2002 Ruling 2001-0107613 - EMPLOYEE OPTION TRANSFERS -- summary under Paragraph 7(3)(a)

Where an arm's length employee transfers options to a personal holding company for no consideration, he will not, except as provided by s. 7, be deemed to have received or enjoyed any benefit under or because of the options or their transfer to the corporation. Under s. 7(1)(c), he will realize a benefit when the holding company exercises the options during his lifetime or, if the options are exercised after his death, the company will be deemed to receive employment income under s. 7(1)(c) on exercise.