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Posted Sun, 07 Aug 2022 08:40:42 GMT by E
Hello, I read https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg55536 about how options are taxed when they are exercised but I have a question about how this needs to be reported in the Self Assessment when the writing of the option and the exercise happen on different fiscal years. Lets suppose the following case, * Sell call option written on 01/03/2021 - Premium £100 * Exercised on 01/03/2022 - Proceeds from selling the stock £1000 In that case, the Self Assessment for FY20-21 will include the £100 gain from the premium. But, how the exercise needs to be reported? a) FY21-22 will include £1000 gain from the exercise and the associated sell of the shares as the premium is already taxed and notify this fact in the Self Assessment. b) FY21-22 will include £1000+£100 (exercise+premium) and then request an amendment of FY20-21 return to set off the premium paid? Also, I'd like to understand how this affects the CTG for both FYs. Suppose that FY19-20 had a total gain of £100 (after loses, allowances, etc) which meant a £20 tax. * Using the previous case a), nothing needs to be done * Using the previous case b), I'd need to receive £20 Suppose that FY19-20 had a total gain of £0 (after loses, allowances, etc) which meant a £0 tax. * Nothing will need to be done in any case Suppose that FY19-20 had a total gain of £0 (before allowances, etc) * Case a) Nothing will need to be done * Case b) Will create a loss of £100 for FY20-21 Thank you
Posted Wed, 10 Aug 2022 07:49:05 GMT by HMRC Admin 17

Hi,
 
The split would be a question of fact so we couldn't answer without more info.

Please refer to CG22020 - Transfer of assets  : spouses or civil partners

                                                                          : jointly held assets - HMRC internal manual - GOV.UK (www.gov.uk)  .

Thank you.
 
Posted Wed, 10 Aug 2022 07:57:09 GMT by E
Hi, thank you for the answer, but how is that answer related to my question? My question is related to taxed premium of options in a different fiscal year than the exercise of the option, there is no transfer of assets involved. Thanks.
Posted Mon, 15 Aug 2022 10:14:05 GMT by HMRC Admin 19
Hi,

Please have a look at the following guidance:

CG12317 - Options: exercise of an option: consequential adjustments

SAM110230 - Repayments: issue repayment: S144 TCGA adjustments  

We can only signpost the guidance on this platform and can not comment on specific circumstances.

Anything more specific would need to be in writing or alternatively, seek independent financial advice.

Thank you.

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