PERSONAL MEASURES
Employee Stock Options
Employee stock options can receive preferential tax treatment.
The employee has a taxable employment benefit equal to the excess
of the fair market value of the shares acquired at the exercise
date over the price paid under the option. If certain conditions
are met, the employee will be eligible for deduction of half the
benefit effectively making the benefit half-taxable.
The Budget indicates the government's intention to limit
this preferential treatment (presumably the deduction for half the
benefit). Specifically, the preferential treatment will only be
available on shares acquired that fall under a cap for the year of
grant. An annual cap of $200,000 has been set based on the fair
market value of the shares that are the subject of the option. The
Budget is silent on the date that the FMV is determined. It is
intended that these changes would apply to employees of
"large, long-established, mature firms." Employees
