Capital Gains Tax - using up the annual allowance

D_Dickenson

Rumours are abound that CGT may raise to 50% soon. I believe currently there is approximately a £10,000 annual allowance before the CGT kicks in.

My question is: is there a way to use up this allowance year by year on an asset that has risen in value by selling it and instantly rebuying it at the current price.

eg say you have bought £20,000 of shares that have doubled in value. Could you sell half then instantly rebuy and use the allowance up for this year then next year sell the other half and rebuy and use up that years allowance and then be in a position where no tax is due on a future sale?

John_Pierpoint

To establish the gain you have to sell the asset.
HOWEVER it has not been allowed to "bed and breakfast" your investment for many years. [I can remember the days before Capital Gains Tax:eek:] .
I suppose that if you can 100% trust family members, they could buy back your investment.
You can "bed & ISA" but that probably won't be enough if you want to reinvest all your sale proceeds ("but nobody has ever made a loss by taking a profit").
http://www.iii.co.uk/isas/?type=bed-and-isa

If you want to see an example of how the Financial Services industry and HMRC can take a simple idea and wrap it in red tape, have a read of this:
http://www.hmrc.gov.uk/isa/bulletin15.htm

More explanation here (though you may need to register and poke about to avoid paying).
http://www.ftadviser.com/FinancialAdviser/Regulation/TaxationAndTrusts/CGT/Features/article/20100311/9b24de32-09c2-11df-a993-00144f2af8e8/Tax-Planning-Special-CGT.jsp

RayWolfe

John_Pierpoint wrote: »

("but nobody has ever made a loss by taking a profit")

A point so many people seem to forget!