Bed And Breakfast Deal

In finance, the term bed and breakfast deal refers to a practice in which securities are sold at the close of a trading day and repurchased at the opening of the following trading day.

The term also refers to the practice of selling securities at the close of a tax year and repurchasing the same shares at the opening of the new tax year. This practice is common in countries which levy capital gains taxes but have annual tax-free capital gains allowances. By selling securities at the end of the year, investors can claim the tax-free capital gains allowance, after which they repurchase the securities which they wish to hold.

In Switzerland, private investors do not pay capital gains tax on securities investment returns.

More on this topic:
Swiss stock broker comparison
Swiss taxes on capital gains explained
 

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