CRA confirms that the required s. 7 employer withholding does not apply to s. 7(1.1) stock option benefits

S. 153(1.01) generally ensures that an amount deemed to be received as a benefit under s. 7(1)(a) is subject to the withholding and remittance requirements of s. 153(1) as if it were a bonus. CRA has confirmed that by virtue of an exception to this rule in s. 153(1.01)(b), this withholding requirement does not apply where an arm’s length employee who has exercised options to acquire shares of a Canadian-controlled private corporation, later disposes of the shares and the recognition of the s. 7(1)(a) benefit is correspondingly deferred under s. 7(1.1).

Neal Armstrong. Summary of 3 January 2018 Internal T.I. 2017-0709811I7 under s. 153(1.01)(b).