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There are specific types of options which are financial products and these have different tax treatments in some respects from standard options, as set out below, including not being categorised as wasting assets¹and also that the owner of the option may get an allowable loss if the option is abandoned². The different types can be summarised as quoted, traded (see C2.1017) and financial options (see C2.1018).

Quoted options are ones which are listed on a recognised stock exchange³, quite often they are quoted options to subscribe for shares (commonly known as a share warrant) whereby the purchaser of the option is given the right to subscribe for shares in the company at a fixed price within a fixed period⁴.

The issue by a company to its shareholders of an option to subscribe for shares in the company is not a distribution because it is a disposal of an asset⁵.