Participants in a DSU plan described in Reg. 6801(d) had elected to receive bonuses as credits to their DSU notional accounts based on the then-current market value of the shares of the employer (Pubco) and also received dividend-equivalent credits to their account. Regarding the consequences when they cashed in their DSUs on the termination of their employment for amounts based on the appreciated (or depreciated) share value, CRA stated:
[A] Lump Sum received by a Participant under the Plan in a particular year is an amount required to be included in computing the Participant's income for the year from an office or employment by virtue of subsection 5(1), paragraph 6(1)(a) or paragraph 6(1)(c), as the case may be. Furthermore, we are of the view that even if the market price of Pubco's common shares has fluctuated (up or down) between the date a Participant elects to receive a portion of the Participant's bonus for a particular year in the form of DSUs and the date the Participant receives the Lump Sum under the Plan, the entire Lump Sum constitutes income to the Participant from a source that is an office or employment [and similarly re dividend equivalents].