UK options tax worked examples

What the examples assume

This is the options library's reference page for how UK capital gains tax treats listed options held personally in a general investment account. Other options pages give one sentence and link here. Each example names the statute, the date the result is taxed, the tax year and the SA108 box it lands in.

Options cannot be held in a stocks and shares ISA, a Junior ISA or a Lifetime ISA, so everything below is about a taxable account; the wrappers page covers the ISA rule, SIPPs and option-income funds.

Share options from an employer are outside this page. Every example here is an option bought or sold on an exchange. A share option granted by an employer falls under the employment-income rules of the Income Tax (Earnings and Pensions) Act 2003, Part 7, instead: EMI options (Schedule 5), CSOP options (Schedule 4) and SAYE or Sharesave options (Schedule 3) carry their own reliefs, which GOV.UK's Tax and Employee Share Schemes guide and HMRC's Employment-Related Securities Manual explain. Exercising an option outside those schemes usually gives employment income (ITEPA 2003 s476 and s477), and the site's RSU and share options calculator models that non-tax-advantaged case only; it does not attempt EMI, CSOP or SAYE.

• Tax year 2026/27. CGT is 18% on gains within the unused basic rate band and 24% above it; the annual exempt amount is £3,000 and the basic rate band £37,700 (GOV.UK CGT rates). Unless a line says otherwise, an example assumes the exempt amount is already used by other gains and shows both rates. Scottish and Welsh taxpayers use these UK bands for CGT, not their own income tax bands (TCGA 1992 s1J(6)). How gains on shares, property and crypto are worked out, and the reliefs that can apply to them, is in the UK Capital Gains Tax guide.
• Contracts. ICE UK stock options are 1,000 shares on the standard contracts used here, priced in pence (some large names, Tesco and HSBC among them, also have 100-share minis); ICE FTSE 100 options are £10 a point; US equity options are 100 shares (contract sizes).
• Traded options. Every option in the examples is a traded option for CGT: one listed on a recognised stock exchange or a recognised futures exchange (TCGA 1992 s144(8)(b)). For ICE, HMRC's list of recognised futures exchanges (CG56120, updated 6 October 2026) names the International Petroleum Exchange London from 1985-86 and the London International Financial Futures and Options Exchange from 1991-92; ICE Futures Europe carries on both, and on our reading it keeps those recognitions. For Cboe, GOV.UK's table of recognised stock exchanges has recognised US exchanges registered with the SEC as national securities exchanges since 22 October 1970, and it names the Chicago Board Options Exchange (recognised stock exchanges: United States). Both lists checked 10 October 2026.
• Commissions. £1.40 a contract on ICE stock options, charged on exercise and assignment too; £1.70 on FTSE 100 options; $1.00 an order on a one-contract US trade (the $0.65 a contract rate is below the $1.00 order minimum) (IBKR UK option commissions, checked 26 September 2026). Shares bought or sold in the market carry an illustrative £3.00.
• Premiums. Model values from the site's pricing model at the inputs stated under each example, filled on the exchange tick. A real fill sits somewhere inside the bid-ask spread; the tax works the same way on whatever price was paid. BP at 530p, Tesco at 450p, HSBC at 1,530p and the FTSE 100 at 10,750 are model levels, not views on those companies or the index; dates after today use assumed prices.
• Exchange rates. $1.3559 per £1 on 17 August 2026 and $1.3344 on 18 September 2026, the crosses of the ECB's euro reference rates (ECB reference rates, checked 27 September 2026). They illustrate the method; a real computation uses one stated source for every leg.

Rates checked on 9 October 2026. The 2026/27 Capital Gains Tax rates of 18% and 24%, the £3,000 annual exempt amount and the £37,700 basic rate band match GOV.UK (Capital Gains Tax rates; Income Tax rates and bands, basic rate £12,571 to £50,270). Any change made in the Autumn Budget on 28 October 2026 is tracked in the Autumn Budget 2026 tracker.

The conventions behind every modelled number on the options pages are on the methods page. To run a reader's own figures through the same rules, the UK options CGT calculator takes each event and the year's income.

Used on: covered call · cash-secured put · the Wheel · bull put spread · rolling · FTSE 100 options · US options from the UK · SA108

How many computations a position makes

One rule drives every "how many computations" line in the options library. For each option, find what finally happened to it; that decides whether there is a computation, which date it carries and which year it falls in. The expiry date only matters for a bought option that lapses.

Counted out, a vertical spread closed before expiry is 2 computations: the short leg's grant with its buy-back folded in, and the long leg's sale. An iron condor closed early is 4. A Wheel turn in which the put is assigned and the covered call is later assigned is 1 share computation (Example 3), because the put premium comes off the share cost and the call premium is added to the sale proceeds; every put or call along the way that lapsed or was bought back adds 1 more. Nothing in the rule counts "events": a buy-back, a lapse or an assignment changes an existing computation rather than creating a new one.

Written options: grant, lapse, buy-back, assignment and cash settlement

Writing an option is a disposal of the option itself, not a part disposal of any shares, and it applies whether or not the writer owns the shares (TCGA 1992 s144(1); CG12312). The gain is the premium less the costs of granting it, and it arises in the tax year of the grant (CG55536). What happens afterwards can change that computation:

• Lapse. Nothing further happens; the grant gain stands in the grant year.
• Buy-back. For a traded option, the closing purchase is not a disposal. Its cost, with its commission, is added to the incidental costs of the grant, so the grant gain falls or becomes a loss, dated at the grant, with immediate relief (s148; CG55545). It applies only to options listed on a recognised exchange (s148(4)), so not to CFD-style options.
• Assignment with shares delivered. The grant and the share transaction are treated as a single transaction: a call writer adds the premium to the sale proceeds, a put writer deducts it from the cost of the shares acquired (s144(2)). HMRC's manual says the grant then "ceases to be an occasion of charge", so any tax charged on it is set off or repaid (CG12317).
• Cash settlement against the writer. The writer is treated as disposing of the liability to pay; the payment is an incidental cost and the premium is the consideration; grant and settlement are one transaction, dated at settlement, and the result can be a loss (s144A(2); CG12321: £20,000 premium, £30,000 paid, £10,000 loss).

Example 1: a Tesco put written in March 2027 that lapses in April

On Monday 15 March 2027 the writer sells one Tesco 430p put expiring Friday 16 April 2027 for 3.75p a share, £37.50 on the 1,000-share contract, and pays £1.40 commission. Tesco stays above 430p and the put lapses.

Model inputs: Tesco assumed at 450p on 15 March 2027, 32 days, IV 22%, r 3.75%, no ex-dividend date assumed in the option's life; American put on the binomial tree: model value 3.79p, filled at 3.75p.

The gain belongs to 2026/27 because that is when the option was written; the April expiry does not move it. With the exempt amount used elsewhere it costs £6.50 of tax at 18% or £8.66 at 24%. SA108 for 2026/27, "Other property, assets and gains": 1 disposal in box 14, £37.50 in box 15, £1.40 in box 16, £36.10 in box 17.

Load this example into the CGT calculator (it opens with the event filled in).

Example 2: the same put bought back after 5 April

Take Example 1, but Tesco falls to 420p. On Thursday 8 April 2027, in the new tax year and eight days before expiry, the writer buys the put back for 11.75p (£117.50) plus £1.40, and the same day sells a 400p put expiring Friday 21 May 2027 for 4.50p (£45.00) plus £1.40.

Model inputs: Tesco at 420p on 8 April 2027, IV 22%, r 3.75%; American puts on the tree. No dividend is modelled before 21 May 2027. The wheel page assumes a 9.70p final going ex on Thursday 13 May 2027, inside the 400p put's life (Tesco had not published its 2027 dates on the model date; the 2025/26 final of 9.7p had a record date of 15 May 2026); it is left out here because it would raise that put's value, not change the tax treatment. 430p put, 8 days: model value 11.69p, filled at 11.75p. 400p put, 43 days: model value 4.42p, filled at 4.50p.

A trade made in 2027/28 changes the 2026/27 computation. In April the 2026/27 return is normally not yet filed, so the grant simply goes on it with the buy-back included in its costs; only a return already filed would need correcting. The £82.80 loss is set against the writer's other 2026/27 gains. The new put has a different strike and expiry, so it is a different series and nothing pools. The rolling page works the same mechanics through a full roll.

Derived: HMRC gives no worked example. HMRC's manual has no example of a buy-back in the tax year after the grant; this follows from s148 treating the buy-back cost as a cost of the grant, which is dated when made.

SA108. 2026/27, "Other property": box 15 £37.50, box 16 £120.30, box 19 £82.80. 2027/28: box 15 £45.00, box 16 £1.40, box 17 £43.60.

Load this example into the CGT calculator (it opens with the event filled in).

Example 3: the same put assigned, then the shares called away (one Wheel turn)

This time Tesco closes at 415p on Friday 16 April 2027 and the put is assigned: the writer buys 1,000 Tesco shares at 430p. Under s144(2)(b) the grant and the purchase are one transaction, so the premium is not a gain at all; it reduces the cost of the shares. The shares are acquired on the exercise date, 16 April 2027, not on the settlement date two business days later (s28(2); CG14261), so the whole computation sits in 2027/28 and nothing is reported for the grant in 2026/27.

The writer now holds the shares and, on Monday 19 April 2027 with Tesco at 420p, writes one 440p call expiring Friday 21 May 2027 for 4.25p (£42.50, £1.40 commission). Tesco closes at 455p on expiry day and the shares are called away at 440p.

Model inputs: Tesco at 420p on 19 April 2027, 32 days, IV 22%, r 3.75%, no dividend modelled before 21 May 2027 (Example 2 explains why a mid-May final dividend is likely; one would lower the call's value, and a holder might exercise the call before the ex-date): model value 4.24p, filled at 4.25p.

That is one full turn of the Wheel: a put assigned, a covered call assigned, and a single share computation that carries both premiums, the put's as a lower cost and the call's as extra proceeds. The writer paid SDRT once, on the way in; on the call-away the exercising holder, as buyer, pays 0.5% of £4,400, £22.00. Each put or call that had lapsed or been bought back along the way would add its own computation. SA108 for 2027/28, "Listed shares and securities": box 23 one disposal, box 24 £4,442.50, box 25 £4,289.60, box 26 £152.90. Had the shares been sold at a loss shortly before a put assignment, the 30-day rule would change the answer: see Example 11.

Example 4: a BP covered call assigned in the same tax year

An investor holds 1,000 BP shares bought in 2025 at 480p: £4,800 plus £24.00 SDRT and £3.00 commission, a section 104 pool cost of £4,827.00. On Monday 17 August 2026 they write one BP 560p call expiring Friday 16 October 2026 for 12.00p, £120.00, and pay £1.40. BP closes at 575p on expiry day, the call is assigned and the shares go at 560p.

Model inputs: BP 530p (model level; BP closed at 519.6p on 17 August 2026), 60 days, IV 26%, r 3.75%, no ex-dividend date before 12 November 2026 so no dividend in the option's life: model value 11.97p, filled at 12.00p.

Grant and assignment fall in the same tax year, so this is one computation and the premium is never taxed on its own: £160.24 at 18% or £213.65 at 24% with the exempt amount used. The writer pays no SDRT on the delivery; the exercising holder, as buyer, pays 0.5% of £5,600, £28.00. Had the call been written in March 2027 and assigned in April 2027, the same computation would be dated at the April exercise and belong to 2027/28, with nothing left in 2026/27 for the grant. SA108 for 2026/27, "Listed shares and securities": box 23 one disposal, box 24 £5,720.00, box 25 £4,829.80, box 26 £890.20.

Example 5: a FTSE 100 put settled in cash against the writer

On Monday 17 August 2026 the writer sells one FTSE 100 10,500 put expiring Friday 16 October 2026 for 146 points, £1,460.00 at £10 a point, and pays £1.70. The index falls and the exchange delivery settlement price (EDSP) on expiry day is 10,200: the put settles 300 points in the money and the writer pays £3,000.00.

Model inputs: FTSE 100 at the model level of 10,750 (it closed between about 10,600 and 10,900 in August and September 2026), 60 days, IV 14.94% at the 10,500 strike on the site's one FTSE surface, r 3.75%, dividend yield 3.05%, European: model value 145.82 points, filled at 146 points.

Had the index settled above 10,500, nothing would be paid, s144A would never apply, and the grant would stand as a gain of £1,458.30 dated 17 August 2026. HMRC's own example in CG12321 has the same shape. SA108 for 2026/27, "Other property": box 15 £1,460.00, box 16 £3,001.70, box 19 £1,541.70.

Load this example into the CGT calculator (it opens with the event filled in).

Written in March, settled in April. Move the trade: the writer sells the same 10,500 put on Monday 15 March 2027, expiring Friday 16 April 2027, for 86 points (£860.00). The model inputs are the same except for the dates: the index assumed at 10,750 on 15 March and 32 days to run, giving a model value of 86.24 points.

A written cash-settled option opened before 5 April has no settled tax year until it ends: a winner lands in the grant year, a loser that is settled lands in the next year, where it cannot be carried back against the grant year's gains.

Derived: HMRC gives no worked example. HMRC's manual gives no example of a cash-settled written option that crosses 5 April; this reading follows from s144A(2)(b), which makes the grant and the settlement a single transaction.

Bought options: sale, lapse, exercise and cash settlement

• Sale to close. An ordinary disposal (CG55536). Options of the same series are pooled, so the same-day and 30-day rules apply to them (below).
• Lapse. For a traded option the abandonment is a disposal, so the whole cost is an allowable loss in the year it lapses (s144(4)(b); CG55415). Traded options are not wasting assets, so none of the cost is written off over time (s146).
• Exercise with shares delivered. Not a disposal of the option. A call's cost is added to the cost of the shares; a put's cost is an incidental cost of disposing of the shares (s144(3); CG12314).
• Cash settlement. A disposal of the right to the payment: the cash received is the proceeds and the option's cost is the allowable cost (s144A(3); CG12322).

Example 6: a BP call at expiry, sold or exercised

On Monday 17 August 2026 an investor buys one BP 500p call expiring Friday 16 October 2026 for 42.00p, £420.00, plus £1.40. On expiry day BP is at 545p, so the call is worth its 45p intrinsic value.

Model inputs: BP 530p (model level), 60 days, IV 26%, r 3.75%, no dividend in the option's life: model value 42.03p, filled at 42.00p. The sale assumes a bid at intrinsic value.

Selling realises £27.20 now. Exercising costs £25.00 of SDRT that the sale does not (the £1.40 exercise commission takes the place of the £1.40 sale commission), and carries the option's cost into the shares, where it waits for their sale. For an investor who wants to own BP, the exercise route delivers the shares in one step; the alternative is selling the call and buying shares in the market, which also carries 0.5% SDRT on the purchase. SA108: the sale goes in "Other property" for 2026/27 (box 15 £450.00, box 16 £422.80, box 17 £27.20); the exercise puts nothing on the 2026/27 form. HMRC's working sheet cannot be used for shares acquired by exercising an option, so the later share sale needs a computation attached (SA108 notes).

Example 7: a protective put exercised against a share holding

A second investor holds the same 1,000 BP shares, pool cost £4,827.00. On 17 August 2026 they buy one BP 500p put expiring 16 October 2026 for 9.00p, £90.00, plus £1.40. BP falls to 455p by expiry and they exercise, delivering their 1,000 shares at 500p.

Model inputs: BP 530p, 60 days, IV 26%, r 3.75%, no dividend in the option's life; American put on the binomial tree: model value 9.04p, filled at 9.00p.

The put holder sells the shares, so pays no SDRT; the assigned writer, as buyer, pays £25.00. The two-trade alternative, selling the shares at 455p and the put at 45p, gives two computations in two sections of the form: a share loss of £280.00 under "Listed shares" and an option gain of £357.20 under "Other property", £77.20 net, the £3.00 difference being the share-dealing commission. Exercising gives one. SA108 for 2026/27, "Listed shares and securities": box 24 £5,000.00, box 25 £4,919.80, box 26 £80.20.

Example 8: the Example 5 FTSE put from the holder's side

The buyer of the 10,500 put in Example 5 paid £1,460.00 plus £1.70. At an EDSP of 10,200 they receive £3,000.00. Under s144A(3) this is a disposal of the right to the payment: the payment is the proceeds and the premium the cost.

If the index settles above 10,500 the put lapses: an allowable loss of £1,461.70 under s144(4)(b), dated 16 October 2026. No shares change hands, so there is no SDRT and no share computation. The holder's result is dated when the put is sold, settles or lapses; the writer's, as Example 5 shows, is dated at settlement only when the put is settled against them. SA108 for 2026/27, "Other property": box 15 £3,000.00, box 16 £1,461.70, box 17 £1,538.30.

What exercise and assignment do to the share computation

When shares change hands under an option, the option disappears into the share computation. The four cases side by side:

In every case the share acquisition or disposal is dated on the exercise date, because a contract conditional on the exercise of an option is made when the condition is satisfied (TCGA 1992 s28(2)); the settlement two business days later does not move it. US shares delivered under US options carry no UK SDRT. How assignment is allocated, when early exercise is likely and what a broker does at expiry are on the assignment and expiry page.

Example 9: a short call assigned without the shares

A writer sells the same BP 560p call as Example 4 (£120.00 premium, £1.40 commission) but holds no BP shares, as the short leg of a spread or as an uncovered call. It is assigned on Friday 16 October 2026, so the writer has delivered 1,000 shares they did not own: a short sale at 560p. On Monday 19 October 2026 they buy 1,000 BP at 578p to close it, paying £28.90 SDRT and £3.00.

The 16 October disposal is identified with the shares bought three days later because the 30-day rule matches a disposal with shares of the same class acquired in the 30 days after it (s106A(5)). It is one computation, in "Listed shares". If the short position stayed open for more than 30 days the identification is less simple, and large positions like that may justify a tax adviser's view. What a broker does with a delivery the writer cannot make is on the assignment page.

Derived: HMRC gives no worked example. HMRC's manual has no example of an assigned call with no shares held; this applies s144(2)(a) and s106A(5).

SDRT on exercise and assignment: who pays, and where it goes

Stamp duty or SDRT of 0.5% is charged on the consideration for UK shares delivered under a physically settled option, which is the strike price times the shares (STSM113030), and the purchaser is liable (Finance Act 1986 s91). Writing an option carries none (STSM113010). Transfers of the options themselves are within SDRT in principle (STSM113020), but in normal ICE dealing none is charged; the 0.5% arises when shares are delivered.

This page counts SDRT as part of the cost of the shares acquired, as a cost of the transfer (TCGA 1992 s38(2)). CG15250 names stamp duty among incidental costs and says nothing separate about SDRT, so that inclusion is a derived reading. The rate is 1.5% where shares go into a depositary receipt or clearance service, which does not arise on a normal retail delivery. Recognised options intermediaries have reliefs (STSM112120), which is why market makers can exercise calls early for a dividend that a retail holder, paying 0.5%, would not; the test is on the assignment page, with who pays in practice at SDRT: who pays.

Same-day and 30-day matching, and same-series pooling

• Shares. A disposal is matched first with shares of the same class bought the same day (s105(1)), then with shares bought in the 30 days after the disposal (s106A(5); CG51560), and only then with the section 104 pool. Shares acquired by the assignment of a written put or the exercise of a bought call are acquisitions on the exercise date and are matched like any other purchase.
• Writing a put is not an acquisition. Only an assignment acquires shares, so a put written inside the 30 days that is never assigned does not trigger the rule.
• Options. HMRC's manual: "options of the same series are pooled in a Section 104 holding", so the share identification rules apply to a disposal of options of that series (CG55535). A series is one type (put or call) on one share with one expiry and one strike; a different strike or expiry is a different series. The manual does not address grants, which are disposals, so treating only bought options as pooled is an inference.
• An option is not a share. Buying a call within 30 days of selling the shares does not by itself match with the sale; exercising it inside the 30 days does, because that acquires shares.
• Artificial losses. Arrangements whose main purpose is a tax loss can be denied under the targeted anti-avoidance rule in s16A (CG13350). The general 30-day rule for shares is on the bed-and-breakfasting page.

Example 10: a call sold at a loss before 5 April and bought back inside 30 days

On Monday 15 February 2027 an investor buys one BP 560p call expiring Friday 16 April 2027 for 10.00p: £101.40 with commission. On Monday 22 March 2027, BP at 520p, they sell it for 2.75p (£26.10 after commission), expecting to bank a £75.30 loss in 2026/27. On Thursday 1 April 2027, BP at 525p, they buy the same series back for 1.50p (£16.40 with commission). BP ends below 560p and the call lapses on 16 April.

Model inputs: BP assumed at 530p on 15 February 2027, IV 26%, r 3.75%, one assumed dividend of 6.39p ex 18 February 2027 (BP had not published its 2027 dates on the model date), American call on the tree: 60 days, model value 9.92p, filled at 10.00p. 22 March, 25 days: model value 2.77p, filled at 2.75p. 1 April, 15 days: model value 1.62p, filled at 1.50p.

The £75.30 loss the investor expected in 2026/27 becomes a £9.70 gain in 2026/27 and a £101.40 loss in 2027/28. The total over both years is the same loss of £91.70; what moves is the year, and a 2027/28 loss cannot be carried back.

Derived: HMRC gives no worked example. HMRC's manual has no example with options; this applies CG55535 and s106A(5) as written.

Example 11: shares sold at a loss, then a put assigned inside 30 days

An investor holds 1,000 Tesco shares bought at 480p: £4,800 plus £24.00 SDRT and £3.00, a pool cost of £4,827.00. On Monday 17 August 2026 they write one Tesco 430p put expiring Friday 16 October 2026 for 8.25p (£82.50, £1.40 commission). On Thursday 1 October 2026 they sell the shares at 440p, £4,397.00 after £3.00 commission, expecting a loss of £430.00. On 16 October Tesco is at 425p and the put is assigned: 1,000 shares acquired at 430p, 15 days after the sale.

Model inputs: Tesco 450p (model level; Tesco closed at 447.8p on 17 August 2026), 60 days, IV 22%, r 3.75%, an assumed interim dividend of 5.08p ex 15 October 2026 (not declared on the model date; Tesco declared 5.05p on 8 October 2026, ex 15 October, and the example is not re-priced); American put on the tree: model value 8.30p, filled at 8.25p.

The expected £430.00 loss turns into a £155.20 gain. The old cost is not lost: the 1,000 shares now held are, for tax, the original pool at £4,827.00, so the loss is deferred until those shares are sold without a re-purchase inside 30 days. The put was written before the sale, but writing it acquired nothing; the acquisition is dated at the exercise, 16 October, inside the 30 days. This is the trap for anyone running the Wheel or cash-secured puts on a share they have just sold.

Derived: HMRC gives no worked example. HMRC's manual has no example of a put assignment inside the 30 days; this applies s106A(5), s144(2)(b) and s28(2).

Example 12: shares called away, then bought back inside 30 days

The Example 4 investor's shares are called away on Friday 16 October 2026 at 560p, with disposal proceeds of £5,720.00 including the premium. On Friday 23 October 2026 they buy 1,000 BP again at 565p: £5,650.00 plus £28.25 SDRT and £3.00, £5,681.25.

Instead of Example 4's £890.20, the 2026/27 gain is £35.95; the £854.25 difference is deferred, because the shares now held keep the old pool cost of £4,827.00. Re-buying soon after an assignment changes which year a gain falls in rather than whether it is taxed.

Derived: HMRC gives no worked example. HMRC's manual has no options example; this applies s106A(5) to the share disposal that s144(2)(a) creates.

Positions that straddle 5 April

The tax year runs from 6 April to 5 April. For options the year follows the event that ends the position, which is often not the expiry date. On the timeline the filled marker shows where each result is dated.

Two things follow. A written option bought back in April belongs, net, to the grant year; nothing needs correcting unless the earlier return has already gone in. And the trap runs the other way for bought options: a bought leg's loss that arises after 5 April cannot be carried back against a gain from the grant year. It is set against the new year's gains or carried forward.

Example 13: an HSBC bull put spread opened in March, both legs lapse in April

On Monday 22 March 2027 the investor writes one HSBC 1,500p put for 25.00p (£250.00) and buys one 1,450p put for 10.50p (£105.00), both expiring Friday 16 April 2027, with £1.40 commission on each leg: a credit of £145.00 before commission. HSBC stays above 1,500p and both puts lapse.

Model inputs: HSBC assumed at 1,530p on 22 March 2027 (it closed at 1,531.0p on 17 August 2026), 25 days, IV 25%, r 3.75%, no ex-dividend date assumed in the options' life; American puts on the tree: model values 25.01p and 10.57p, filled at 25.00p and 10.50p.

Over the two years the spread nets £142.20. But 2026/27 carries a £248.60 gain (£44.75 of tax at 18% or £59.66 at 24% with the exempt amount used), while the £106.40 loss sits in 2027/28: relief deferred to 2027/28, and lost only if never used. Had the long put been sold before 6 April, even for a fraction of a penny, its loss would have been dated in 2026/27 with the short leg's gain. The bull put spread page applies this to its own worked trade. SA108: 2026/27 "Other property" box 15 £250.00, box 16 £1.40, box 17 £248.60; 2027/28 box 16 £106.40, box 19 £106.40.

US options: two dates, two rates

Costs and proceeds in dollars are each converted into sterling at the rate for their own date; HMRC rejects working out the gain in dollars and converting the net figure (CG78310, citing Bentley v Pike and Capcount). For a written option closed under s148, the premium converts at the grant date's rate and the buy-back at the buy-back date's rate, even though both belong to the grant's tax year.

Which exchange rate

HMRC "does not prescribe what reference point should be used for the exchange rate" and expects a reasonable, consistent method (CG78310). The least arguable method is the day's rate for each leg from one stated source, such as a central bank's daily reference rate or the broker's own rate for that trade, applied the same way all year. HMRC publishes monthly exchange rates for customs and VAT; CG78310 does not endorse them for capital gains, and a single yearly average used for both legs of a trade amounts to converting the net figure. A broker's sterling profit and loss report usually converts both legs at one rate: it is evidence of the dollar amounts, not the computation. Foreign currency bank accounts held by individuals have been outside CGT since 6 April 2012 (CG78321); HMRC's guidance does not say whether a dollar balance at a broker counts as one.

Example 14: a US call bought and sold, converted leg by leg

On Monday 17 August 2026 the investor buys one call on a US share trading at $150 (an illustrative share; 100-share contract), strike $155, expiring Friday 16 October 2026, for $5.50: $550.00 plus $1.00 commission. On Friday 18 September 2026, with the share at $165, they sell it for $12.10: $1,210.00 less $1.00.

Model inputs: share $150, 60 days, IV 30%, US rate 3.625% (the midpoint of the Federal Reserve's target range on 17 August 2026), no dividend: model value $5.51, filled at $5.50 on the $0.10 tick. On 18 September, share $165, 28 days: model value $12.06, filled at $12.10. Exchange and regulatory fees of a few cents are left out.

Converting the $658.00 dollar gain at the sale date's rate would give £493.11: the net method CG78310 rules out. The gap is £6.54 here because the pound weakened by about 1.6% between the two dates; over a volatile month it can be larger, and it can turn a small dollar gain into a sterling loss. SA108: "Other property", box 15 £906.77, box 16 £407.12, box 17 £499.65.

Example 15: a US put written and bought back at a loss

Same share, same day: the investor writes one $140 put expiring 16 October 2026 for $2.90, $290.00, with $1.00 commission. The share falls to $138 by Friday 18 September 2026 and they buy the put back for $5.50, $550.00, plus $1.00.

Model inputs: share $150, 60 days, IV 30%, US rate 3.625%, American put on the tree: model value $2.91, filled at $2.90 on the $0.05 tick. On 18 September, share $138, 28 days: model value $5.49, filled at $5.50.

The dollar loss of $262.00 converted at one rate, 1.3559, would give £193.23; leg by leg it is £199.78, because the buy-back was paid for when the pound bought fewer dollars. Had the put been written in March and bought back in April, the loss would still belong to the grant year and still be converted leg by leg.

Derived: HMRC gives no worked example. HMRC's manual has no example of s148 with a foreign-currency buy-back; this combines s148 with CG78310.

Load this example into the CGT calculator (it opens with the event filled in).

What the US side takes

No US tax is withheld on option gains for a UK-resident individual: gains from property are not income subject to US withholding (IRS Publication 515), and under the UK-US treaty such gains are taxable only in the country of residence (Article 13(5)), so the UK computation above is the whole of it. A W-8BEN establishes foreign status and claims the treaty rate of 15% on US dividends if an assignment leaves the investor holding US shares over an ex-dividend date (30% without it); it stays valid to the end of the third calendar year after signing. Withholding on dividend equivalents under section 871(m) does not reach ordinary listed options issued through 2028, subject to an anti-abuse rule (IRS Notice 2026-61); the next date is 1 January 2029. An assigned SPY option delivers units in a fund that is not on HMRC's reporting fund list (edition of 4 September 2026), whose gains are taxed as income; QQQ and IWM are reporting funds (offshore funds). SPX and XSP options are cash-settled, so s144A applies and no shares or SDRT are involved.

Losses: the set-off order, carrying forward and the four-year claim

• Losses are deducted from gains of the same tax year first, in full, even where that uses up gains the exempt amount would have covered.
• Losses brought forward are used only to bring a year's gains down to the exempt amount; the rest carries on forward (GOV.UK: CGT losses).
• A loss counts only once it is notified to HMRC (TCGA 1992 s16(2A)). Including it on the tax return is the claim; someone not registered for Self Assessment who has never made a gain can write to HMRC instead. The time limit is 4 years from the end of the tax year of the disposal, so a 2026/27 loss can be claimed until 5 April 2031.

Example 16: a loss carried through two later years

In 2026/27 one investor has Example 4's covered-call gain of £890.20 and Example 5's FTSE put loss of £1,541.70. In 2027/28 they have gains of £3,400.00 and in 2028/29 gains of £3,900.00, with no losses in either year. The later years assume the exempt amount stays at £3,000.

In 2026/27 the £890.20 gain was already inside the £3,000 exempt amount, but the same-year loss still has to be set against it in full, so only the net loss of £651.50 carries forward. In 2027/28 only £400.00 is used, the amount that brings £3,400.00 down to £3,000. In 2028/29 the last £251.50 is used and £648.50 is taxable. Box numbers are from HMRC's SA108 notes 2026, for 2025/26 ("Losses brought forward and used in-year" is box 45, "Losses available to be carried forward" box 47); the 2027 notes, for 2026/27, had not been published when this page was checked on 27 September 2026.

A year put together: the exempt amount and the two rates

Example 17: one taxpayer's 2026/27

Take one taxpayer whose 2026/27 includes Examples 1, 4, 6 (the call, sold on 21 August 2026 at 45p with BP at 535p, since this taxpayer's Example 4 has BP at 575p on 16 October), 8 (the holder's settlement), 13 (the short leg's grant) and 14, plus Example 15's loss. Gains: £36.10 + £890.20 + £27.20 + £1,538.30 + £248.60 + £499.65 = £3,240.05. Loss: £199.78. Net £3,040.27: after the £3,000 exempt amount, £40.27 is taxable: £7.25 at 18% or £9.66 at 24%. The SA108 pages are needed anyway, because gains before losses exceed £3,000 and a loss is being claimed.

Now multiply every figure by ten, as a stand-in for a larger account (at ten contracts the per-order US commission would not scale exactly):

At this size the disposal proceeds also pass £50,000 (the call-away alone brings £57,200), which is a separate reason to complete the SA108. Gift Aid donations extend the basic rate band for CGT as they do for income tax, and so do relief-at-source pension contributions where income tax at the higher or additional rate would otherwise be due (TCGA s1J(8), with ITA 2007 s414 and FA 2004 s192(4); how these provisions connect is a derived reading, which HMRC's manual does not work through); the CGT calculator takes a band extension. The £12,570 personal allowance is the 2026/27 standard amount (GOV.UK income tax rates).

The same trade as a spread bet or a CFD

• Spread bets. No chargeable gains or allowable losses arise from spread betting (CG56105).
• CFDs. Within capital gains tax as financial futures under s143 unless the person is trading; every debit and credit on the contract goes into one gain or loss when it closes (CG56100). A CFD-style option is not listed on an exchange, so s148 does not apply to it (s148(4)). CFDs carry no stamp duty or SDRT (STSM118040).

Example 18: the Example 8 FTSE put as a listed option, a CFD option and a spread-bet option

Assume each route pays the same 146 points at £10 a point and settles at the same level; the providers' spreads, financing and any commission are left out, because they are costs, not tax. The taxpayer pays 24% and has used the exempt amount elsewhere.

The spread bet keeps more when the trade wins and costs more after tax when it loses. For writers there is also a timing difference: a listed written option that is bought back is dated at the grant (s148), while a written CFD option has no s148, and CG56100 puts all its debits and credits into one result when the contract closes, so a CFD position opened in March and closed in April falls in the later year. The costs, margin rules and product differences are compared on the three-ways comparison page.

Derived: HMRC gives no worked example. HMRC's manual has no example of a written CFD option; this reading follows from CG56100 and s148(4).

Where each result goes on the SA108

The Capital Gains Tax summary (SA108) is needed if disposal proceeds exceed £50,000, gains before losses exceed £3,000, or a loss is claimed (SA108 notes 2026). Every premium received on a grant that lapses or is bought back counts as disposal proceeds, and so does a call premium added to the proceeds of shares called away, so an active writer can pass £50,000 with modest profits; a put premium that reduces the cost of assigned shares is not proceeds. HMRC's notes mention options only to say that the working sheet cannot be used for an asset acquired by exercising one. They do not say which section an option result belongs in, so the table below is a reading of HMRC's box definitions: an option is not a share or security of a company, so a stand-alone option result fits "Other property, assets and gains", while a premium folded into a share transaction goes with that share disposal.

The working sheet in the notes cannot be used for an asset acquired by exercising an option, so the computations go with the return. A filled-in form for a full year of options is on the SA108 page, which also covers the rare case where option dealing could be a trade (trading or investing).

Where HMRC gives no worked example

The rules on this page are statute and HMRC's own manual. The points below apply them to cases HMRC does not work through, and are marked on the page:

• A buy-back in the tax year after the grant, and a buy-back paid in dollars (Example 2, Example 15).
• A written cash-settled option that crosses 5 April (Example 5).
• A call assigned with no shares held (Example 9).
• The 30-day rule with options: a same-series re-purchase, a put assigned after a share sale, and a re-purchase after a call-away (Examples 10, 11 and 12).
• A written CFD option closed in a later tax year (Example 18).
• SDRT counted in the share cost, and the SA108 section chosen for option results.

For large positions, cross-year cases, or a return already filed, a tax adviser's view may be worth the fee; the site's guide to finding a UK tax adviser covers the professional bodies.

Download the computations, and how they were made

Download the computations as a CSV file (one row per computation: event, rule, date, tax year, proceeds, costs, gain or loss and SA108 section). It opens in any spreadsheet.