regarding the term bed and breakfasting, which is.....
“Selling shares which stand at a gain and reacquiring the shares shortly afterwards, in order to crystallise a gain against which the investor can offset other allowable losses he/she may have in the same tax year, and/or to use the €1,270 annual CGT exemption.
Crystallising the gain also has the benefit of establishing a higher base cost for CGT purposes for future disposal of the shares. This practice usually occurs over the end of the tax year.
• Selling shares which stand at a loss and reacquiring the shares shortly afterwards, with the purpose of realising a loss which can be offset against other chargeable gains arising in the same tax year.
This practice, which is technically complicated, and not widely favoured by stockbrokers, is also carried over the end of the tax year. A minimum 30-day period must elapse between the sale of the shares and their reacquisition if the loss is to be allowable in the tax year of sale of the shares.
So as I understand it.....selling shares with a profit and then re-buying immediately afterwards is acceptable to offset losses from the current year.
BUT selling shares at a loss you must wait 30 days before you can re-buy to make use of the loss that tax year.
In theory this if I understand it correctly is a great way of reducing your CGT liability?
“Selling shares which stand at a gain and reacquiring the shares shortly afterwards, in order to crystallise a gain against which the investor can offset other allowable losses he/she may have in the same tax year, and/or to use the €1,270 annual CGT exemption.
Crystallising the gain also has the benefit of establishing a higher base cost for CGT purposes for future disposal of the shares. This practice usually occurs over the end of the tax year.
• Selling shares which stand at a loss and reacquiring the shares shortly afterwards, with the purpose of realising a loss which can be offset against other chargeable gains arising in the same tax year.
This practice, which is technically complicated, and not widely favoured by stockbrokers, is also carried over the end of the tax year. A minimum 30-day period must elapse between the sale of the shares and their reacquisition if the loss is to be allowable in the tax year of sale of the shares.
So as I understand it.....selling shares with a profit and then re-buying immediately afterwards is acceptable to offset losses from the current year.
BUT selling shares at a loss you must wait 30 days before you can re-buy to make use of the loss that tax year.
In theory this if I understand it correctly is a great way of reducing your CGT liability?
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