Can ‘bed and spousing’ act as a hedge against an increase in CGT?
Before March 1998 ‘bed and breakfasting’ of shares was a generally accepted piece of tax planning. This would work by an investor selling shares to realise a gain and then buying them back immediately on the market. “Why did they want to make a gain?” I hear you asking. This was usually done to crystalise a gain which was equivalent to the CGT annual exemption which would otherwise have been lost. From March 1998 new rules were introduced which made this approach more difficult.
March 1998 ‘30-day rule’
From March 1998 this kind of planning was somewhat scuppered by a rule that said that any acquisitions of the same shares within 30 days of a disposal would be matched with the disposal proceeds. Therefore on the basis that acquisition costs were generally equivalent...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this article in full.
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
Home >Articles > Bed and breakfasting before the Budget?
Bed and breakfasting before the Budget?
Can ‘bed and spousing’ act as a hedge against an increase in CGT?
Before March 1998 ‘bed and breakfasting’ of shares was a generally accepted piece of tax planning. This would work by an investor selling shares to realise a gain and then buying them back immediately on the market. “Why did they want to make a gain?” I hear you asking. This was usually done to crystalise a gain which was equivalent to the CGT annual exemption which would otherwise have been lost. From March 1998 new rules were introduced which made this approach more difficult.
March 1998 ‘30-day rule’
From March 1998 this kind of planning was somewhat scuppered by a rule that said that any acquisitions of the same shares within 30 days of a disposal would be matched with the disposal proceeds. Therefore on the basis that acquisition costs were generally equivalent...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
