When writing options, my understanding is that the premium generally triggers a CGT event D2 at that time, during the taxation year in which the event occurred. If option is exercised/assigned then the CGT event D2 is disregarded and the amounts are taken into the cost basis of the later CGT event.
I have 2 questions:
- If the option expires, then is the outcome that the original CGT event D2 (in relation to the premium received) remain and counted to the taxation year that the event originally occurred?
- If the option is exercised/assigned and the CGT event D2 is disregarded, does this mean that in the case where the option writer is forced to buy shares, the the cost basis of the shares would be reduced by the premium received?
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2 replies
2,300 views
2 replies