Losses and “Bed and Breakfast” Share Trading

C

Carrolll1000

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I have sold some shares that resulted in a Loss for CGT. This loss was used to offset a CGT profit. I was intending to re-purchase the loss bearing shares in the new year and was planning to wait the 4 weeks, so that the loss on the sale is recognised. However the shares price has dropped further. I am now thinking of purchasing options now, on the same share. The options would expire a week after the required 4 weeks. I am wondering if I did this, would purchasing these options be considered being the re-purchase of the actual shares?

Thanks in advance.
 
No, options are a separate investment to the underlying share - depending in the type, they are inherently more risky than the share
 
Purchasing the options would not be seen as reacquiring the shares, but exercising the options would be.
 
It's almost never done to exercise the options and buy the shares

Most options are sold before the exercise date
 
jpd said:
It's almost never done to exercise the options and buy the shares

Most options are sold before the exercise date
Click to expand...
I would be looking to exercise the options but only after the 4 weeks. I am basically wanting to lock in the price now, incase the price goes up in the mean time. If the price drops below my strike price then I won’t exercise at all.
 
In neither case are you obliged to take receipt of the underlying shares so you haven't acquired the shares until the option or warrant is exercised.

If it was a forward contract, where you must take receipt of the underlying shares at the future date, I suppose it could be argued that you do continue to own the underlying stock. I don't know how Revenue would treat that case.
 
Thanks for your answer. Very much appreciated.
 
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