Gerry MacCrossan
With potential changes to Capital Gains Tax (CGT) looming, some investors may be looking to sell investments before 30 October 2024 to lock in gains at current rates. They might then plan to repurchase the same investments after the tax change to maintain their portfolio balance. However, if the same shares or securities are repurchased within 30 days of the sale, the new purchase is matched with the original sale, and any intended capital gain or increase in base cost could be cancelled out.
For example, if you bought 1,000 shares in A plc for £2 per share a few years ago and sell them on 29 October 2024 for £4.50 each, you would have a £2,500 gain. This might be tax-free if you haven’t used your £3,000 CGT annual exemption for 2024/25. However, if you repurchase the same shares on 5 November 2024 at £4.45 per share, instead of realising that gain, you could end up with a £50 loss and your base cost would remain at £2 per share due to the 30-day rule.
To avoid this, you could consider having your spouse repurchase the shares (known as “bed and spousing”) or buying them through your ISA or pension fund instead.