Bed and ISA FAQs
What is Bed and ISA?
Selling investments held in a taxable general account and immediately rebuying them inside your ISA. The sale may trigger Capital Gains Tax on gains above £3,000, but everything afterwards · dividends and growth · becomes permanently tax-free. Most platforms handle it as a single instruction with reduced dealing costs.
Doesn't the 30-day rule stop me rebuying?
No. The bed-and-breakfast matching rule only applies when you rebuy in the same taxable account within 30 days. Rebuying inside an ISA (or pension) is specifically outside the rule · that is exactly why Bed and ISA exists. A spouse rebuying in their own account is also fine.
How much CGT does the sale trigger?
Only the gain above your £3,000 annual allowance is taxed · 18% basic rate, 24% higher rate. Feeding assets across gradually, up to £20,000 a year, and using each year's fresh allowance often means paying little or nothing. Couples can double everything: two allowances, two ISA subscriptions, £40,000 a year sheltered.
Is it worth it?
Usually, if you pay any dividend tax or expect meaningful future gains: a small one-off CGT bill buys permanent tax freedom. It is most compelling for higher-rate taxpayers holding dividend payers · 33.75% dividend tax vanishes from day one. This calculator's break-even year shows how quickly the move pays for itself.
When is the best time to do it?
Early in the tax year so the benefit runs longest, or just before 5 April to catch an expiring ISA allowance. Market dips are opportunistic windows too: lower prices mean smaller realised gains and a lower CGT cost for the same number of shares moved.
For informational purposes only · Not tax or investment advice · 2026/27: CGT allowance £3,000, rates 18%/24%; dividend allowance £500, rates 8.75%/33.75%/39.35%; ISA allowance £20,000 · Dealing costs and spreads not modelled · Investments can fall as well as rise