Bed and breakfast before 5 April

If you have shares standing at a gain it is worth while ‘bed and breakfasting’ them before 5 April 2006.

Bed and breakfasting means sell the shares one day and buy them back (at the same price) the next day.

This will crystallise a chargeable gain but as long as you only bed and breakfast within your annual exemption of £8,500 there will be no tax to pay and it reduces the chargeable gain proportionately when you do ultimately sell the shares for good. If you are a higher rate taxpayer, this will save you £3,400 of tax!

HMRC have closed down the original bed and breakfast loophole for any one person to buy and sell but it still works if, say, you sell and your wife buys.