Précis: Mr. Fettes was an employee of the Culligan Group and in 2004 he was granted an option to acquire shares of Culligan Ltd. at $10.00 each, the then fair market value of the shares. In 2008 he exercised his option but the strike price was reduced to $2.02 for some reason. This was below the then fair market value of $8.05. The Minister assessed a benefit on the difference between $8.05 and $2.02. Mr. Fettes appealed on the basis that he was entitled to a reduction of 50% of the amount of the benefit as a result of the application of paragraph 110.1(1)(d) of the Income Tax Act (the “Act”).
Fettes v. R. - TCC: Decrease in strike price disentitled taxpayer to stock option tax deductionREAD MORE »