I-3 - Taxation Act

Section 725.5.1 Disposition versions

2022-06-08

725.5.1. A taxpayer may deduct an amount equal to the amount of the benefit an individual is deemed to have received in the year in relation to an employment the individual holds with the taxpayer under section 49 or any of sections 50 to 52.1, in respect of a non-qualified security that the taxpayer (or a qualifying person that does not deal at arm’s length with the taxpayer) has agreed to sell or issue under an agreement with the individual, if

(a)  the taxpayer is a qualifying person;

(b)  at the time the agreement was entered into, the individual was an employee of the taxpayer;

(c)  the amount is not claimed as a deduction in computing the taxable income of another qualifying person;

(d)  an amount would have been deductible in computing the taxable income of the individual under section 725.2 if the security were not a non-qualified security;

(e)  in the case of an individual who is not resident in Canada throughout the year, the benefit deemed to have been received by the individual under section 49 or any of sections 50 to 52.1 was included in computing the individual’s taxable income earned in Canada for the year; and

(f)  the notification requirements provided for in section 725.5.9 are met in respect of the security.

2022, c. 23, s. 42.