30 day rule for B+B exactly 30x24 hours?

twinbee

I'd like to know if the 30-day bed and breakfast rule actually means 30x24 hours exactly, or if it just means 30 days, no matter what time of day it is.

So I sold my shares on the 31/03/2015 at about 6pm. So can I buy back tomorrow on 30/04/2015 9am? Or would it have to be later than 6pm instead?

bowlhead99

HMRC don't provide an example. I would suggest time of day of the trade is irrelevant. HMRC do not care what time of day you strike a bargain, imho.

If you sell shares on 31 Mar and buy back on 1 April, HMRC will say you bought back the next day: "within one day following the date of disposal", as opposed to buying back on 31 Mar which would have been "acquiring shares on the same day as the disposal". A day elapsed between you settling trade 1 and 2, assuming standard market settlement.

If you instead bought back on 2 April, they will say you bought back "and acquired shares within 2 days of disposal". Place a trade which is accepted by a seller on 30 April, you bought back within 30 days and are caught.

In working inside HMRC rules, dates rather than hours in the day are what counts. Vat dates on invoices drive your quarterly VAT returns. Fiscal years are what drive an annual tax comp. They don't care if December 31 has a "leap second" every so often to equalize our years with the movement of the earth around the sun, because they define rules by reference to number of days in a period or number of full tax years in a period and not the hours or seconds.

Effectively whether you deal at 2pm or 6pm or 7pm it doesn't change that you agreed the trade that day and need to settle the trade on the Xth day thereafter. When it comes to paying for assets or getting paid proceeds or receiving dividends or whatever: you either get the money cleared into your account that day, and start earning or losing interest on your bank account overnight, or you don't. It's binary. If you owe them a tax bill to be paid within X days, they'll accept you have paid it if you do it before that day ticks over to the next one. They are not counting seconds since they sent you a demand, they are turning pages on a daily calendar.

At least, if they are counting minutes and seconds, it wasn't on the tax exams I took, back in the day.

Ifts

twinbee wrote: »

So I sold my shares on the 31/03/2015 at about 6pm. So can I buy back tomorrow on 30/04/2015 9am? Or would it have to be later than 6pm instead?

Don't think that will work if you buy back on 30/04/2015 as its the 30th day. Allowing for the 30 day rule you will have to buy back after 30/04/15.

twinbee

So you both agree I can only buy back on the 1st of May as the earliest?

bowlhead99

If you'd prefer to be put in the position where you have to explain to HMRC why, after selling shares on 31 March, you bought back shares on 1 April (1 day later) or 2 April (2 days later) or 3 April (3 days later) or 4 April (4 days later) or 30 April (30 days later) but somehow any of those dates do NOT qualify as 'buying back within 30 days', then feel free to go ahead and rebuy your shares during April.

twinbee

Sorry can you rephrase that, it's a bit of a mouthful. Are you saying even if I buy back on May 1st, I'd have to explain to HMRC why I only waited a single day after the limit?

In other words, am I safe buying back tomorrow?

bowlhead99

If you buy back in May, it is not within 30 days of the last day of March.

If you buy back in April, you would be buying back within 30 days of the last day of March, which is what you would like to avoid.

It can't be explained any easier than that. Get a calendar and count the days if you are unclear, which is what HMRC would do.

If you would like to buy back in April, and risk a confrontation with HMRC some years later when they tell you that buying back in April is within 30 days of your trade on the last day of March, and you claim otherwise, with £££ at stake, then you could go ahead and buy back today.

If you buy back shares in May which you sold in March, then no such confrontation could occur.

Ifts

twinbee wrote: »

So you both agree I can only buy back on the 1st of May as the earliest?

Yes that is the earliest you can buy back.

edit: twinbee - see post #10 by Ark Welder as it really depends on the date the trade was executed.

twinbee

Thanks to you both - the situation's been clarified. Appreciated.

bowlhead99: Sorry for my misunderstanding - in my stupidity, I somehow interpreted your other comment where you said: "you bought back shares on 1 April (1 day later) or 2 April...... etc.", as being those dates but for May instead. So that made the meaning of the whole post go haywire in my mind Thanks for your patience.

Ark_Welder

twinbee wrote: »

So I sold my shares on the 31/03/2015 at about 6pm.

Did you? Or was the sell order placed on that date but they were actually sold the next day, i.e. 01/04/2015?

If the shares were listed on a UK or european exchange then the markets would have been closed at 6pm, so an order would not have been executed until the following day when markets had re-opened. In which case, your thirty days finishes a day later than expected.

Different story if you're talking about US markets which would have been open at 18:00 BST, so the trade would (should) have been executed on the 31st.