Yes, you would have to pay tax on the profits you have made from the selling of the amounts of options that you are selling only.
Lets say that you own 100k options and that they cost you 5 cents each. And you want to sell say 50k in order to put the proceeds toward the conversion of some of your remaining options at say 10 cents each.
You would then have to pay tax, at the applicable rate, on the profits that you have made on the sale of the 50,000 options that you have disposed of.
I.e. (50,000 X 10 cents) - (50,000 X 5 cents)= $25,000 profits.
That $25,000 dollars is a taxable profit to you, (less of course any brokerage fees that you would have incurred), and you would have to pay tax at the applicable rate on that amount.
I.e. $25,000 less brokerage fees X applicable rate of tax.
Of course, if you held the options for a period longer that 12 months, and you are not classified as a share trader, then you could make us of the Capital Gains Relief Provision that could reduce those gains by 50%.
This is not to be taken as a tax advice, so please, DYOR.
Cheers
CTP Price at posting:
92.5¢ Sentiment: Hold Disclosure: Held
