Should I sell and re-purchase profiting shares before the end of the tax year?

sgog

I have an investment account with multiple assets. Some of them profited and some lost since I bought them.

I am happy with my current portfolio and wish to keep it as is.

However, I was wondering if it makes sense to sell some of the profiting shares, and buy them again immediately, before the tax year ends to make sure I don't lose this year's CGT allowance.

This seems to be unnecessary (I have to pay for the trades and this serves no purpose but to use the allowance.
Is there any other way to reach the same outcome?

MDMD

You have to wait 30 days before you re-purchase the same shares, otherwise the disposal is ignored and you are treated as having not sold them.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13370

talexuser

Buying back immediately achieves nothing (apart from pointless cost) because the purchase price calculation will not change. You have to wait 30 days before buying back the same shares to reset the purchase price and then use up any capital gain allowance. You could of course buy something else, which I do to rebalance as two birds with one stone.

Personally I sell and buy the allowance every year to reset purchase price in order to minimise capital gains tax in the future if selling beyond the allowance, but it depends on your circumstances. The costs for me are minimal even with stamp duty compared to the potential tax on gains building up.

The reduction of allowance to 6k and 3k will be a significant stealth tax, easily as bad as the freezing of personal allowances.

sgog

talexuser said:

Buying back immediately achieves nothing (apart from pointless cost) because the purchase price calculation will not change. You have to wait 30 days before buying back the same shares to reset the purchase price and then use up any capital gain allowance. You could of course buy something else, which I do to rebalance as two birds with one stone.

Personally I sell and buy the allowance every year to reset purchase price in order to minimise capital gains tax in the future if selling beyond the allowance, but it depends on your circumstances. The costs for me are minimal even with stamp duty compared to the potential tax on gains building up.

The reduction of allowance to 6k and 3k will be a significant stealth tax, easily as bad as the freezing of personal allowances.

Does this mean that I can exchange one S&P ETF with another immediately to use the allowance?

In any case, this seems unfortunate that the government is encouraging such actions instead of allowing a "conceptual" selling of assets.

talexuser

Yes if it is a different ETF, eg sell a Vanguard and buy an iShares. 

phillw

You can use a CFD to protect against the price change in the 30 days between selling and purchasing. Or if you're married then you can sell them, give the money to your spouse who can buy the shares and then gives the shares to you.