30 August 1996 External T.I. 9625025 - CHANGE TO PLAN, DISPOSITION

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.

									962502
XXXXXXXXXX							M.P. Sarazin

Attention: XXXXXXXXXX

August 30, 1996

Dear Sirs:

Re: Amendment of a Stock Option Plan

This is in reply to your letter dated July 11, 1996, wherein you requested our views as to whether an amendment to an existing stock option plan allowing an employee participating in the plan to elect to receive cash in lieu of receiving shares would be significant enough to constitute a disposition of the rights under the existing plan and an acquisition of rights under a new plan.

We regret that the determination of whether a proposed amendment to a specific plan would be significant enough to constitute a disposition for purposes of the Act can only be resolved after a thorough review of all of the facts in the particular situation. Consequently, confirmation of the tax implications inherent in your particular proposed transactions will be given by this Directorate only where the transactions are outlined in an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R2. Should you chose to apply for an advance income tax ruling, your file will be treated as a submission related to the above file and will be given priority treatment.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate