Introduction Guided Tour Customer Services What is CGT?

The 30 Day Rule

This rule was introduced with taper relief to stop long-term investors ‘bed and breakfasting’ shares each year, thereby avoiding the cumulative CGT liability. Now, if you buy into the same share within 30 days of making a sale, the sale must be matched against the buy afterwards, rather than the buy beforehand. For example:

10 Oct 1998	Buy 1000 share A @ 100p	Total £1000
17 Feb 1999	Sell 1000 share A @ 150p	Total £1,500

In this case the sale 17 Feb is matched against the buy 10 Oct giving a gain of £500

10 Oct 1998	Buy 1000 share A @ 100p	Total £1000
17 Feb 1999	Sell 1000 share A @ 150p	Total £1,500
20 Feb 1999	Buy 1000 share A @ 160p	Total £1,600

Now the sale 17 Feb is matched against the buy 20 Feb giving a loss of £100.What has happened is that instead of selling the shares you bought for £1,000 and retaining the share you bought for £1,600, you are deemed to have sold the shares you bought for £1,600 and retain the shares you bought for £1,000.

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