30 November 1995 Ruling 9624213 - STOCK OPTION PLAN FOR EMPLOYEE SHAREHOLDERS

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Application of GAAR

Position: Not applicable

Reasons:Transactions rely on specific provisions of the Act and are consistent with the Act

XXXXXXXXXX							1-962421

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling 3-961743

This is in reply to your letter of XXXXXXXXXX in which you requested an amended ruling and a supplemental ruling in respect of the facts and proposed transactions which are the subject of the advance income tax rulings provided in our letter of XXXXXXXXXX This also acknowledges our discussions of XXXXXXXXXX with respect to certain of the Facts and Rulings stated in that letter.

Revisions

Paragraph 7(c) of our previous letter is amended to

XXXXXXXXXX

Paragraph 14 of our previous letter is amended to substitute the word "expire" for the phrase "cease to be exercisable"

Ruling A of our previous letter is amended to read as follows:

"A.Paragraph 7(1)(a) of the Act and, provided an Employee deals at arm's length with the Company at the time the Option is granted, subsection 7(1.1) of the Act, will apply to deem the Employee to have received a benefit calculated in accordance with those provisions in the year the Employee acquires a share through the exercise of the Option where subsection 7(1.1) does not apply or in the year the Employee disposes of or exchanges the share acquired by the Employee through the exercise of the Option where subsection 7(1.1) does apply."

Supplemental Ruling

Provided:

i.the statements of facts and proposed transactions as stated in our letter of XXXXXXXXXX, 1996 as amended above, remain accurate and constitute a complete disclosure of all the relevant facts and proposed transactions; and

ii.the proposed transactions are carried out as set out in our letter of XXXXXXXXXX, 1996, and as amended above

we confirm that as a result of the proposed transactions, in and of themselves, subsection 245(2) of the Act will not apply to redetermine the tax consequences confirmed in the rulings provided.

We also confirm that the rulings A, B and C given in our letter of XXXXXXXXXX, 1996, and as amended above, will continue to be binding on Revenue Canada, Customs, Excise and Taxation, subject to the qualifications and limitations as set out therein.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings
and Interpretations Directorate
Policy and Legislation Branch