"He's just the Bed and Breakfast man"

First Time Investing šŸ£
#1

OK enough of the Madnessā€¦ :wink:

Just discovered that it seems I cannot sell and buy back shares within a 30 day time period which is bad news for me as I had aimed at doing just that to take advantage of dips.

  1. Is this the case, will Freetrade stop me from buying back the same stock within 30 days of selling it?

How do day traders operate then? Do they have to wait 30 days before they can buy into something they recently sold? Doesnā€™t sound right to me but ā€˜I Know Nothingā€™ (yes, I know you just read that in the voice of Andrew Sachs)

I did find this on an accounting website as a way around this:

What are my alternatives?
Should you wish to buy back the shares within 30 days of disposal, you may use an ISA or self-invested personal pension (SIPP) to make the payment. With an ISA, the only limitation is the size of your annual allowance so this method is not one that can be used multiple times throughout the year.

Alternatively, the transfer of chargeable assets between spouses and civil partners can help reduce overall payable CGT. Married couples and civil partners can crystalize a gain by having one partner sell the asset, before the other buys it back (using a different broker). This keeps the investment within the family.

  1. So is it the case that in a ISA I could buy back shares within 30 days? I have a GIA not an ISA. Is trading through an ISA not the same as a GIA in so far as you have a fund value and you allocate blocks of it to shares as you buy them? I donā€™t understand why you could not do this method ā€˜multiple times per yearā€™ because of your anual allowance.

  2. Itā€™s true I could set up another account in my wifeā€™s name, err I mean she could set up an account, and she could buy them back when they dropped. But still that would only mean being able to do that once per month as Iā€™d still need to wait the 30 days from when I sold my shares initially to be able to buy them back.

Thanks
K

#2

You can buy and sell as much as you want, but you have to track the transactions and calculate the correct CGT on all of them accurately.

There are three rules. The same day rule, 30 day rule, and section 104 holding rule.

Itā€™s all to do with tax and if you donā€™t understand the rules Iā€™d probably suggest not frequently trading in a GIA

This page has a reasonable description CGT - Share Matching Rules - The Motley Fool UK

And this page also gives some examples and information on the rules HS284 Shares and Capital Gains Tax (2018) - GOV.UK

Thereā€™s an entire manual on capital gains tax you may need to read if your heading into that territory.

8 Likes
#3

Are you a Freetrade employee, mate? Just curious. You always know everything in details.

#4

Nah Iā€™m just reviewing some cctv so was on here while that scrolls through :grinning_face_with_smiling_eyes:

I learned enough that about those rules while learning about investing to get buy but thatā€™s about it.

7 Likes
#5

So youā€™re a great member to have around :grinning:

3 Likes
#6

Cheers Eden, will look at those links now.

#7

W O W ! Not a clue what that all means.

Iā€™m sure I could work it all out given some real world figures. If I can work Capital Allowances and Balancing Charges when buying and selling a cars for the business then I guess Iā€™ll be able to do this. Easy option seems to be an ISA though, I have to say.

I see Freetrade have a Plus Account that gives you 3% interest on unused cash in the account (upto Ā£4000). Basically wouldnā€™t that more or less cancel out the Ā£9.99 per month fee they charge for the Plus Account? Ā£4000 x3% =Ā£120, the same as Ā£9.99 x 12 months = Ā£119.88. I could fund the account with Ā£10k to play with and an extra Ā£4k just to sit in the account earning the interest, couldnā€™t I?

Or anyone else to recommend for a S&S ISA? The one thing I have noticed with FT is that there are lots of stocks missing from their available list.

1 Like
#8

That is the point. You get free Plus if you put in 4K in cash

2 Likes
#9

Sorry @szb I donā€™t understand what you want to say

#10

You are absolutely on the point here. You could totally do this.

3 Likes
#11

With regard to FT missing stocks;

With FT being new they dont have all stocks available.
They are being added regularly so eventually weā€™ll see a complete market.
If there are any youd like pushed to the front of the queue there is a request section of the forums too

#12

Hi all,

This has been a good read as Iā€™m also curious about the bed and breakfast rule.

Does anyone know if the B&B rules have any implications if you are under CGT allowance for the year have and have sold and bought stocks back within 30 days?

Iā€™ve read that if you do buy within 30 days then your losses basically donā€™t count, but is that if you intend to claim it as a loss to offset your gains?

Iā€™m pretty sure with a wash sale it also doesnā€™t count it you sold the shares at a profit, so presumably in the UK you can also buy back in in that case? If anyone has any clarity on these it would be much appreciated.