CG12313 | Options: exercise of an option: grantor of the option

TCGA92/S144 (2)

If an option is exercised

• the granting of the option and

• the transaction entered into by the grantor in fulfilment of his obligations under the option

are treated as a single transaction.

If the single transaction is a sale by the grantor, the consideration for the disposal is the sum of

• the consideration received for the grant of the call option (see CG12301), plus

• the consideration received for the transfer of the asset which was subject to the option.

If the single transaction is a sale to the grantor the acquisition cost of the grantor is

• the consideration given for the transfer of the asset which was subject to the option, less

• the consideration received for the grant of the put option (see CG12301).