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    • Home • Advice • Common questions

    Do you need to pay CGT when you 'Bed & ISA'?

    12 August 2024

    Question by Patricia

    I received some shares in 2000 as a demutilisation. We currently receive dividends each quarter, but I am thinking of doing a 'Bed & ISA'. Will I have to pay Capital Gains Tax on the increase of value in the shares before they pass into the ISA?

    Answered by Boring Money

    Yes.

    The current Capital Gains Tax -free allowance is £3,000 per year. When doing a Bed & ISA, you will have to pay Capital Gains Tax on the increase in value of the shares above the £3,000 allowance, assuming you have not already utilised this allowance for the current tax year.

    If you go ahead with this, any future increase in the value of the shares after completing the Bed & ISA will be exempt from taxes as they will then be held in the tax-free ISA wrapper.

    Answered by

    Boring Money

    Here to help you understand your options and make smart money choices.

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    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.