Glossary · UK
What is Bed and ISA Strategy?
Selling investments and repurchasing them inside an ISA to shelter future gains, while using the annual CGT exempt amount.
Full Definition
A Bed and ISA involves selling investments held in a general investment account (GIA) and immediately repurchasing the same investments inside an ISA wrapper. Once inside the ISA, all future gains and income are free from UK tax. The sale crystallises any gain or loss in the GIA, which can be offset against the annual CGT Exempt Amount (£3,000 for 2026/27). Unlike the 'bed and breakfast' rule which imposes a 30-day repurchase restriction, there is no waiting period for a Bed and ISA because the repurchase is inside a tax-advantaged wrapper rather than the same account. For 2026/27 the ISA allowance is £20,000. Investors should note that shares sold to fund an ISA subscription must settle before the ISA contribution deadline (5 April), and market exposure is briefly lost during the transaction.