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Re: Tax on ETOs

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Hi,
When reporting share and index options as an investor, do I report all options as CGT events in the financial year they are opened even if they are closed/expire/assigned/exercised in the following financial year?

If this is the case do I then include the second event (closed/assigned/exercised) in the next financial year as a seperate CGT event or amend the previous year's return to include the second event?

Thanks.
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Moderator

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Hi @Southern123321,

 

Thanks for your patience.

 

As an investor in shares and rights there is generally no CGT on the acquisition of shares and rights. CGT can arise at the time a CGT event occurs.

 

For a transfer of property a CGT event arises when the contract to dispose of  the asset is entered into. However, some situations do not involve a CGT event A1 for disposal of an asset. A CGT event C2 can arise on the close-out of an ETO: see ATO ID 2005-164. CGT event C2 can also apply to expiration of rights.

 

Thanks

 

KylieS

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Moderator

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Hi @Southern123321,

 

Thanks for your question. We are going to do some research and will get back to you as soon as we can.

 

Thanks

 

KylieS

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Best answer

Moderator

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Hi @Southern123321,

 

Thanks for your patience.

 

As an investor in shares and rights there is generally no CGT on the acquisition of shares and rights. CGT can arise at the time a CGT event occurs.

 

For a transfer of property a CGT event arises when the contract to dispose of  the asset is entered into. However, some situations do not involve a CGT event A1 for disposal of an asset. A CGT event C2 can arise on the close-out of an ETO: see ATO ID 2005-164. CGT event C2 can also apply to expiration of rights.

 

Thanks

 

KylieS

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