurchasing (now called 'Bed and Wife')

Lee Young
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Joined: Wed Aug 06, 2008 3:26 pm

Postby Lee Young » Mon Feb 20, 2006 2:54 am

Yes - sell as many as will use up the annual exemption each year. If you buy each other holdings back this will mean that there is no risk of loss to the value of the portfolio.
Lee Young
Solicitor, Chartered Tax Adviser and Trust and Estate Practitioner

Partner, Frettens LLP
01202 491701

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Joined: Wed Aug 06, 2008 3:28 pm
Location: Loughborough

Postby jpcentral » Mon Feb 20, 2006 2:55 am

Bed and Breakfasting is no longer allowed. If you sell shares and repurchase them within 30 days the transaction is ignored for CGT purposes. You can either sell them and wait 30 days before repurchasing or sell them and buy something else.

You can sell in two separate tranches either side of the financial year end to take advantage of two years' allowances.

John Perry
Central Business Services
John Perry
Central Business Services

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Postby bob.fraser@towrylaw. » Mon Feb 20, 2006 3:01 am

You should consider "bed and ISA".
In other words, you each use £7,000 of the realised gain to invest in unit trusts within the Individual Savings Account regime, which means that the future growth (if any!) is free from CGT.

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Joined: Wed Aug 06, 2008 3:15 pm

Postby Lambs » Mon Feb 20, 2006 4:24 pm

Drat, is "Bed and Wife" no longer allowed?

Better tell the Mrs., who sleeps soundly as we speak, snuggled up in the covers...

she will NOT be happy if I tell her that beds and wives are no longer compatible, particularly if I find out that I am wrong some time tomorrow.

There'll definitely be sense of humour failure over the breakfast cereal tomorrow.

Here goes...


soon to be lamb chop

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