{"id":1346,"date":"2014-12-08T16:58:41","date_gmt":"2014-12-08T16:58:41","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=1346"},"modified":"2014-12-08T16:58:41","modified_gmt":"2014-12-08T16:58:41","slug":"surrender-of-stock-option-by-executive-generated-a-capital-gain","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2014\/12\/surrender-of-stock-option-by-executive-generated-a-capital-gain\/","title":{"rendered":"Surrender of stock option by executive generated a capital gain"},"content":{"rendered":"<p>In <em><a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2014\/12\/2014-TCC-348.pdf\">The Estate of the Edward S. Rogers v. The Queen<\/em>, 2014 TCC 348<\/a>, the Tax Court of Canada (TCC) held that the surrender of stock options in 2007 to a <em>non-arm\u2019s length<\/em> corporate employer, in exchange for a cash payment, gave rise to capital gain under s. 39 and not employment income under s. 7.\u00a0 The payment was not taxable under s. 7 because s. 7(1)(b.1) had not yet been enacted, which provision would have clearly treated the surrender payment as employment income under s. 7.\u00a0 The Crown\u2019s alternative arguments that the surrender payment should be taxed as (i) employment income under s. 5 or s. 6, (ii) a shareholder benefit under s. 15, or (iii) an adventure in the nature of trade under s. 9, were soundly rejected.\u00a0 The TCC instead held that the rights under the stock option agreement \u2013 including the right to surrender the stock option for cash and referred to as a \u201cstock appreciation right\u201d or \u201cSAR\u201d \u2013 constituted property, which property was disposed of on the surrender generating a capital gain under s. 39.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In <em><a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2014\/12\/2014-TCC-348.pdf\">The Estate of the Edward S. Rogers v. The Queen<\/a><\/em>, 2014 TCC 348, the Tax Court of Canada (TCC) held that the surrender of stock options in 2007 to a <em>non-arm\u2019s length<\/em> corporate employer, in exchange for a cash&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1346","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=1346"}],"version-history":[{"count":0,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1346\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=1346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=1346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=1346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}