Bed-and-Breakfasting 30-Day Share Reacquisition Rule
The Formal Definition
An anti-avoidance tax rule under UK Section 106A of the Taxation of Chargeable Gains Act 1992 that prevents investors from 'bed-and-breakfasting'—selling shares to crystallize annual tax-free capital gains allowances or tax losses and repurchasing them the next morning—by matching the sale against any acquisition of the same security made within the subsequent 30 days.
$$\text{Cost Basis Matching Hierarchy: Same Day} \to \text{Next 30 Days (Bed-and-Breakfasting)} \to \text{Section 104 Asset Pool}$$
Cole Barrett's Reality Check
The Unvarnished Bottom Line"UK investors used to sell stock on the last day of the tax year to crystallize their annual capital gains allowance and buy it right back the next morning. HMRC killed that with the 30-day rule: if you repurchase the same stock within 30 days, your new purchase is matched against the sale, completely nullifying your tax reset. If you want to keep your market exposure, you have to buy a matching index ETF or execute a 'Bed-and-ISA' transfer."
Interactive Simulator: Test the Math
Real-World Example: Scenario Breakdown
Examining the real numbers for: A UK investor selling £20,000 of an equity position (£10,000 cost basis; £10,000 gain) on April 4 to utilize their annual capital gains allowance
| Execution Metric | Bed-and-ISA Compliant Investor | Direct Bed-and-Breakfasting Seller |
|---|---|---|
| Fee / Rate | £5.95 flat ticket fee | £9.95 ticket |
| Spread / Buffer | Sold shares in taxable account and immediately repurchased the identical shares inside a tax-free Stocks & Shares ISA | Sold shares on Monday in taxable account; repurchased the identical shares on Tuesday morning in the same account |
| Execution / Status | Repurchases inside an ISA wrapper are explicitly exempt from the 30-day bed-and-breakfasting matching rules | HMRC 30-day matching rule engaged: matched the sale price directly against Tuesday's repurchase price |
| Total Cost / Result | Successfully utilized annual tax allowance via Bed-and-ISA structuring | Capital gains allowance utilization invalidated by 30-day reacquisition rule |
How Brokers Weaponize This Term
If you harvest capital losses or crystallize capital gains allowances in a UK taxable account, do not repurchase the same stock or same ETF ticker within 30 days. To maintain continuous market exposure without violating the 30-day rule, purchase a competing ETF tracking a similar index (e.g., selling Vanguard S&P 500 and buying iShares S&P 500).
Broker Evaluation Matrix
Cole Approves
Interactive Brokers: Provides specialized UK tax reporting packs that track Section 104 pooling and automate 30-day share reacquisition matching schedules.
Read Audit →Cole Flags / Avoids
Discount Neobrokers: Lacks UK Section 104 pool accounting, forcing retail investors to manually reconcile 30-day bed-and-breakfasting matching rules.
View Trap Details →Frequently Asked Questions
What is 'Bed-and-Spouse' trading in the UK?
Bed-and-Spouse is a legal strategy where you sell shares to crystallize a gain or loss in your own account, and your spouse immediately repurchases the shares in their account, bypassing the 30-day matching rule.
Does the 30-day rule apply to capital losses (wash sales)?
Yes. If you sell shares at a loss and repurchase them within 30 days, the loss is matched against the new purchase and cannot be used to offset gains against other assets.