7 Common CGT Mistakes UK Wheel Strategy Traders Make in 2025/26 - And How to Avoid Overpaying HMRC
As a UK wheel trader, you’re selling cash-secured puts and covered calls to generate premiums. It feels like income, but HMRC treats it as capital gains, with full share-matching rules applying once you’re assigned shares.
The 2025/26 CGT allowance remains £3,000, but CGT rates on most gains (including shares) are now 18% for basic-rate and 24% for higher/additional-rate taxpayers. The allowance is low and the higher rates mean more people will actually feel CGT when wheeling.
Most wheelers rely on Excel or broker statements and get it wrong. Here are the 7 biggest issues seen across Reddit and trading forums, and how to avoid them.
1. Violating the 30-Day Bed-and-Breakfast Rule When Re-Wheeling the Same Stock
You get assigned 100 shares at a £95 strike (effective basis lower after premium). Price rebounds, you sell CCs, get assigned (disposal), then immediately sell another CSP on the same ticker within 30 days.
HMRC’s 30-day rule kicks in: the new acquisition matches against your recent disposal, not your Section 104 pool. You lose the ability to harvest losses correctly and your gains recalculation becomes distorted.
Fix: Leave 31 days before re-entering the same ticker or switch to a correlated alternative (AAPL → MSFT, QQQ → SPY, etc.). Track dates carefully or use a tool that warns you automatically.
2. Failing to Adjust Your Section 104 Pool After Assignment
CSP premium reduces your effective cost basis. On assignment, you add shares to the Section 104 pool at:
(Strike x quantity) - net premium
Many traders forget to subtract the premium or spread it incorrectly. This causes your average cost to drift, and every future disposal becomes wrong.
Example: Sell a £50 CSP for £200 premium.
Assigned: add 100 shares at £4,800 (£5,000 - £200).
Miss the premium? Your cost basis is overstated forever.
Fix: Treat every premium as a permanent basis reduction. Manual spreadsheets become unreliable once you have multiple assignments.
3. Treating Rolled Options as One Trade Instead of a Close + Open
Rolling a CC means:
- buy-to-close old contract (gain or loss)
- sell-to-open new contract (new premium)
Many traders log only the net effect or skip the closure entirely. HMRC sees two disposals. Missing the closure means understated gains/losses that affect the year’s total.
Fix: Always record rolls as two legs. Even if your broker shows a single-ticket roll, you must track each leg for CGT. A proper tracker makes this trivial.
4. Misclassifying Wheel Premiums as Income Instead of CGT
A common misconception: “Wheel income goes under the income section of Self Assessment.”
Incorrect. Premiums form part of the capital gain when shares are disposed or options expire.
Declare them as income and you risk paying the wrong rate (possibly higher) and creating inconsistencies in your records.
Fix: All wheel activity collapses under CGT through Section 104 pooling and matching. Only dividends go on the income pages.
5. Poor Record-Keeping Leading to HMRC Re-Matching Your Trades
Broker statements from IBKR, TastyTrade, or Trading 212 are US-centric and don’t follow UK matching rules. Without a proper ledger, HMRC will recompute your gains using the statutory share identification order (same-day > 30-day > Section 104), which often results in a higher bill than a rough FIFO-style spreadsheet.
Fix: Keep a full, timestamped trade history with GBP conversions, premiums, and matches. Accrue maintains this automatically so you can justify every number if questioned.
6. Forgetting Same-Day Matching on Multi-Leg Adjustments
If you close and reopen legs on the same day, HMRC may apply same-day matching before the 30-day or pool rules. This can create unexpected small gains/losses, especially during active rolling.
Fix: Use single-ticket rolls if your broker offers them. Otherwise, execute legs close together and document intent. Ensure each leg is logged correctly in your records.
7. Ignoring GBP/USD FX Gains on US Underlyings
For AAPL, NVDA, QQQ, etc., both assignment cost and disposal proceeds must be converted to GBP using the spot rate on the actual trade date.
Ignoring FX is one of the biggest mistakes. You should convert each cash flow using the trade-date spot rate (or an HMRC-published rate) rather than a rough year-average, which can materially misstate your gains.
Example:
Assigned at $100 strike when GBPUSD 0.75 → cost = £7,500
Disposed at $120 when 0.80 → proceeds = £9,600
Total gain: £2,100
This £2,100 reflects both the share-price increase and the FX movement.
Approximate breakdown:
• Share-price gain (restating cost using the exit FX rate): £1,600
• FX gain from 0.75 → 0.80: £500
• Total: £2,100
Fix: Convert every cash flow into GBP using date-specific FX. Proper tracking makes this automatic.
Final Thoughts
If you’re wheeling consistently, manual tracking will fail eventually - either through tax mistakes or HMRC follow-ups.
Accrue is built for UK wheel traders: enter your trades (CSPs, CCs, assignments, rolls, closes), and it applies Section 104 pooling, matching rules, FX, and produces clear HMRC-ready CGT reports. No more guessing whether you’re bed-and-breakfasting or mismatching.
Start tracking properly - sign up at accrue.software.
Not tax advice. Speak to a tax professional for large portfolios or complex cases.