What is the 30-day bed-and-breakfast rule for CGT?

Full answer

The **30-day bed-and-breakfast rule** is an anti-avoidance provision in UK capital gains tax law (TCGA 1992, s.106A) that prevents investors from selling shares to crystallise a loss and immediately buying them back — effectively keeping their position while claiming a CGT loss. **CGT matching order for shares:** When you dispose of shares, HMRC matches the disposal in this order: 1. **Same-day acquisitions** — shares acquired on the same day as the disposal 2. **30-day acquisitions** — shares acquired within 30 days *after* the disposal date 3. **S104 pool** — the average cost pool of all other holdings This means: if you sell 1,000 shares on 1 June and buy 1,000 of the same shares on 20 June (within 30 days), the June 20 acquisition is matched against the June 1 disposal — and the loss or gain is calculated using those prices, not the pool cost. **Why this matters:** If shares have fallen in value, investors previously sold them (crystallising a CGT loss) and bought them straight back — using the loss to offset other gains, while maintaining their holding. The 30-day rule eliminates this. **How to avoid triggering the rule:** - **Wait 31 days** before rebuying (price risk applies) - **Buy a different but similar fund** (e.g. sell Vanguard FTSE 100 tracker, buy iShares FTSE 100 tracker) - **Bed and ISA** — sell outside, repurchase inside an ISA (the ISA wrapper means it's not the same tax pool — rule doesn't apply) - **Bed and SIPP** — same logic as Bed and ISA - **Bed and Spouse** — spouse buys the shares; they are a different taxpayer **Using the rule deliberately for loss harvesting:** The 30-day rule can also be used intentionally — sell shares in a loss position, crystallise the loss for CGT offset purposes, wait 31 days, then repurchase if still desired.

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