Monday, December 27, 2010

Changes to Stock Option Taxation Finally Official

Back in March the Conservative government announced some changes to the way that stock options are taxed. One of these changes brought relief for those who had to pay taxes on phantom income. Unfortunately, these new rules did not become law until Bill C-47 received Royal Assent December 15.

Canada Revenue Agency (CRA) was quick to come out with a form to allow people to elect to pay a penalty tax instead of paying tax on the phantom income. This form has the catchy name Election for Special Relief for Tax Deferral Election on Employee Security Options. This whole business is quite complicated. If you’re affected, you may want to get some professional tax advice.


  1. I think it would be better to call this "unusual income" rather than "phantom income." In reality it was stock option gain income, nothing phantom about it.

  2. @Anonymous: I'm not sure what point you're trying to make. The phrase "phantom income" is a very good description for this situation. In any case, such semantic arguments are pointless. If you don't like the tax change brought by this law, please explain why.