UK options tax worked examples: the records you actually need

Research snapshot

Use this page when you already understand the strategy and need to understand the disposal events and record-keeping discipline behind it.

Worked example 1: long call closed for a profit

You buy one call for £350 equivalent in premium and later sell it for £620 equivalent. The gain is the disposal proceeds minus the acquisition cost and any allowable dealing costs. That position is one disposal for CGT purposes.

Worked example 2: cash-secured put expires worthless

You sell a put and collect £180 equivalent. The disposal event is the moment you wrote the put, not the day it expired. TCGA 1992 s.144(1) treats the grant of an option as itself the disposal of an asset, and HMRC's Capital Gains Manual at CG55536 puts it plainly: the premium, less any incidental costs of disposal, is assessable as a gain arising when the option is written. When the put then lapses, nothing further happens — CG55536 again: there is no effect on the grantor, and the charge on the premium simply remains.

So the £180 is a chargeable gain in the tax year of grant, and the expiry itself is a nil event for the writer. That is not a technicality. A put written in March 2027 that expires in April 2027 belongs in the 2026/27 computation, not 2027/28, because the tax year is fixed by the date you opened the position, not the date it ran out.

Worked example 3: covered call assignment

You sell a covered call, keep the premium, and the shares are called away. These are not two computations that merely need to be read alongside each other. They are legally one. TCGA 1992 s.144(2) provides that where the option is exercised, the grant of the option and the transaction the grantor enters into to fulfil the obligation are treated as a single transaction, with the premium forming part of the consideration for the share disposal.

In practice that means one disposal, with proceeds of strike plus premium, less the shares' allowable acquisition cost and any dealing costs. It also means the gain you already reported on the premium in the year of grant has to be unwound: CG55536 states that where tax was paid in respect of the receipt of the premium, it should be set off or repaid.

Worked example 4: vertical spread

A vertical spread is not one neat tax line. Each leg still needs to be tracked. The practical result is that one strategy can generate multiple entries across the life of the trade.

The right mindset is not "How do I make this look simple?" but "How do I keep a reliable ledger from day one?"

When to stop self-interpreting and get advice

• You are running high trade frequency every month.
• Options activity is starting to look like a business rather than a side strategy.
• You are mixing assignment, rolling, frequent spread management, and large FX movements.
• You cannot explain your own ledger cleanly without improvising.