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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Indexation: from 6/4/88: options

TCGA92/S145

Under TCGA92/S145, the cost of acquiring an option binding the grantor to sell, which is exercised, see CG12311+, is not identified with the cost of acquiring the asset but is treated as an item of expenditure on the asset incurred when the option was acquired. For disposals made on or after 6 April 1998 but before 5 April 2008 indexation allowance is frozen, except for disposals made by companies within the charge to Corporation Tax, see CG17207. Therefore, where an option is acquired after 31 March 1998, TCGA92/S145 will only be relevant to acquisitions made by companies.