Answers · UK 2025/26
What is "Bed and ISA"?
Bed and ISA = selling shares held outside an ISA, then immediately rebuying them inside your ISA. Triggers CGT on the disposal (use £3,000 annual exemption) but future gains and dividends become tax-free forever. Common end-of-tax-year tactic.
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UK Bed and ISA mechanics 2025/26. Sell shares/funds held in GIA → buy back same/similar inside ISA. Triggers CGT (gain − £3,000 AEA, 18%/24% rate). Rebought inside ISA: future gains/dividends tax-free. Restrictions: limited to £20k/year ISA allowance; 30-day rule does NOT apply to bed-and-ISA (selling and rebuying inside ISA is allowed); but for non-ISA bed-and-breakfast within 30 days, gain matched to original cost. Worked example: £30k FTSE 100 ETF in GIA, base cost £20k, gain £10k. Sell: £7k taxable after AEA; £1,260 CGT at 18%. Buy inside ISA: future gains tax-free forever. Over 20 years saves £15k+ in dividend tax + CGT for higher-rate taxpayers.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.