With the end of the tax year coming up, if you have any of your capital gains allowance left it may be wise to consider using it up. Below I will explain a way in which this can be done efficiently, without having to suffer from the thirty day 'Bed and Breakfast' rules. To do this you need to have an ISA, and for this example I am going to assume you have used none of it, and therefore have access to the full £10,100. If a person has - let’s say - £6,000 of their £10,100 capital gains allowance left, and they hold a stock, lets say ABC Corp, where they purchased 10,100 shares at a price of 50p that now is worth 100p a share, giving it a current market value of £10,100 - meaning that they have a £5,000 gain.
What a person could do to use up both their capital gains allowance and their ISA allowance is to sell their entire holding of ABC corp on the last day of trading and at the same time purchase that stock back in their ISA (Just to note, this trade does not have to be done on the last day of trading, in reality it can be done anytime a person wishes within the tax year).
This would result in that person having used up £5,000 of their remaining £6,000 capital gains tax allowance, and their full ISA allowance. Just to note, this can still be done if you have no ISA allowance left, but it is a more risky way of doing it, as it means being out of the stock for a day. As what you do is sell the stock on the last day of trading in the tax year, then buy it back in your ISA on the first day of the new tax year. Also if you have a spouse with an ISA allowance left, you can use their account i.e. sell the stock in your account, then buy it back in your spouse’s ISA, therefore crystallising the gains, and using up your remaining ISA allowance.
With any idea, there is of course weaknesses, with the biggest in this case being due to the fact that it normally takes three trading days for you to be able to withdraw the money from your account after the sale of a stock, then likely another three trading days before it enters your bank account. You will have to have £10,100 in cash spare to do the trade (If you intend to use the full ISA allowance), or more if you have a spouse.
Jus to finish, the concept given here can also be used to crystallise losses, i.e. sell stocks that you wish to keep, but that are at current showing a loss, then buy them straight back in your ISA. Therefore realising the loss and getting the tax benefit from the loss, yet also at the same time not missing out on any movements in the share price.
If anyone has any other tax ideas please feel free to post them below, also if you think you can add to what I have written, or if you feel there are errors in anything I have written, again please feel free to post this below.