CRA generally accepts that formula-based appreciation plans are not SDAs where the formula closely tracks the FMV of the employer’s shares over the plan’s duration

CRA reiterated its statements in 2020-0850281I7 that it will no longer consider any ruling requests to whether a formula-based appreciation plan is a salary deferral arrangement, unless the plan is one described in ATR-45 (re share appreciation rights plans), or the request is about whether one of the exceptions, listed in the SDA definition, applies - but went on to note that it accepts that many formula-based appreciation plans are not SDAs where the underlying formula closely approximates the FMV of the relevant shares of the corporate employer over the duration of the plan.

Neal Armstrong. Summary of 27 October 2020 CTF Roundtable, Q.8 under s. 248(1) – SDA.