How do I report Capital Gains Tax after Bed & ISA?

Hi Julie,

These are all very reasonable and logical questions, especially when you are just getting started as an investor:

1. With a Bed & ISA, you don’t need to wait 30 days. This is because the 30-day investment selling rule (also known as the bed and breakfasting rule) applies only to sales and repurchases within taxable accounts (GIAs).

This rule exists to prevent investors from selling shares to realise a capital loss or gain and then quickly repurchasing them, purely to manipulate their tax position. If you sell shares and then repurchase the exact same ones within 30 days, they will be matched as if you still owned the original shares, and the capital gain or loss will be calculated based on your original purchase price, not the repurchase price.

However, a Bed & ISA is different. With a Bed & ISA, the investor is transferring assets from a taxable account to an ISA, and they are accepting that capital gains tax (CGT) may be due on any realised profits. They are simply using the proceeds from the sale in the taxable account to repurchase the same investment within an ISA wrapper.

The investment repurchased within the ISA doesn't need to be the same as the one sold from the taxable account. You can choose to buy any eligible investment within the ISA. Technically, the sale and purchase are two separate transactions, even if they often involve the same asset.

If the shares sold had gains exceeding the investor’s CGT annual allowance, tax may be payable. This process can be repeated each year, gradually moving more assets into the tax-efficient ISA wrapper.

2. If you are doing this for the first time and the total gains from your GIA investments exceed the annual individual CGT allowance (£3,000 for 2025/26), or if the total amount you receive from selling assets exceeds £50,000, you will need to report this via Self-Assessment.

You can absolutely contact HMRC for guidance on how to get started, and there is also a wealth of helpful information available on their website.

The process involves two main steps:

• Register for Self-Assessment, and

• Report and pay your Capital Gains Tax via your Government Gateway account.

If you are unsure about handling it yourself or do not have the time, you might find it easier to appoint an accountant to take care of it for you.

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Important Information:
The information provided is for general guidance only and does not constitute personal financial advice or a recommendation. It is based on current understanding of HMRC rules and tax legislation, which may be subject to change. This response is intended to address your query in general terms; for advice tailored to your specific circumstances, a personalised financial review would be required.

Please note that all investments carry risk. The value of investments can fall as well as rise, and you may not get back the amount originally invested. Tax treatment depends on individual circumstances and may change in the future. Selling investments may give rise to a Capital Gains Tax (CGT) liability. The Bed & ISA process may involve market timing risk, as the price of the investment may move between the sale and repurchase. If you are unsure how this information applies to your situation, you should seek regulated financial advice.