Income Tax Act — I-3.3 7
on for the disposition; and (b) for the purpose of determining the amount, if any, of the benefit that is deemed to have been received as a consequence of the disposition referred to in paragraph (a), the taxpayer is deemed to have paid an amount to acquire those rights equal to the amount, if any, by which (i) the amount paid by the taxpayer to acquire those rights (determined without reference to this subsection) exceeds (ii) the total of all amounts each of which is an amount received by the taxpayer before the particular time in respect of the cessation. Securities held by trustee (2) If a security is held by a trustee in trust or otherwise, whether absolutely, conditionally or contingently, for an employee, the employee is deemed, for the purposes of this section and paragraphs 110(1)(d) to (d.1), (a) to have acquired the security at the time the trust began to so hold it; and (b) to have exchanged or disposed of the security at the time the trust exchanged it or disposed of it to any person other than the employee. Special provision (3) If a particular qualifying person has agreed to sell or issue securities of the particular person, or of a qualifying person with which it does not deal at arm’s length, to an employee of the particular person or of a qualifying person with which it does not deal at arm’s length, (a) except as provided by this section, the employee is deemed to have neither received nor enjoyed any benefit under or because of the agreement; and (b) the income for a taxation year of any person is deemed to be not less than its income for the year would have been if a benefit had not been conferred on the employee by the sale or issue of the securities. Application of s. (1) (4) For greater certainty it is hereby declared that, where a person to whom any provision of subsection 7(1) would otherwise apply has ceased to be an employee before all things have happened that would make that provision applicable, subsection 7(1) shall continue to apply as though the person were still an employee and as though the employment were still in existence. Non-application of this section (5) This section does not apply if the benefit conferred by the agreement was not received in respect of, in the course of, or by virtue of, the employment. Sale to trustee for employees (6) If a particular qualifying person has entered into an arrangement under which securities of the particular person, or of a qualifying person with which it does not deal at arm’s length, are sold or issued by either person to a trustee to be held by the trustee in trust for sale to an employee of the particular person or of a qualifying person with which it does not deal at arm’s length, (a) for the purposes of this section (other than subsection (2)) and paragraphs 110(1)(d) to (d.1), (i) any particular rights of the employee under the arrangement in respect of those securities are deemed to be rights under a particular agreement with the particular person under which the particular person has agreed to sell or issue securities to the employee, (ii) any securities acquired under the arrangement by the employee or by a person in whom the particular rights have become vested are deemed to be securities acquired under the particular agreement, and (iii) any amounts paid or agreed to be paid to the trustee for any securities acquired under the arrangement by the employee or by a person in whom the particular rights have become vested are deemed to be amounts paid or agreed to be paid to the particular person for securities acquired under the particular agreement; and (b) subsection (2) does not apply in respect of securities held by the trustee under the arrangement. Definitions (7) The following definitions apply in this section and in subsection 47(3), paragraph 53(1)(j), subsection 110(0.1), paragraphs 110(1)(d), (d.01) and (e) and subsections 110(1.1) to (1.9) and (2.1). qualifying person means a corporation or a mutual fund trust. ( personne admissib