Annual CGT

You can buy them back inside an ISA, if you have enough allowance available between this year and next year. You can switch immediately into another fund from the same or a different stable. The only thing you can't do is buy back the same units within 30 days.

If married she can get her husband to buy them the next day.

There was a similar thread on this newsgroup a short while ago.

Thanks Terry.

Any idea where these rules are laid out please?

Ta.

Have a look at a section 106A TCGA 1992 for the relevant "identification" rules.

Try

for the document, IR2008, either as HTML or PDF. "How many and How much" is the section you want:

Quote:

How much money can I put into ISAs? In each of the tax years 2001/2002 to 2005/2006 you can put in up to £7,000 in total (plus any capital sum from a matured TESSA - see page 22). You can then put in up to £5,000 in each subsequent tax year from 2006/2007. A tax year runs from

6 April to 5 April the following year. Each year the money can be put into either 2001 - 2006 Later years one Maxi ISA total £7,000 total £5,000 of which these amounts can be put into stocks and shares up to £7,000 up to £5,000 cash up to £3,000 up to £1,000 life insurance up to £1,000 up to £1,000 or Mini ISAs for stocks and shares up to £3,000 up to £3,000 cash and up to £3,000 up to £1,000 life insurance up to £1,000 up to £1,000 Remember, you can only put money into either one Maxi ISA or up to three Mini ISAs (one for each type of saving) in each tax year.

Unquote.

The formatting is mucked up, but if you go to the site it will be OK.

Thanks Terry - I appreciate your trouble.

My question however was about cgt for unit trusts, not ISAs, Peps or Tessas which have no exposure to CGT.

K

""Bed and Breakfasting" ("B&B")

The B&B matching rule (Section 106A(5) TCGA) takes second priority after the same day rule, but before other matching rules. It matches disposals with acquisitions of securities of the same class "within the period of 30 days after the disposal". If there is more than one acquisition in this period you take the earliest acquisitions first."

But what it doesn't define is what it means by "the same class". So it doesn't define whether selling FTSE 350 Unit trusts one day and repurchasing FTSE 250 unit trusts the same day is clearly within or outside the definition of "same class".

Any ideas where this may be clarified please?

K

............ I think I may have found it in IR284.

- Umbrella Schemes

A unit trust may take the form of an 'umbrella scheme' authorised

by the Financial Services Authority. These schemes have separate

sub-funds which are treated as separate authorised unit trusts for

capital gains tax purposes. A switch from units in one sub-fund

to units in another will normally be a disposal of the old units,

on which a capital gain or loss will arise. But if the switch occurs

as part of a merger of sub-funds, the rules described in

Help Sheet IR285 may apply. If so, you are not treated as disposing

of your old units at the time of the merger.

"identification"

A FTSE 350 unit trust is not the same class as a FTSE 250 unit trust.

A FTSE 350 Unit trust from one company is a different class from the FTSE

350 of another company.

You can sell one unit trust and immediately buy another similar one from a different provider. In the case of tracker funds they should be very similar indeed.

Robert

Sorry, must have been a rush of blood to the head.

Thanks to Doug, Terry and Robert for all the help.

K

Sorry, must have been a rush of blood to the head.

In general it means that the shares/units are really indistinguishable ("fungible"). Two different FTSE100 trackers, for example, would not be the same.

Are you doing this purely for tax purposes? If so, watch out that the costs aren't bigger than the benefit - bearing in mind that in a sense CGT is always a voluntary tax, you may never pay it so any tax savings might be illusory. OTOH if you have enough to worry about CGT it may be worth moving money into ISAs (bed-and-ISA). You may well get a discount if you stick to the same management company (or use a discount broker).

You can do it, you just have to be aware of the tax consequences (and the costs).

Assuming you mean the 30-day rule, you have to avoid buying the same shares/units back within 30 days, whether in a different tax year or not. Bed-and-ISA doesn't count because ISAs are outside the CGT net.

The Inland Revenue web site has a number of CGT help sheets, and indeed also has the full tax manual, but CGT is complex so there isn't really a simple guide!

Thanks Stephen,

I'm doing it purely for tax purposes. Two units - one in my name - one in partners name. As far as I'm aware L&G FTSE all share units have no entry or exit costs only a small annual charge. Each have realisable gains of around 7k. Full ISA allowance already used but only now being put into cash as the ISA advantage for unit trusts /shares seems to be negligable - particularly when comparing them with low management cost unit trusts and realising sub-cgt gains as they occur.

I can only see advantage in this situation in capitalising/realising the gains each time a CGT max amount is reached.

K

There's probably still some spread between buying and selling prices, although it may be small.

The big advantage of ISAs now is in effect the freedom from CGT, if you have enough to worry about CGT that would seem to be an advantage! Unit trust ISAs rarely cost any more than holding the UT on its own, so if you are switching anyway you may as well use up your equity ISA allowance. At the very least it will save you the hassle of doing the bed-and-breakfast in future.

The bid and offer prices are identical. 91.76p at the moment.