Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Employee Share Ownership Plans (ESOP's)
Thank you for the material entitled "Technical Issues: Structuring a Joint ESOP in Canada" which was presented at a Canadian Employee Ownership Conference in Toronto on September 26-27, 1991 by 19(1)which we received with your memorandum of October 1, 1991.
As suggested in the paper, the tax implications of an employee share ownership plan (ESOP) vary depending on the intent and terms of the particular plan.
You may be interested to know that we have recently reviewed our position on the provincial grants or tax credits offered to employees participating in an ESOP which qualifies under the Ontario Employee Share Ownership Act or the B.C. Employee Investment Act, respectively. A grant or tax credit paid under either of these Acts reduces the adjusted cost base of the shares so acquired. We have taken the position that a grant or tax credit received by an employee under a provincial Act relating to an ESOP will not be considered a taxable benefit to the employee.
Any benefit offered by the employer will, however, be taxed according to the nature of the plan.
B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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