In the United Kingdom, the practice whereby the holder of a security sells it at the end of the day on the last day of the financial year and buys it back the next morning. Arrangements are made between the holder of the security and the broker to accommodate the sale and repurchase.
Taobiz explains Bed And Breakfast Deal
A bed and breakfast deal is carried out to maintain an investment portfolio while minimizing capital gains taxes. Positions are closed out at the end of the year and immediately reopened on the first day of the new financial year. Because this practice intentionally seeks to limit capital gains taxes, tax authorities work to minimize the occurrence of bed and breakfast deals.