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Worried you’re missing part of your refund? Remember, the low and middle income tax offset isn’t a refund on its own – it’s used to offset (or reduce) the amount of tax you pay. The offset amount you may be entitled to is automatically applied and could range between $255-$1080, depending on things like your taxable income and how much tax you’ve paid.
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Re: Capital gain on exercising ETO

Newbie

Views 667

Replies 2

Hi, 
Let say I trade BHP ETO

Call premium = 4$, for Strike price = 30$
expiry is in 90 day

 

Stock price on expiry is 40$
option exercised on expiry,

BHP stock acquired on expiry cost = 30 + 4 = 34$

plan to sell this stock sometime in the future.
BHP stock market price at ETO exercise date is 40$


Is this option exercise, a CGT event? 
if so what is the CG in this case?

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 1

Check out this ATO web page.
Option exercise is not a CGT event.
When you sell BHP shares, CGT event occurs.
Cost base for BHP shares is $34, acquired on the option exercise date.




https://www.ato.gov.au/general/capital-gains-tax/shares,-units-and-similar-investments/rights-and-op...
2 REPLIES 2

Most helpful response

Devotee

Replies 1

Check out this ATO web page.
Option exercise is not a CGT event.
When you sell BHP shares, CGT event occurs.
Cost base for BHP shares is $34, acquired on the option exercise date.




https://www.ato.gov.au/general/capital-gains-tax/shares,-units-and-similar-investments/rights-and-op...

ATO Community Support

Replies 0

Hi @tailspin

 

Thanks @MS a good post. Capital gains only becomes relevant when you sell in the future.