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Where Taxpayers and Advisers Meet

Bed and breakfasting - when is CGT due?

Carver100
Posts:4
Joined:Wed Mar 17, 2021 1:39 am
Bed and breakfasting - when is CGT due?

Postby Carver100 » Wed Mar 17, 2021 3:07 am

Hi

I would be grateful for help regarding CGT, the bed and breakfasting rules and when tax becomes payable.

For example: (Ignoring expenses to keep it simpler)

On 10 April 2020 I buy 1,000 shares at £10 each in company "Big Oil" for £10,000.

On 10 June 2020 I sell my 1,000 Big Oil shares for £15 each for £15,000.

On 20 June 2020 I buy 1,000 Big Oil shares for £12.50 each for £12,500.

As I understand the B&B rules, this means that my gain on 10 June did not crystallise because I bought the shares again within 30 days. So, assuming there is no further sale in the 20/21 tax year, am I right in thinking that there is no countable gain on which tax is due in relation to these transactions for 20/21 and that any CGT liability will only fall due in the event of a later chargeable sale which results in an overall gain?

My supplementary query is could one keep doing this? So;

On 10 June 2021 I sell my 1,000 Big Oil shares for £15 each for £15,000
On 20 June 2021 I buy 1,000 Big Oil shares for £12.50 each for £12,000

Assuming there is no further sale of the shares during the 21/22 tax year does this mean that again no gain has crystallised so that there would be no countable gain for 21/22 in which CGT could be due in respect of the Big Oil transactions?

I appreciate that the gains in question would be less than the annual allowance but I am just trying to understand if the actual need to count gains towards overall annual chargeable CGT in relation to these specific transactions can be suspended to a later tax year by re-buying sold shares within 30 days.

I hope the question makes sense.

Many thanks

Jim

Stats
Posts:12
Joined:Mon Mar 05, 2018 10:07 pm

Re: Bed and breakfasting - when is CGT due?

Postby Stats » Sat Mar 20, 2021 3:49 pm

Looks to me that each re-purchase will match against each recent sale, under the "30-day" rule, leaving your original purchase still intact for a future CGT event.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Bed and breakfasting - when is CGT due?

Postby bd6759 » Mon Mar 22, 2021 12:30 am

http://cgtcalculator.com/

Carver100
Posts:4
Joined:Wed Mar 17, 2021 1:39 am

Re: Bed and breakfasting - when is CGT due?

Postby Carver100 » Thu Mar 25, 2021 12:15 am

Thank you stats. My hope is to keep buying back within 30 days of a sale so retaining the holding for dividends and never becoming liable for CGT - but each time ideally buying at a lower price than the sale price.

Although perhaps if this is done and works too many times it could be seen as income and liable to income tax!

I have tried the tax calculator BD, but I only have Apple devices and it keeps saying invalid entry, even if try an exported file to Word etc, but thank you for the suggestion.

All the best

Jim


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