CRA has ruled ((e.g. 2005-0144541R3) that units of a 3-year bonus plan that satisfied the conditions of para. (k) in the definition of SDA could be converted, without realizing tax, to units of a DSU plan that satisfied the conditions of Reg. 6801(d). Why has CRA discontinued providing such rulings? CRA responded:
When considering the conditions that must be satisfied under paragraph (k) of the definition of SDA and paragraph 6801(d), a conversion of rights under a 3-year bonus plan to rights under a DSU plan, or vice versa, will not satisfy the conditions under either paragraph (k) or 6801(d). In such circumstances, the conversion of rights under what was a 3-year bonus plan could effectively permit the payment of an amount after the third calendar year, and the conversion of rights under what was a DSU plan could result in the payment of an amount prior to death, retirement or termination of employment. Accordingly…the terms of a plan cannot under any circumstance provide a taxpayer with conversion rights. ...
The CRA will continue to apply the positions in [the] published rulings to any units credited on or before November 24, 2015 (including units with unexercised conversion rights on that date), as well as to additional units credited at any time in respect of those units, for example, dividend equivalents and proportional adjustments due to stock splits or corporate reorganizations.
(See also CRA’s previous oral announcement.)