CGT bed & breakfasting, calculations

edited 29 November 2009 at 9:26PM in Cutting Tax
6 replies 950 views
mark306mark306 Forumite
49 Posts
Part of the Furniture Combo Breaker
edited 29 November 2009 at 9:26PM in Cutting Tax
I'm getting terribly confused with the CGT bed and breakfasting rules.
http://charterconsultation.hmrc.gov.uk/helpsheets/hs284.pdf
I've provided a hyptherticial senario (as using my real shares is just too confusing at the moment)

01/01/2009. Buy 100 shares at £10 each costing a total of £1,000.
02/01/2009. Sell 100 shares at £20 each for a total of £2000. £1000 profit.
10/01/2009. Buy 100 shares at £20 each for a total of £2000.
11/01/2009. Sell 100 shares at £20 each for a total of £2000. No profit.

Overall I've made £1000 profit.

However if I follow the bed and breakfasting rule the £1000 profit shows as a £1000 loss, as the when I sold the shares on the 02/01/2009 I have to use the cost price associated with the shares bought on the 10/01/2009 £20.

I'm pretty sure I'm doing something wrong; could someone explain.:confused:

Regards
Mark

Replies

  • CLAPTONCLAPTON Forumite
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    the shares buy on 10/ are matched with those sold on 2/ i.e. no profit or loss

    the shares sold on 11 are matched with those bought on 01 ie. 1,000 profit

    so you have a profit of 1,000
  • edited 30 November 2009 at 11:39AM
    mark306mark306 Forumite
    49 Posts
    Part of the Furniture Combo Breaker
    edited 30 November 2009 at 11:39AM
    Thanks that seemed simple enough, but I'm still a little confused. I'll provide my real life example.

    I have 4,558 shares with a value of £5,998.32 in my S104 holding.
    Then I made the following transatctions:
    52515448.png

    (PlainText: )
    Acc Type, Type, Date, Qty, Value, Profit
    , , , 4,558, £5,998.32,
    Dealing, Sell, 21/04/2009, 4,558, £9,176.81, £3,178.49
    Dealing, Buy, 22/04/2009, 4,316, £8,999.75, £3,178.49
    Dealing, Sell, 24/04/2009, 4,316, £9,855.35, £4,034.10
    Dealing, Buy, 27/04/2009, 3,677, £8,999.49, £4,034.10
    Dealing, Sell, 13/05/2009, 3,677, £9,512.76, £4,547.37
    Dealing, Buy, 14/05/2009, 4,040, £9,998.12, £4,547.37
    Dealing, Sell, 20/05/2009, 4,040, £11,812.45, £6,361.70
    Dealing, Buy, 20/05/2009, 4,068, £11,998.61, £6,361.70
    Dealing, Sell, 12/06/2009, 2,468, £7,416.50, £6,498.81
    ISA, Buy, 12/06/2009, 2,443, £7,198.50, £6,498.81
    Dealing, Sell, 09/09/2009, 557, £1,962.00, £6,819.56



    What is my Capital gain following the bed and breakfasting rule?
    Your help would be much appreicated as I am rubbish at this sort of thing. :T

    Mark
  • mrkbrrwsmrkbrrws Forumite
    337 Posts
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    At least you have plenty of time to sort this out, all of those disposals fall in the 2009/10 tax year and the CGT will be due by 31 January 2011.

    You need to work through the sales in date order and match them to purchases: 1. On the same day 2. In the 30 days following 3. In the balance of shares bought previously.

    For example, the 4,558 shares sold on 21/4/09 will be matched with 4,316 bought on 22/4/09 and 242 of the shares bought on 27/4/09. Which gives a cost of £8,999.75 + (£8,999.49 x 242 / 3,677) = £9,592, and therefore a loss of £415.

    You might then want to update your spreadsheet to eliminate the shares which have already been matched up.

    If you have a lot of shareholdings like this and/or you can't get your head around it you may be better off seeking professional advice.
    I am an Accountant. You should note that this site doesn't check my status as an Accountant.
    All posts on here are for information and discussion purposes only and should not be seen as professional advice.
  • mark306mark306 Forumite
    49 Posts
    Part of the Furniture Combo Breaker
    Thanks I've spoken to the inland revenue helpline and they're trying to help.

    Thanks
    Mark
  • CLAPTONCLAPTON Forumite
    41.9K Posts
    10,000 Posts Combo Breaker
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    google

    cgt calculators
  • mark306mark306 Forumite
    49 Posts
    Part of the Furniture Combo Breaker
    Google was first thing i tried, but thanks. All sorted now.
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