Bed and Breakfast rule for shares

Bed and Breakfast rule for shares

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Where several purchases and sales of shares are made within 30 days of a sale by an individual what is the set off order?

For instance if the original sale (sale A) was of 10,000 shares and 7 days later 5000 were bought (purchase A) back then seven days later 10000 more were sold (sale B) and seven days later 10000 were bought back(purchase B).

Am I correct in the following assumptions - they seem sensible to me but I daren't take anything for granted with the number of times rules seem to change:

1) Cost of Sale A Shares= cost of purchase A shares plus cost of 5000 of purchase B shares

2) Cost of Sale B Shares= cost of 5000 of purchase B shares + cost of 5000 shares in the pool

The above example is just to get my head around the correct set off order as my client is somewhat confused about how he should account for similar dealings he has done.

HMRC site seems a bit devoid of information apart from simplistic examples

Thanks for any assistance..

--

Brian

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By bstock
12th Sep 2010 16:40

Reply to myself.....

In case anyone else wondered what the answer was it seems to be as I thought (for a change!)

The page on HMRC site which details order of set off for Bed & Breakfast is

http://www.hmrc.gov.uk/budget2006/bn27.htm

Should I click "Best Reply" button??? .... or is it bad form to answer your own question :-)

 

 

 

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