CGT bed & breakfasting, calculations

mark306

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.

Regards
Mark

CLAPTON

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

mark306

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:


(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

mrkbrrws

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.

mark306

Thanks I've spoken to the inland revenue helpline and they're trying to help.

Thanks
Mark

CLAPTON

google

cgt calculators

mark306

Google was first thing i tried, but thanks. All sorted now.