Bed & Breakfasting

This is probably only relevant to Brits and Paddies, but maybe relevant to others as well. I've seen Andrew using this term but its not one he uses in his books as far as I know, but it's worth understanding... I'll sum up what I understand from the conversations on his Facebook group here: 

When the day finally comes for you to embrace financial freedom, and possibly return to your home country, but without paying CGT on your precious investments, a ‘bed and breakfast deal’ is an investing strategy where an investor sells before the calendar year of repatriation and then buys back after repatriation.

This strategy allows investors to minimise the amount of capital gains taxes they must pay. So if you're repatriating, you'd sell off all your investments, bring the cash onshore CGT free, and then reinvest it onshore. 

At least in the UK, the total sum brought onshore would be capital gains tax free (as we already paid tax on this income in Singapore) but any funds it generates once reinvested onshore would be taxable as a capital gain, apart from the £20,000 per year that can be put into an ISA. Those new onshore funds would only be taxable from the step-up date of repatriation, and they would only be taxable on realised gains (profits made on sales) after the date of repatriation.

When the time comes there are likely to be important details to consider, like the actual optimal timing,  so every expat needs an excellent tax accountant to consult who has knowledge in expatriate matters before making their move.

It's possible that a skilled tax accountant may know of a way to avoid bed & breakfasting at all upon repatriation—personally I want whoever Jimmy Carr used...  . 

https://www.investopedia.com/terms/b/bed-and-breakfast-deal.asp 

#CapitalGainsTax #tax