Spread betting to avoid CGT

Jeremy535897

That is what I would want to investigate thoroughly.

DoctorStrange

Agreed, I'm glad it's not just me though that finds the examples vague and inconsistent.

Thanks again for your input,  and I'll post the closing trades / total P&L tomorrow and we'll see what's what...

pjcox2005

DoctorStrange said:

pjcox2005 said:

Just to check, although I expect you've thought of it, but for gains outside your ISA you still have your personal capital gains allowance of £12,300. If married that's two sets as well taking it to £24,600.
It may be that your investments are significantly high that it's already taken into account. In which case ISAs full and gains of £24.6k a year probably means you can cope if an issue arose on spread betting. Personally though I'd use my allowance and just making sure I'm utilising each year by selling assets held at a gain and reinvesting.

I'm not married and not making substantial gains unfortunately - but I could 😂

When you sell / reinvest,  isn't there a 30 day blackout period or something?

I'm only considering the spread betting as it seems less hassle (once I'm comfortable the returns on both at exactly the same, that it!)

Yes, there is a 30 day rule which termed "bed and breakfasting" where for tax purposes you can't immediately reinvest in the same share or fund that you've just sold out of, so you'd have to think about whether you expect a sudden surge in growth in the next 30 days. You can buy that asset back after 30 days though - so buy at £10k, sell at £22.3k all tax exempt, wait 30 days and buy back at £22.3k (assuming no movement in share price) and then if you disposed of those shares again for £22.3k then no tax liability or sell again the following year to use personal allowance.

You can though immediately buy any other company's shares or a different class (often very similar e.g. different provider) of fund within 30 days without changing the capital gains treatment. I expect understanding these rules may be better than going the spread betting route but i admit that's because I've never looked into spread betting for investments.

DoctorStrange

For me (so far anyway) the biggest danger with spread betting is the leverage and getting carried away with shorts etc. 

I like the speed of execution / immediate settlement, but they're minor in the grand scheme of things. If the divs are the same,  I can't think of any issues with buying and holding with no leverage but I'll keep digging.

Keep_pedalling

pjcox2005 said:

DoctorStrange said:

pjcox2005 said:

Just to check, although I expect you've thought of it, but for gains outside your ISA you still have your personal capital gains allowance of £12,300. If married that's two sets as well taking it to £24,600.
It may be that your investments are significantly high that it's already taken into account. In which case ISAs full and gains of £24.6k a year probably means you can cope if an issue arose on spread betting. Personally though I'd use my allowance and just making sure I'm utilising each year by selling assets held at a gain and reinvesting.

I'm not married and not making substantial gains unfortunately - but I could 😂

When you sell / reinvest,  isn't there a 30 day blackout period or something?

I'm only considering the spread betting as it seems less hassle (once I'm comfortable the returns on both at exactly the same, that it!)

Yes, there is a 30 day rule which termed "bed and breakfasting" where for tax purposes you can't immediately reinvest in the same share or fund that you've just sold out of, so you'd have to think about whether you expect a sudden surge in growth in the next 30 days. You can buy that asset back after 30 days though - so buy at £10k, sell at £22.3k all tax exempt, wait 30 days and buy back at £22.3k (assuming no movement in share price) and then if you disposed of those shares again for £22.3k then no tax liability or sell again the following year to use personal allowance.

You can though immediately buy any other company's shares or a different class (often very similar e.g. different provider) of fund within 30 days without changing the capital gains treatment. I expect understanding these rules may be better than going the spread betting route but i admit that's because I've never looked into spread betting for investments.

You can at least immediately buy £20k of it back in an ISA. 

As the OP is currently not making the sort of gains that exceed his annual allowance I cant understand why he would even consider this. It is not difficult to liquidate most gains and avoid CGT unless you are making significant gains above your allowances. Between us over  last 10 years me and my wife have managed to release in the region of £200k of gain in our general investment accounts without paying a penny of tax on it. Those accounts will be closed this coming financial year as the remnants will be hitting our ISAs in April. 

DoctorStrange

Keep_pedalling said:

pjcox2005 said:

DoctorStrange said:

pjcox2005 said:

Just to check, although I expect you've thought of it, but for gains outside your ISA you still have your personal capital gains allowance of £12,300. If married that's two sets as well taking it to £24,600.
It may be that your investments are significantly high that it's already taken into account. In which case ISAs full and gains of £24.6k a year probably means you can cope if an issue arose on spread betting. Personally though I'd use my allowance and just making sure I'm utilising each year by selling assets held at a gain and reinvesting.

I'm not married and not making substantial gains unfortunately - but I could 😂

When you sell / reinvest,  isn't there a 30 day blackout period or something?

I'm only considering the spread betting as it seems less hassle (once I'm comfortable the returns on both at exactly the same, that it!)

Yes, there is a 30 day rule which termed "bed and breakfasting" where for tax purposes you can't immediately reinvest in the same share or fund that you've just sold out of, so you'd have to think about whether you expect a sudden surge in growth in the next 30 days. You can buy that asset back after 30 days though - so buy at £10k, sell at £22.3k all tax exempt, wait 30 days and buy back at £22.3k (assuming no movement in share price) and then if you disposed of those shares again for £22.3k then no tax liability or sell again the following year to use personal allowance.

You can though immediately buy any other company's shares or a different class (often very similar e.g. different provider) of fund within 30 days without changing the capital gains treatment. I expect understanding these rules may be better than going the spread betting route but i admit that's because I've never looked into spread betting for investments.

You can at least immediately buy £20k of it back in an ISA. 

As the OP is currently not making the sort of gains that exceed his annual allowance I cant understand why he would even consider this. It is not difficult to liquidate most gains and avoid CGT unless you are making significant gains above your allowances. Between us over  last 10 years me and my wife have managed to release in the region of £200k of gain in our general investment accounts without paying a penny of tax on it. Those accounts will be closed this coming financial year as the remnants will be hitting our ISAs in April. 

Is selling unwrapped investments and buying back in the ISA subject to the same 30 day rule?

Keep_pedalling

DoctorStrange said:

Keep_pedalling said:

pjcox2005 said:

DoctorStrange said:

pjcox2005 said:

Just to check, although I expect you've thought of it, but for gains outside your ISA you still have your personal capital gains allowance of £12,300. If married that's two sets as well taking it to £24,600.
It may be that your investments are significantly high that it's already taken into account. In which case ISAs full and gains of £24.6k a year probably means you can cope if an issue arose on spread betting. Personally though I'd use my allowance and just making sure I'm utilising each year by selling assets held at a gain and reinvesting.

I'm not married and not making substantial gains unfortunately - but I could 😂

When you sell / reinvest,  isn't there a 30 day blackout period or something?

I'm only considering the spread betting as it seems less hassle (once I'm comfortable the returns on both at exactly the same, that it!)

Yes, there is a 30 day rule which termed "bed and breakfasting" where for tax purposes you can't immediately reinvest in the same share or fund that you've just sold out of, so you'd have to think about whether you expect a sudden surge in growth in the next 30 days. You can buy that asset back after 30 days though - so buy at £10k, sell at £22.3k all tax exempt, wait 30 days and buy back at £22.3k (assuming no movement in share price) and then if you disposed of those shares again for £22.3k then no tax liability or sell again the following year to use personal allowance.

You can though immediately buy any other company's shares or a different class (often very similar e.g. different provider) of fund within 30 days without changing the capital gains treatment. I expect understanding these rules may be better than going the spread betting route but i admit that's because I've never looked into spread betting for investments.

You can at least immediately buy £20k of it back in an ISA. 

As the OP is currently not making the sort of gains that exceed his annual allowance I cant understand why he would even consider this. It is not difficult to liquidate most gains and avoid CGT unless you are making significant gains above your allowances. Between us over  last 10 years me and my wife have managed to release in the region of £200k of gain in our general investment accounts without paying a penny of tax on it. Those accounts will be closed this coming financial year as the remnants will be hitting our ISAs in April. 

Is selling unwrapped investments and buying back in the ISA subject to the same 30 day rule?

No, if for instance you sell £50k of shares with a capital gain of £12,000, you can put £20k into the same shares within your ISA on the same day. This leaves you with £30k that are subject to the 30 day rule, but that does not stop you reinvesting in alternate investments. If the assets are funds rather than individual shares it is pretty easy to buy a different fund with similar mix of assets so really no need to be out of the market for a month.