Tax Question on Share/Share Options

Del3D

Registered User
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Does anyone have experience of making tax returns on share/share options in the following configuration. I am using a long term conservative option trading strategy - one version is as follows (fictional share AAA):

AAA Current price $23.
Buy 1 Jan 09 (LEAP) Call @ $15 in Stock AAA at a cost of $950
Sell 1 July 07 Call @ $25 in Stock AAA, giving an income of $120
(assume for this example that the sold option expires worthless in July 07, e.g. stock rises to $24.50)

Assuming I only did this once (but have done it many times), Jan 09 arrives and AAA is valued at $30 (for example). Do I calculate tax on my gain as follows:

Sell my Jan 09 Call @ $15 in Jan 09 for approx $1,500 income
Along the way expired sold calls net $120 income
Total Sale price: $1,620
Cost of acquisition: $950
Profit on which tax is liable: $670
CGT (currently) due: $134

Is this correct?

If interest was paid as a result of currency hedging (i.e. borrow the money in $, secured against euro balance on which +ve interest is accruing - i.e. the magin ratio is <1) could the difference between interest paid and accrued be offset as an expense?
 
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