An employee transferred the individual’s rights under a deferred share unit plan described in Reg. 6801(d) (a "DSU Plan") to the employee’s personal holding company. In finding that the plan would not qualify for the para. (l) exclusion after such a transfer, so that the FMV of the deferred share units would be included in computing the employee's income in the year of the transfer (to the extent that such value had not already been included), CRA stated:
A transfer to another person would contravene the preamble to paragraph 6801(d), which requires that the agreement be between the corporation and the employee and that it be that employee who may receive amounts under the arrangement. Furthermore … the transfer of the employee's rights in the DSU Plan could indirectly allow the individual to access the value of the individual's rights before one of the times specifically identified in paragraph 6801(d)(i) … which would also contravene the requirements of paragraph 6801(d).
However:
[T]he presence of a transfer that would be at the discretion of the employee and the employer could demonstrate that the parties never intended to meet the criteria required for the plan to qualify as a DSU plan. In such circumstances, the agreement or arrangement would qualify as an SDA from the time of its creation, resulting in the retroactive application of the SDA rules.