TSEM3235 - Capital items that are income for tax purposes: futures and options

ITTOIA/S555

Profits and gains arising on the disposal of a future or an option are chargeable to income tax at the trust rate.

An option is a conditional agreement between the grantor and purchaser to buy (call option) or sell (put option) a specified quantity of something such as shares or currency at a fixed price.

A future is a contract for the future delivery of commodities, shares, securities, foreign currency or other financial instruments at a pre-arranged price.

Further guidance can be found at SAIM7000+CG55400+ (options) and CG55600+ (futures).