writing options and tax

[charttv]

I understand that when it comes to filling out the tax return and shares you have to distinguish whether you are a share trader or investor.

As an investor, CGT comes into play a lot more.

I am a bit perplexed as to how account for the writing of options, especially naked options. How is the premium received treated in taxation terms?

Would you automatically be considered a share trader and not an investor because you are writing options?

I have received several different responses from the ATO and am on the verge of asking for a private ruling.

 

[geoffw]

Charttv

I'd suspect that really need talk to a real accountant about that.

The answer worth a lot of money. You probably need to spend a little bit of money to find out the "right" answer. And that answer may well depend on circumstances that only your accountant knows.

 

[s_t]

There is an article on the asx website by an accountant that discusses the tax treatment of options. I imagine you are writing options with a life of less than 1 yr? I think the conclusion was basically you treat the option premium as income when it is received (even if the position is still open), regardless of any trading/investing category your other stuff might be in.

 

[charttv]

Great! do you have a link to this info on the ASX site? It sound like just what I am looking for.

 

[s_t]

It's a pdf someone on the ASX site. Bit of a pain to find. Let me know if you can't find it and I'll try and find it again.

 

[Player]

This may help

http://www.asx.com.au/products/options/trading_information/taxation.htm

 

[charttv]

Found it,

http://www.asx.com.au/products/pdf/taxation_treatment_of_options.pdf


thanks guys