Taxation of Chargeable Gains Act 1992 section 146

Options: application of rules as to wasting assets

Section 146 sets out how the wasting asset rules apply (or do not apply) to various types of options, determining whether the cost of an option must be written down over its remaining life when computing a chargeable gain or allowable loss.

• Quoted options to subscribe for shares, traded options, financial options, and options to acquire trade assets are exempt from the straight-line restriction that normally reduces allowable expenditure on wasting assets.
• Other options over quoted shares or securities are treated as wasting assets whose life ends when the right to exercise expires or the option becomes valueless, whichever is earlier.
• Options not covered by these special rules remain subject to the normal wasting asset provisions in sections 44 to 47.
• Key terms — "financial option", "quoted option", "traded option" and "quoted shares or securities" — are defined by reference to section 144(8) and as shares or securities listed on a recognised stock exchange.