The bed and breakfast rule (30-day rule) for shares and crypto
HMRC’s 30-day rule stops a simple sell-and-rebuy from banking a loss. Here is exactly how the bed and breakfast rule works, with a worked example.
The bed and breakfast rule is one of the most misunderstood parts of UK Capital Gains Tax. If you sell an asset and buy the same one back within a short window, HMRC will not let you use your Section 104 pool cost for that sale. This guide explains the bed and breakfast rule in plain English, with a worked example.
What is the bed and breakfast rule?
The bed and breakfast rule, set out in TCGA 1992 section 106A and HMRC manual CG51560, matches a disposal to any acquisition of the same asset in the 30 days after the sale. It exists to stop a specific trick: selling to crystallise a loss (or use your allowance) and buying straight back, while keeping the same position.
The name comes from the old practice of selling shares on one day and buying them back the next morning.
The identification order
When you sell, HMRC identifies which shares or tokens you sold in a fixed order:
- Same-day rule first: anything you bought on the same day.
- 30-day rule next: anything you bought back in the following 30 days.
- Section 104 pool last: the running average-cost pool.
Only what is left after the first two comes out of the pool. Pooled applies this order automatically and shows you which rule matched each part of a disposal.
A worked example
Say you hold 400 shares in a Section 104 pool at an average cost of £3.15 each, and the price has fallen. You sell all 400 for £2.86 each (£1,145) expecting a loss of about £116. Then, 9 days later, you buy 320 shares back at £3.25.
Because of the 30-day rule, 320 of the shares you sold are matched to that repurchase, not to your pool. Only 80 shares come out of the pool. The result is a far smaller allowable loss than the naive £116, because most of the "loss" was really just you keeping your position.
This is exactly the surprise the rule is designed to create, and it is why a tool that applies it correctly matters.
Does it apply to crypto?
Yes. Each token has its own Section 104 pool, and the same-day and 30-day rules apply to tokens just as they do to shares. A token-to-token swap counts as a disposal, so bed and breakfast matching can apply there too.
Check your own figures
You can see the rule in action on the free Section 104 calculator, or import your broker or exchange history and Pooled will match every disposal and show the working. For crypto specifically, see the UK crypto tax guide.
General information, not tax or financial advice. Every figure is an estimate to check against HMRC guidance or a qualified accountant before filing.