Raj Juneja, "Taxation of equity derivatives", 2015 CTF Annual Conference paper

Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Synthetic Equity Arrangement

Exemption of foreign exchanges from requirement to be recognized (pp. 17:9-10)

[T]he explanatory notes to the July 31, 2015 legislative proposals...

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Summary Under
Tax Topics - Income Tax Act - Section 112 - Subsection 112(10)

Ordering rule limiting access to 365-day stop-loss exception (p.17:14)

[A] specific ordering rule will be included in subsection 112(10), which...

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Summary Under
Tax Topics - Income Tax Act - Section 112 - Subsection 112(9)

Deemed non-ownership under SDA for stop-loss purposes (p. 17:14)

An additional rule in subsections 112(8) and (9) also applies where the...

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Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Derivative Forward Agreement

Previous forward agreements engaging the rule (pp. 17:14-15)

...Prior to the introduction of the rules, many mutual funds were entering into...

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Summary Under
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Futures/Forwards/Hedges

Potential capital treatment of equity derivatives (p.17:18-19)

[E]quity derivatives in many cases are not entered into to hedge exposure to other...

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Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(b)

Implicit interest element where mismatched equity swap payments (p. 17:19-20)

[I]f the periodic payments under a TRS are not made by both parties...

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Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d)

Non-application to equity swaps (p. 17:20)

The CRA has taken the position that where a Canadian resident borrower of a security pays a lending or...

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