144 Options and forfeited deposits
Taxation of Chargeable Gains Act 1992 (1992 c 12) | Legislation

144  Options and forfeited deposits

(1)     Without prejudice to section 21, the grant of an option, and in particular—

(a)     the grant of an option in a case where the grantor binds himself to sell what he does not own, and because the option is abandoned, never has occasion to own, and

(b)     the grant of an option in a case where the grantor binds himself to buy what, because the option is abandoned, he does not acquire,

is the disposal of an asset (namely of the option), but subject to the following provisions of this section as to treating the grant of an option as part of a larger transaction.

(2)     If an option is exercised, the grant of the option and the transaction entered into by the grantor in fulfilment of his obligations under the option shall be treated as a single transaction and accordingly—

(a)     if the option binds the grantor to sell, the consideration for the option is part of the consideration for the sale, and

(b)     if the option binds the grantor to buy, the consideration for the option shall be deducted from the cost of acquisition incurred by the grantor

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