Bed and breakfasting
Also known as: 30-day rule, B&B rule
A UK matching rule: disposals are matched to reacquisitions of the same token within 30 days, countering loss-harvesting by quick rebuys.
Definition
Bed and breakfasting refers to selling an asset and buying it back to crystallise a loss or reset cost while keeping exposure. The UK counters this with a 30-day rule: a disposal is first matched against same-day acquisitions, then against acquisitions in the following 30 days, before the Section 104 pool. South Africa does not use this pooled matching, but the SARS draft guide applies paragraph 42 of the Eighth Schedule, which defers a capital loss where an identical crypto asset is acquired within 45 days before or after the disposal.
Example
A UK investor sells ETH and rebuys it 10 days later. HMRC matches the disposal to that rebuy under the 30-day rule rather than to the pool.
Jurisdiction notes
- United Kingdom: HMRC applies a 30-day matching rule to counter bed-and-breakfasting of crypto tokens.
- South Africa: South Africa does not use UK-style pooled matching, but paragraph 42 of the Eighth Schedule can defer a capital loss where an identical crypto asset is reacquired within 45 days before or after the disposal, per the SARS draft guide.