CGT Determination Number 17

TD 17

Capital Gains: When an option to acquire an asset has been exercised, from what date can the option fee be indexed?

  • Please note that the PDF version is the authorised version of this ruling.
    This ruling contains references to repealed provisions, some of which may have been rewritten. The ruling still has effect. Paragraph 32 in TR 2006/10 provides further guidance on the status and binding effect of public rulings where the law has been repealed or repealed and rewritten. The legislative references at the end of the ruling indicate the repealed provisions and, where applicable, the rewritten provisions.
    This document has changed over time. View its history.

FOI status:

may be releasedFOI number: I 1019078

1. Where an option has been exercised, the option fee can be indexed from the time the liability to pay the option fee arose.

2. The exercise price that also forms part of the acquisition consideration of the asset may be indexed from the time the liability to pay that amount arises following the exercise of the option. However, in certain cases, indexation is only available from the time the amount of consideration was paid or given e.g. calls paid on a share.

3. Under the CGT provisions, indexation of the cost base of an asset is only available where the asset has been owned for 12 months. Hence indexation of the option fee and exercise price is not available until the particular asset has been owned for 12 months. This is the case even if the option fee was paid more than 12 months before the date of disposal of the asset.


On 1 April 1990, a landowner grants a taxpayer an option to buy his/her land for $100,000 on 30 June 1991. The option fee is $10,000.
The taxpayer exercises the option and acquires the asset on 30 June 1991. To work out if there is a capital gain on the disposal of the land, indexation is available if the land is disposed of on or after 30 June 1992.
The option fee can be indexed from 1 April 1990 - the time the liability to pay the option fee arose. The exercise price, $100,000, is indexed from 30 June 1991 - the date the liability arose to pay the exercise price.

Commissioner of Taxation
31 October 1991


ATO references:

ISSN 1037 - 1419

Subject References:

Legislative References:

TD 17 history
  Date: Version: Change:
  31 October 1991 Original ruling  
You are here 29 November 2006 Original ruling + note Repeal provision note