CG55545 - Traded options: tax treatment: grantor of option: option closed out
TCGA92/S148
Section 148 applies to both put and call options. As explained in CG55528 the grantor of an option may close out a traded option by buying an equal and opposite option.
»Ê¹ÚÌåÓýapp cost of buying the purchased option plus any incidental expenses is treated as an allowable cost of granting the first option. »Ê¹ÚÌåÓýapp gain on the grant of the first option will thus be reduced. »Ê¹ÚÌåÓýapp grantor does not have to wait until the second option expires before getting relief.