Bed and ISA
Another way to avoid being out of the market for 30 days is to sell funds and buy them back in an Isa. Shares held within an ISA are generally free of both income tax and CGT.
Bed and spouse
This is where the shares are sold by an individual and bought back in the name of their spouse or partner. The disposal of shares crystallises the gain and allows the individual to make use of their CGT allowance. Of course, to buy back the shares, this may require a gift of the disposal proceeds to the spouse/partner.
Buy a similar asset
Share matching rules mean that the gain won’t be crystallised in the normal way if the investor buys back into the same fund within 30 days. However, this can be overcome by buying assets in a similar fund and means the investor is not out of the market.
Dave Downie is technical manager at Standard Life