The 30 Day Rule

HarperBoy

I am quite banjaxed by my inability to understand what everyone else appears to find quite simple.  Please be patient  . . . 

I have £10K worth of a specific share in a trading account that I want to shelter in my ISA account, for the usual reasons.   What I want to do is sell the total £10K holding of the share in my trading account - accepting that it will attract a CGT commitment - then put the proceeds into my ISA account and immediately buy the same share in the ISA account.  (I realise that transaction costs mean I won't get quite as many shares as I sold, but that's acceptable to me). 

Here's my problem.  I know that there is such a thing as a '30 Day Rule' but don't have a clear understanding of it.  I believe/hope that it does not apply to what I have in mind.  From what I can gather I think it is designed for more complex scenarios where, for example, I sell only a fraction of my original holding, but it's quite possible I have the wrong end of the stick.   My broker is happy to do what I want but refuses to tell me if the 30 Day Rule applies. - "not our area of expertise".

Can anyone help with a simple answer - if I do sell my total holding (and acknowledge a Capital Gain), can I then buy the same share within my ISA account on the same day without any further tax-relevant complications?

coastline

Why not sell some in this tax year and the rest after April 5th . Avoid CGTax ?

Capital Gains Tax 30 Day Rule / Bed and Breakfast - Investment Guide

eskbanker

HarperBoy said:

Can anyone help with a simple answer - if I do sell my total holding (and acknowledge a Capital Gain), can I then buy the same share within my ISA account on the same day without any further tax-relevant complications?

Yes - selling from a GIA and buying back within an ISA (often referred to as Bed & ISA) doesn't trigger the 30 day rule, as that only affects repurchases outside the ISA wrapper.

coastline said:

Why not sell some in this tax year and the rest after April 5th . Avoid CGTax ?

Capital Gains Tax 30 Day Rule / Bed and Breakfast - Investment Guide

OP is only selling £10K worth, so, assuming no other CGT-relevant transactions, will have gains well below the annual threshold....

HarperBoy

Thank you eskbanker for your prompt and helpful response.  That's what I had hoped to hear.  I don't understand why all the brokers and other sources I've consulted don't state it as clearly as you have done, unless it is just that they can't imagine that anyone could be so dim as to need to ask.  But I would have thought people trying to persuade you to transfer investments into their ISA account would want to emphasise this positive feature!

ColdIron

HarperBoy said:

can I then buy the same share within my ISA account on the same day without any further tax-relevant complications?

You may have to wait a few days for the trade to settle before transferring it to your ISA. You could pre fund this if you have a spare £10,000 elsewhere and replace it with the sale proceeds

jimjames

HarperBoy said:

Thank you eskbanker for your prompt and helpful response.  That's what I had hoped to hear.  I don't understand why all the brokers and other sources I've consulted don't state it as clearly as you have done, unless it is just that they can't imagine that anyone could be so dim as to need to ask.  But I would have thought people trying to persuade you to transfer investments into their ISA account would want to emphasise this positive feature!

Essentially you cannot transfer investments into an ISA. You can only put cash into an ISA (with an exception for sharesave schemes in certain situations) and it's then up to you what you do with it - whether to rebuy something you held elsewhere or not but as you say it's a definite advantage of an ISA that everything inside is tax free.