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Canada stock option tax hike would not be retroactive - finance minister

Published 2015-11-20, 02:46 p/m
© Reuters. Canada stock option tax hike would not be retroactive - finance minister

OTTAWA, Nov 20 (Reuters) - If Canada's new government raises
taxes on stock options it will not apply to those already
issued, Finance Minister Bill Morneau said on Friday, urging
people not to rush into any action in the belief it will avoid
taxes.
He said the Liberal government, which took power on Nov. 4,
had not come to a conclusion on how to change the tax treatment
of stock options and would likely be reviewing that in the next
few months.
"I would like those Canadians who are concerned about this
issue to understand is that any decisions we take on stock
options will affect stock options issued from that date
forward," he told reporters.
"I hope (this) should relieve those Canadians who have that
concern from taking actions that would be inappropriate."
The Liberal platform pledged to cap how much could be
claimed through the stock-option deduction, but said it would
not touch employees with up to C$100,000 ($75,000) in annual
stock-option gains.
Currently, Canadians are only taxable on 50 percent of the
gain from exercising a stock option.
The Liberal platform said Finance Department figures showed
8,000 very high-income Canadians deduct an average of C$400,000
from their taxable incomes via stock options.
It said this represented three-quarters of the fiscal impact
of this deduction, which in total cost C$750 million in 2014.
In promising to protect those employees with up to C$100,000
in gains, it said: "Stock options are a useful compensation tool
for start-up companies."
($1=$1.33 Canadian)

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