INCOME TAX
Income Calculation
Income or Capital Gain
Appeal from Tax Court of Canada decision allowing appeal against reassessment of income tax liability for 2000 taxation year —Employer receiving warrants to purchase common shares of company as part of consideration for financing—Allocating 742,692 warrants to appellant in 1998—Appellant exercising warrants, selling shares received in 2000—Including net proceeds as employment income in 2000—Tax Court holding net proceeds capital gain in 2000—Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 6(1)(a) generally mandating inclusion of value of property in income of employee for year of receipt when property of any kind (including warrants, stock options) received by employee from employer in course of employment—Robertson v. Canada, [1990] 2 F.C. 717 (C.A.) holding where, in course of employment relationship, employee receives right to acquire property from employer upon fulfillment of condition or contingency, receipt of right not constituting s. 6(1)(a) benefit to employee until condition fulfilled—Appellant receiving s. 6(1)(a) benefit in 1998 when warrants received from employer—Appeal dismissed.
Canada (Attorney General) v. Henley (A-415-06, 2007 FCA 370, Ryer J.A., judgment dated 21/11/07, 10 pp.)