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Bed and breakfasting and 30 days rule on a bear market


Is this how it works?

I bought 1000 shares at 10 GBP each 3 years ago, for a total of 10000 GBP and now, this year the market is expected to drop, after it had risen to 20 GBP each.

However I manage to sell them at full price before the market crashed and got back the 20k this year. As per the rules, that would quality as 10k gains.

However, the market the next day drops and the share is now 5 GBP each, so I go in and buy 4000 shares for 20000 total.

Have I made the 10k gains for CGT? I think that my section 104 pool should be 4000×5 (20000/4000), so no, if you’re fast in a bear market (and believe the share will rise in the future) you can effectively “double up” protecting youself from losses, without being afraid of capital gains.

i.e. You have a window of 30 days, to buy back in and get more shares if their price drops, without exposing youself to gains and CGT.

Am I right? Can you please confirm?

Thank you all for your help!



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