Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Will section 7 apply to stock options provided to employees of a corporate partnership by a corporate partner?
Position:
Yes
Reasons:
As a result of a XXXXXXXXXX confirmation with the Partnership Section, we are now of the view that employees of a partnership are considered employees of the corporate partner.
960437
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
October 21, 1996
Dear Sirs:
Re: Section 7 of the Act and Partnerships
We are writing to inform you that we have recently reviewed the position expressed to you in our letter dated October 29, 1993 (file #932434) and we are now of the view that an employee of a corporate partnership may be considered an employee of each corporate partner. The determination of whether an employee is employed by each corporate partner will depend on all of the facts in each case, including any agreements between the partners relating to the employment of the partnership employees. Consequently, where the facts would lead to a conclusion that an employee is employed by a particular corporate partner, section 7 of the Act will apply where an employee of the corporate partnership is granted options to acquire shares of the corporate partner.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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