Tax Query, page-2

  1. 415 Posts.
    If you exercise an option the puchase date of the shares for capital gains purpose is the exercise date not the original date the options were purchased. The puchase price is the price you paid for the option plus the exercise price.

    There is a potential trap here that if you have held options for longer than 12 months that you have a gain on and are in the money it may be more beneficial to sell the options and get the 12 month capital gains discount rather than exercise the options to fully paid shares especially if you are unsure of how long you will want to hold the fully paids for.

    You could end up making more profit but lossing the 12 month discount and therfore paying a larger portion in tax.
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