Brendan Harper, technical services manager at Friends Provident International, looks at the practice of 'bed and breakfasting', and how it can be an ideal way to achieve tax-free capital growth
Prior to 1998, it was common practice for expatriates to sell and repurchase shareholdings before they returned to the UK, but this strategy was stopped by a change in the law. Now, however, it appears that this strategy will work again. 'Bed and breakfasting', as it was known, was a popular strategy for mitigating capital gains tax (CGT) on holdings in shares and mutual funds in the UK. UK residents have an annual CGT exemption that currently stands at £9,200, which means they can realise capital gains up to that level without incurring CGT. So it used to be common practice to sell your s...
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