Is this classed as bed & breakfasting

CreditCardChris

6 months ago I bought a stock but it's currently in a normal investing account and not a S&S ISA as I already used up my £20k limit. Come the start of the next tax year I want to sell the shares and move the money to the ISA and rebuy the shares so they're now in the tax wrapper. however I've read something online I don't quite understand called bed and breakfasting and it kinda sounds like what I want to do would fall into this category? 

The profit generated from this stock is not more than £12,300 so I would not pay GCT on the sale anyway so can is it legal for me to sell and then rebuy them from my ISA account on the same day? It's not the end of the world if I have to wait 30 days before rebuying them but I'd prefer not to have to wait if I don't have to.

Thanks.

HappyHarry

Yes, this is bed and breakfasting using an ISA, and is a perfectly normal and legal thing to do. There is no need to wait 30 days.

However, you are confusing yourself with some CGT rules that state shares bought within 30 days of an identical sale are matched to the shares sold, in order to stop the individual rinsing out a CGT liability. As you are purchasing the shares back within an ISA, this rule is irrelevant to you. 

Linton

Moving an investment into an ISA is not bed& breakfasting.

What the term means is that long ago if you were investing outside an ISA or pension it was worthwhile from time to time to sell your investments and buy them back immediately so that any capital gains could be offset against your CGT allowance.  The tax advantages of doing this were stopped in 1998 by HMRC ignoring buys/sales of the same investment spaced by less than 30 days.  But there is stiill nothing stopping someone selling one investment and buying something extremely similar.

However you arent' doing it anyway.

lozzy1965

As others have said, it is known as Bed & ISA, which is a term derived from a long standing practice, Bed and Breakfast - meaning:  Sell at the end of one day and buy at the beginning of the next day to realise a Capital Gain in a tax year.  My favourite phrase to legally achieve the same outcome is to Bed & Wife, where one sells holdings from ones own portfolio and rebuys in the partners portfolio - and vice versa.  We've been married so long that my wife is not so keen on this option now