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bigduckontax
bigduckontax, Accountant
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I think I have stupidly fallen foul of the bed and breakfast

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I think I have stupidly fallen foul of the bed and breakfast rule and have learned a lesson.
On12/5/15 bought 1667 @ 354.2 - 14/5/15 bought 1079 @ 356.06 I sold all bar 12 of these on 6/7/16 @ 153.92 = 4166.
On 12/7/16 I re - bought 1095 @184.33 = 2048.65 but decided to sell these and the remaining 12 shares from the original transaction i.e 1107 for 2124.98 on 27/7/16. Leaving me with a holding zero . Not expecting any but hopefully you will have a at least some consoling news.
I plan to sell a second property which will incur CGT above the annual allowance.
I appreciate that I may need help filling in a future tax return but at this stage I just want o find out an approximation any allowable gain and if I have on will be able to offset this.
Here's hoping I have not squandered it.
Kind regards
Stuart Vickers
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello Stuart, I am Keith, one of the experts on Just Answer and pleased to be able to help you with your question.

The bed and breakfast rules preclude a repurchase within a 30 day envelope. You sold 1067 on 6 July and bought back on 12 July. This, as you realise, falls foul of the rule. The bought back shares will be deemed, for CGT purposes, to have been acquired at the 354.2/356.06 not the 2048.65 actually paid. At this stage you may have a CGT liability in the 16/17 tax year. This is taxed at 10% or 20% or a combination of the two rates depending on your income including the gain in the tax year of sale. Any residential property you sell will be taxed at 18% or 28%, ditto.

You have an Annual Exempt Amount (AEA) of 11.1K to offset any gain. The AEA is non cumulative. At this stage I cannot calculate your CGT exposure as you say you bought at 354.2/356.06 and sold at 2124.98. Please verify exactly what you mean by these figures; are they expressed in pounds or pence or what? Sorry to be so pedantic, but it is important. It would be helpful if you set out by date the number of shares bought or sold and the total amount paid or received at each transaction.

Customer: replied 1 year ago.
Sorry for not being clearer. On 12/5/15 I bought 1667 shares @ 354.42 pence (this is the price quoted by the Share Centre) the total price paid for these was £5996.80 - On 14/5/15 bought 1079 shares @ 356.06 pence the total price paid for these was £3899.52On the 6/7/16 I sold 2734 of the 2746 of the above @ 153.92 pence = £4166.06
On 12/7/16 I re - bought 1095 @184.33 pence = £2048.65On the 27/7/16 I decided to sell the 1107 remaining shares @ 192.64 pence per share = £2124.98.Sorry to be unclear before - hopefully this is a better attempt.
Expert:  bigduckontax replied 1 year ago.

Thank you for the clarification.

Your total purchase cost was say 9900 which under the B&B rules stands. You sold 2734 (1667 bought for 5997 and 1067 bought for 3692 total 9689) for 4166K making a capital loss of say 5523. As the B&B rules apply the repurchase price is an irrelevance. The final sale reduces the capital loss to 5523 - 2125 = 3398. This loss can either be used to offset gains in the year carried forward to future years ditto. This is available to set against any gain on the second property if firstly you decide to sell and secondly make a gain.

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Expert:  bigduckontax replied 1 year ago.

Thank you for your support.